Our mom lost her business when we were 12 years old. She opened more than 30 Mexican restaurants in the Greater Los Angeles area, but after 25 years she still struggled to find the resources to continue growing her business. My brother and I have since devoted our lives to never leaving a small business behind.
At Camino Financial, we use an online platform to provide small businesses with personalized financial advice and access to both micro and small business loans. We are principally focused on supporting Latino-owned small businesses, because research shows that one in four entrepreneurs is Latino. There are 4.2 million Latino-owned small businesses in the U.S., a segment that is growing twice as fast as the sector as a whole.
The only missing piece to our puzzle was a banking institution willing to fund the loans to help these businesses grow. We recognized early on that our mission to support budding entrepreneurs was not shared by most banks. Due to the requirements and time constraints of the underwriting process, most banks are reluctant to fund micro loans from $5,000-$50,000 and perceive small businesses with cash collateral as risky.
To relieve some of the perceived inefficiencies and risk, we developed our online platform to streamline the underwriting processes so smaller loans made sense.
And then we met the team at Commercial Bank of California. They are dedicated to supporting local communities, especially entrepreneurs, and recognized the opportunity to partner with us. It was CBC’s willingness to support our incubator idea and help it grow and flourish. Since CBC began funding our clients’ micro loans (covering 95 percent of our business), we have had more than 25 percent of them grow their credit, scale their business, and graduate to a larger SBA loan from the bank.
Together with CBC, we’ve witnessed our clients experience many wins. Our largest client began as “not bankable,” but after climbing the credit ladder, the company is now generating more than $12 million per year in revenue. There are numerous other stories like this, where we’ve funded loans together, and these clients have scaled their businesses, improved their credit, and provided job opportunities for others. It’s gratifying to see.
Like CBC, we firmly believe that our success is rooted in approaching our business as an entrepreneur, because then we can fully understand our clients, and help them navigate through these challenging waters.