What I've Learned: Growing Latino Businesses When Banks Won't

Sean Salas is the CEO and Co-Founder of Camino Financial, a credit marketplace helping under-banked small businesses access capital with a focus on servicing the fast growing Hispanic business segment. Sean has worked in private equity, investment banking and throughout his career has structured over $1.2 billion in debt financings.

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Can Mexico Give Startups An Edge To Capture The U.S. Hispanic Market?

I recently had the pleasure to present the Camino Financial story to the Ambassadors and Consuls of Mexico at their XXVII Annual Reunion in Mexico City.  The takeaway was simple: the U.S. hosts the LARGEST untapped Hispanic market in the world and it’s up for grabs right now.  The buying power of Hispanic consumers is approximately $1.3 trillion, making its economy larger than all but 15 countries (source: Selig Center for Economic Growth).  Meanwhile, Hispanic-owned businesses significantly contribute to the U.S. economy with over $661 billion in gross sales (source: Geoscape).  And with all the innovation occurring in the U.S., very few startups are focused on delivering value to the rapidly growing Hispanic community.  A recent survey from AngelList counted 89,405 U.S.-based startups: of these, only 15 focused on delivering services to the Hispanic market.  Here lies a GIGANTIC opportunity…

While I fundamentally believe 80%+ of what is required to capture any American market resides here in the U.S., we shouldn’t let this blindside us from exploring resources and influences across the border.  This is especially true when looking for a marketing or operational edge to capture the U.S. Hispanic market.  Below are 3 ways startups can leverage Mexico to build a Hispanic edge:

Design Complementary Products for Both the U.S. and Mexico
Designing a product or service that works in the U.S. and Mexico presents both an immense growth opportunity and a big challenge.  While this is clearly a challenge, we have seen many products become widely accepted across borders, such as tacos, tequila, and Vicente Fernandez (not joking).  But delivering transnational products goes way beyond tacos and entertainment, it can be as sophisticated as creating microfinance products and Ed Tech solutions (e.g. Camino Financial in 5 Years).

Mexico is a Center of Influence for Paisanos
After my discussion with Mexican officials, I was quickly approached with requests to visit several local consulates in the U.S. (Mexico has 50 consulates in the U.S.) to speak to Paisanos (first generation immigrants) looking for capital.  These invitations further exemplify the power of influence that resides in Mexico, as well as an opportunity to penetrate the U.S. Hispanic market.  It sounds far-fetched, but it’s true. This can be a huge capture opportunity for savvy startups focused on the U.S. Hispanic market.

Resources & Talent
Now, many Hispanics in the U.S. may not find relevance in, or may be detracted from, “Hispanic oriented” products.  However, Mexico has much more to offer than just serving as a center of influence for a certain number of Hispanics in the U.S.: it offers resources in the form of raw materials and talent.  While in Mexico, I met with two call center providers to help service my Spanish speaking customers in the U.S.  First, I was blown away by the level of management sophistication, technology, and access to motivated talent.  Second, I was intrigued by the opportunity of saving 50 cents on the dollar.  While I do not believe the ultimate cost solution for startups or BIG corporations is to outsource work to countries with a lower cost of labor, I do believe businesses should allocate finite resources in certain areas to maximize the customer experience.  In the case of catering to Spanish speaking customers, Mexico offers a huge opportunity to deliver a seamless telesales and customer service experience.
Now more than ever, it is imperative that entrepreneurs and business owners open their eyes and look across the border, as this may be the key to unlocking untapped value among Hispanics in the U.S. and beyond.

Source: Alfredo Lopez

Emerging Lending Marketplace Focused on Underbanked Hispanic Businesses Raises $750,000 in Seed Capital

LOS ANGELES, Nov. 9, 2015 /PRNewswire/ -- Camino Financial is an online lending marketplace primarily focused on deploying capital to the largest and fastest growing underbanked business segment in the U.S., Hispanic-owned businesses.  With the emergence of many new online lenders and credit marketplaces, Camino Financial expects to carve a sizeable niche in online business lending.  Recently published research by Geoscape estimates that 4.1 million U.S. based businesses are owned by Hispanics.  Based on this research, Hispanic-owned businesses grew 15x faster in 2012-15E compared to all U.S. firms.  Despite their size and growth profile, Hispanic-owned businesses struggle to get access to bank loans with approximately 6% of SBA 7(a)1 loans deployed to Hispanics in the last year (source: www.SBA.gov).

Camino Financial was co-founded by twin brothers, Sean and Kenny Salas, while completing their MBAs at Harvard Business School.  The Salas brothers were born from an entrepreneurial family.  The matriarch of the Salas family started a small Mexican restaurant and over the life of her career, opened over 30 locations in southern California.  Unfortunately, at the age of 12, Sean and Kenny saw the fall of the Mexican restaurant chain, a life changing event.  Drawing inspiration from their mother's story, the Salas brothers were determined to create a lending platform catered to solving unique problems facing the Hispanic business community.

"The Hispanic business owner has unique problems accessing capital, stemming from areas as deep as language, culture, and education," said Sean Salas, CEO.  "Lending to the Hispanic market is not as simple as translating your website to Spanish.  Our client is seeking an integrated customer experience that requires a tailored design across the business spectrum in brand, product, positioning, and customer service."

The Company is backed by institutional and angel investors including Collaborative Fund, all of whom offer deep expertise in online lending, commercial banking, and Hispanic marketing.  In particular, Collaborative Fund has significant domain expertise in the online lending space with investments in Bond Street, UpStart and InVenture.

With seed funding in place, Camino Financial will ramp-up its marketing efforts and build out its tech infrastructure for scalable growth.

"We are excited to grow our team and invest in infrastructure to seal partnerships that will enable us to build trust and help our community," said Kenny Salas, Co-Founder and VP of Operations & Finance.

Camino Financial also stands out as it joins the tiny minority (less than 1%) of venture-backed start-ups that are founded by Hispanics (source: CB Insights).

Sean states: "We have a dual sense of responsibility to Hispanics and other under-represented minorities aspiring to break the glass ceiling to access venture and bank capital.  We must validate that making a concentrated bet on Hispanic entrepreneurs and business owners is trend-setting bet that will generate above market returns.  Through Camino Financial, we plan to build momentum for re-investment in under-represented communities, including the Hispanic community.  And encourage these ventures be led by minority and women talent.  The potential is there, we just need to unlock it."

To learn more about Camino Financial visit www.caminofinancial.com.

About Camino Financial
Camino Financial is a credit marketplace matching small businesses with the most affordable funding option offered by its network of reputable lenders.  The Company specializes in originating loans for first-time business borrowers who cannot get a loan from a bank, and provides ongoing credit monitoring and advice to ensure clients improve their business credit in an effort to qualify for a bank loan.