There is a wave of Latino entrepreneurship sweeping across the country. But, as the Stanford Latino Entrepreneurship Initiative recently found, that wave isn't cresting as high as it could, because while Latinos are starting businesses at an increasingly fast rate, many of those businesses don't grow past the initial phases.

It's a problem for Latinos, but it's also a problem for the economy at large: Stanford found the "opportunity gap" keeping Latino businesses from growing past the startup phase can be measured at about $1.4 trillion in economic activity.

Providing a path for Latino small business owners to get funding is the key to closing that gap, and one Latino startup is dedicated to doing just that.

Camino Financial is a growing online lending startup founded by two twin brothers, Sean and Kenny Salas, that finds alternative funding for small business owners who are struggling with credit or find themselves consistently turned down for bank loans.

The Salas's especially target Latino small business owners, which has made up the majority of their client base so far. But instead of just being a loan procurement company, the firm also provides guidance for building credit and growing the business.

Camino Financial is officially an online lending marketplace, but as co-founder Kenny Salas noted in an exclusive interview with Latin Post, "You could really position us as a small business advisor."

"We fundamentally believe that capital in isolation is not the solution," he added. "Especially working with a first-time borrower. They need more than just capital. They need guidance."  

"They need a path -- or in Spanish, camino -- towards building their credit history, getting their financial reporting on track, and finding the potential vulnerabilities in their business, said Kenny. "So eventually they can qualify to get a bank loan."

For Kenny and Sean, providing that path is both a unique business opportunity and a calling. That's because the Salas twins' have entrepreneurial roots in their family.

The Salas brothers' mother immigrated to the U.S. with a drive to go into business for herself. What happened to her (and the young Salas twins by extension) is the reason why Camino Financial exists.

"Our mother was a business owner," recounted Sean. "Over the life of her career, she opened over 30 Mexican restaurants in southern California. Unfortunately, after being in business for 25 years, she closed her doors down."

As Sean noted, the problem wasn't just because of a lack of funding. "It was for reasons that go beyond capital, quite frankly," said Sean. "Lack of resources, lack of talent and expertise around her to help her scale her business," but as Sean added, "and then capital, of course."

It's that full catalogue of entrepreneurial problems experience by their mother that eventually would inform Camino Financial's holistic take on providing financial support, as well as fiscal expertise, to their clients.

After their mother's last unsuccessful attempt at building a business, and a life, in the U.S., the Salas family had to move back to Mexico.

"Kenny and I were twelve when she closed her doors," said Sean. "So we moved back to Mexico and grew up in Mexico until we were 20 years old."

When Sean and Kenny were ready to leave the nest, they followed the same path their mother did, and came to the U.S. And the Salas brothers' journey comes across as a classic immigration tale, in the modern day. "We came back with literally a backpack and a laptop, and not a cent to our name," said Sean, "to re-pursue the American dream."

The brothers both went to U.C. Berkley for their undergraduate degrees, and spent several years after in internships and eventually full-time jobs in investment banking, specifically in the private equity lending market.

But, the Salas brothers decidedly were not  the stereotypical Wall Street personalities. "We both worked for private equity firms with an ethos around developing underserved communities," said Sean. Kenny worked for Palladium Equity Partners, the largest Hispanic-managed firm in private equity. Sean worked for ICV Partners, which specialized in serving the inner city.

"We had amazing experiences at these firms," said Sean. But he added that he witnessed first-hand the limitations of private equity for serving small businesses. "Private equity dollars only go into larger firms that are making at least $7 million dollars in cash flow," said Sean. "And the reality is, there aren't a lot of businesses of that size that are owned by Hispanics."

To put it another way, said Sean, "Our dollar wasn't going to directly make an impact on businesses near the profile of my mother."

Sean decided to apply to Harvard Business School, and Kenny followed suit. From the start, Sean had a good idea of what he wanted to use his education for. "I clearly stated that one of my intentions for going there was to create an incubator of some sort to help underserved businesses," said Sean.

While at school, he explored model after model of different financial services, looking for the right framework that would have helped his mother's business -- and now could help the wave of underserved Latino small businesses currently rising in the U.S.

"I learned a lot more about what different types of capital are available to this market," said Sean, narrating the process of elimination he went through at school: "Alright, private equity dollars are not the right way. What about growth equity?" said Sean. "Nah, that really doesn't work... Venture capital? No that's even worse," he recounted, "less than one percent of venture backed companies are founded by a Latino."

It was after Sean looked into small business loans from banks, that he discovered, firsthand, what the Stanford Latino Entrepreneurship Initiative's report recently described. "The banks," said Sean, "they weren't doing their jobs. In fact, the total amount of loans being deployed... for banks was decreasing consecutively for the last seven years after the great recession!"

After having decided that all of the standard financial service models couldn't help Sean serve the Latino small business community, he discovered an online and heavily technology-based financial services marketplace that was emerging at the time.

"They were finding unique ways -- through algorithmic-based credit underwriting and big data pools to automate the customer data-collection process -- to streamline what was a very antiquated and slow process for business owners," said Sean. "That just fascinated me, and from there really stemmed the idea for Camino Financial."

Sean was about to earn his MBA from Harvard, and immediately knew what he wanted to do right after.

"I kind of ran with it for a while, for actually 10 months" said Sean, who started Camino Financial by himself and is the firm's CEO. Kenny, who was also completing his Harvard MBA, wasn't far behind. "I was lucky enough to get Kenny really excited about joining," said Sean. "And slowly but surely it's been a snowball effect of getting the right team in place."

Camino Financial was officially launched in 2014. And now "slowly but surely" doesn't apply to the brothers' venture. Camino Financial has already deployed over $1 million in capital to small businesses in the company's short tenure. That's good business for the Salas brothers, as Camino is a for-profit company that charges a commission of between two to three percent.

In addition, just last week, the Salas brothers announced that they had closed a funding round, raising $750,000 in seed funding to help Camino, itself, grow into a larger business.

"That was a big deal not only for our organization, but for Latinos in general," said Sean. "That less-than-one-percent of venture backed companies that are founded by Latinos?" he continued, "That's an issue that we also had to address."

"I think we reached out to around 150 investors and got 140 no's," said Sean. "That process was very difficult."

But, as he believes -- and it might as well be the founding maxim of Camino Financial: "Success goes to the bold, persistent, and empathetic."