Camino Financial: Small Business Finance for Latino Entrepreneurs, by Latino Entrepreneurs
Funding and growth remains a big challenge for Latino businesses, from hi-tech startups to the mom and pop restaurant on the corner. One startup founded by two Harvard Business school students, who are also twin brothers, aims to pin its own by growth on helping small Latino businesses reach their full potential.
Recently, we've been reporting on one of the next big challenges in efforts to boost diversity in technology: getting funding to small Latino and Latin American startups so that they can grow and flourish as larger businesses.
From the high-tech startups in TechCrunch DisruptNY 2015's Startup Alley to the annual conference of Silicon Valley's venture capitalists, it's clear the lack of available funding opportunities is a big obstacle to seeing the good ideas of Latino entrepreneurs take off into full-fledged companies.
That's where Camino Financial, a startup founded by Sean and Kenny Salas while still MBA candidates at Harvard, according to local business journal BostInno, may find a particularly helpful, and possibly profitable, niche.
Camino Financial's mission is to help small businesses find funding and grow beyond their current stage by helping them secure capital and by providing technical, financial assistance to help those business owners raise their credit scores, apply for financing, and take other steps to set themselves up for future success.
There are, of course, plenty of companies that facilitate financing and business growth, but Camino Financial is particularly tailored for the small upstarts popping up everywhere these days in the Latino community.
For example, Camino finds alternative sources of capital for businesses that have a less-than-stellar credit score or a limited credit history -- businesses that otherwise would be unable to get a loan through a commercial bank, or for whom such loan application processes would be prohibitively long and time consuming.
They also bring their Harvard Business School training to the table, finding financing options most upstart business owners wouldn't know to look for, whether through SBA loans, merchant cash advances, short-term or long-term loans. And rather than a several-months long application process through traditional means, Camino can sometimes find and acquire loans for businesses in a matter of days.
All Camino requires from their clients is a gross annual sales of at least $100,000, (they're working on lowering that to $50,000 since the average size of Latino small businesses is about $70k) a credit score of at least 500, and a commission of 2 to 3 percent.
"Hispanic-owned businesses are the fastest growing and largest underbanked market segment in the U.S.," said Sean Salas to BostInno recently. "By finding creative ways to extend capital to these businesses, Camino Financial and its prospective investors are up to the challenge to making a big difference in our economy."
The Salas brothers, who are about to graduate from Harvard and move to the mecca of Hispanic-owned small businesses -- Los Angeles -- have very personal reasons for creating their Latino-focused funding/advising startup. The youngest of six children growing up, the Salas brothers' mother opened a Mexican restaurant that expanded into 30 locations over a couple of decades.
That success was fleeting, though, as their mother didn't have access to the capital or financing know-how to keep the business growing. So when the Salas brothers were 12 years old, she lost the business and the family had to move back Mexico, defeated.
Now, in their second year building Camino and ready to move into L.A., Sean and Kenny are starting to work on raising up to $1.5 million in equity funding, which they're optimistic about finishing by the end of this summer.
Latino small businesses, especially the bevvy of technology startups who are still having trouble getting in the door with VCs, could use the help -- If not from the established players in finance, perhaps it'll come from Camino Financial, another promising Latino startup.