A new Global Entrepreneurship Monitor study finds fewer business closures but persistent challenges involving financing, profitability and the gap between women who want to start businesses and those who ultimately do.
SAN JUAN — Puerto Rico’s entrepreneurial activity is showing signs of stabilization following several years of accelerated growth, but access to financing, fear of failure and business profitability continue to challenge aspiring and existing entrepreneurs, according to the Global Entrepreneurship Monitor (GEM) 2025 study.
The findings were presented Friday by the University of Puerto Rico’s Río Piedras Campus (UPRRP) and provide a snapshot of the current entrepreneurial environment on the island.
“These results offer an important overview of the opportunities and challenges facing entrepreneurship in Puerto Rico and serve as a key tool for developing public policy, business support programs and sustainable economic growth strategies,” said Theany Calderón, principal investigator and professor at UPRRP’s School of Business Administration.
Fear of Failure Remains a Barrier
One of the most persistent obstacles identified by the study is fear of failure.
About 43.2% of respondents said fear of failure would prevent them from starting a business, a percentage that has remained virtually unchanged since 2020.
Access to capital also continues to present difficulties.
The study found that most entrepreneurs still depend heavily on personal savings and credit cards to finance the launch of their businesses, highlighting the need for greater access to alternative sources of capital.
Gap Persists for Women Entrepreneurs
The findings also identified a gap between women’s interest in entrepreneurship and the number who ultimately establish businesses.
Entrepreneurial intention among women reached 27.2%, but their early-stage entrepreneurial activity rate stood at 13.9%, compared with 17.5% among men.
The results point to a potential opportunity to strengthen programs that help aspiring women entrepreneurs move from business ideas to operating ventures.
Profitability Becomes Leading Reason for Closures
Although fewer businesses shut down in 2025, profitability emerged as the leading reason entrepreneurs discontinued operations.
About 28.1% of entrepreneurs who closed businesses cited a lack of profitability, representing a significant increase from the previous year.
Researchers said the finding underscores the importance of strengthening financial education and advisory services to help businesses become sustainable beyond their initial launch.
Puerto Rico’s Total Early-Stage Entrepreneurial Activity (TEA) rate, which measures people in the process of starting or operating young businesses, stood at 15.6% in 2025, down from 24.3% in 2024.
Researchers characterized the decline as part of a stabilization process following the rapid expansion of entrepreneurial activity experienced in recent years.
Fewer Businesses Are Closing
Despite the decline in early-stage entrepreneurial activity, the study found indications of greater business resilience.
Puerto Rico recorded an established business ownership rate of 4.4%, while the rate of business discontinuation fell to 2.6%, compared with 5.7% in 2024.
The researchers noted that Puerto Rico’s business discontinuation rate also remains below the Latin American average.
The findings suggest that while fewer people may be entering entrepreneurship than during the recent surge, businesses that are already operating may be demonstrating a greater capacity to remain in the market.
From Necessity to Wealth Creation
The motivations behind entrepreneurship are also evolving.
According to the report, seven out of 10 entrepreneurs said they started businesses because jobs were scarce.
At the same time, researchers found a significant increase in entrepreneurs motivated by economic growth and wealth creation, suggesting a shift toward a more competitive and growth-oriented entrepreneurial mindset.
The GEM findings were presented at Popular Center in Hato Rey during an event attended by academics, business leaders and economic-sector specialists.
The Puerto Rico study was conducted by researchers Theany Calderón Abreu, Arleen Hernández Díaz, Jairo Ayala Godoy and Segundo Castro-Gonzáles.
