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Despite Oakland's 17% unemployment rate, women and low-income people's business support centers are seeing a surge in business startup interest. In particular, more and more new Latina-owned businesses are likely to launch. 

However, many Latina-owned businesses don't survive long, since they face several long-term challenges.

• In Fruitvale, the Unity Council's One-Stop Career Center, which prepares clients to enter the workforce and launch enterprises, had a 35% increase in clientele in 2009.
• Women's Initiative for Self-Employment (WISE), a Bay Area non-profit helping low-income women start businesses whose East Bay clients are 36% Latina, increased the number of clients served from 1,902 in 2007 to 3,200 in 2009.
• And at the Renaissance Entrepreneurship Center (REC), a Bay Area non-profit that provides small business training and support services, business workshops now begin at full capacity and their Women’s Speaker Series saw a near doubling of attendance from 2008 to 2009. 15% of the clients at their main office are Latinas.

This happens as unemployment disparities increase, further widening already-existing poverty gaps. Job losses are occurring at fast rates for women and Latinas in particular. This climate both pushes and pulls women to start their own enterprises as new market opportunities open up from the contraction and closures of larger businesses, said Karuna Jaggar, East Bay Executive Director of WISE. “In Oakland we served over 1,000 women [in 2009]. And there are waiting lists. We could serve twice as many women if we had more funding.”

The recession has upended the way we think about business, reinforcing the enterprising spirit. “Everyone is seeing a surge in individuals wanting to own a business and not be at behest of an employer who will potentially cut jobs in 6 months,” said Gilda Gonzales, Executive Director of the Unity Council. "We’re clear that this increase is related to unemployment."

However, starting a new business is different than keeping it going.

While the number of Latina start-ups launched has increased every year, the over-all number of Latina-owned businesses remains small.

Nationally, Hispanic business ownership is about 7 percent. Latinas only own around 1/3 of these businesses, according to the National Latina Business Women's Association.

“Latinas need tremendous education and support around finances, accounting, and operations. In our experience, Latina businesses don't falter because of a bad product. They falter because of weak business operations and lack of access to low-interest capital. There’s a lot of business and financial management support and pre-education that must take place to help Latinas grow successful businesses and leverage their success,” she said.

The Corporation for Economic Development (CFED) ranks California, as one of the states with the highest number of Latina business owners, and as 10th in the nation for small business ownership, 6th for women-owned businesses, and 17^th for Hispanic business ownership. Analysis of the CFED data by the Women’s Initiative for Self Employment ranks California 40th in the nation for Latina-owned business value.

This disparity in statistics between Latina-owned businesses and the broader small-business base is due in part to a lack of broader business connections among Latinas and access to resources that help others stay the course say small-business advisors.

Taking advantage of incentive programs

Take the America's Recovery Capital (ARC) loans. New America Media reports that there has been a lack of marketing of these loans to business owners of color. This has resulted in white business owners receiving an overwhelming number of them, even as minority-owned businesses could use them as well.

(Note: ARC loans provide up to $35,000 to previously successful, currently struggling small businesses without outstanding loans. Borrowers have a 12-month repayment grace period, and have five years to repay the loan. SBA [Small Business Administration] charges no fees and pays interest to the lender at prime—plus 2 percent.)

Unfortunately, it appears that many Latina small-business owners who might apply have no idea they exist. Data obtained by NAM from the SBA shows that only 3 percent of the loans went to Hispanic-owned businesses, and only part of that number to women-owned business.

In addition to business capital and marketing to potential clients, sources note Latinas are not utilizing a number of other subsidies and incentives that help mitigate business operations expenses, such as tax breaks and payroll tax incentives.

The good news is that across the board Latinas show the greatest increase in business and household wealth of all minority groups once they start their own business. And their businesses keep more money in the community, something Oakland sorely needs.

One of the challenges posed by this economy is that business owners are so focused on their businesses that they have fewer opportunities to get out and learn about potentially beneficial resources. But, during this time people are also coming together and thinking creatively to overcome challenges said Jaggar.

"There's a lot of work ahead," said Gonzales. "As the Latino population grows so must programs that meet its needs".

Take Action: Check out and pass on OL's list of Small Business Resources: http://oaklandlocal.com/article/small-business-resources-oakland-ca-and-surroundings

This story is part of a recurring Latin@ small business series. Know a notable Latina small business owner we should profile? Noticing related trends? Let us know!