In July, the business crossed a milestone of lending $100 million to more than 5,500 underserved small businesses.
The fintech now has its eyes on inking out a debt deal to boost its credit line to a level much greater than its current lending platform before the end of the year. It’s also closing a substantially larger capital raise than its $8 million Series A, according to Sean Salas, Camino Financial’s co-founder and chief executive.
“On the debt side, we plan to raise north of $100 million,” Salas said. “We’re going to do a dual announcement of the equity and debt. They’re going to be large numbers, which is going to be exciting.”
He declined to identify the unnamed backer for the debt offering or the investors with whom he is negotiating the Series B raise.
Salas founded the 7-year-old company while earning an MBA at Harvard Business School.
Last month, the company named Praveen Varma to its newly created position of chief risk officer. The move was part of an effort to further its alternative credit scoring models for the underbanked, taking out some of the bias in lending through artificial intelligence.
It has been nearly two years since Camino Financial closed an $8 million Series A funding round led by Mexico-based financial services company Crédito Real.
Prior to its Series A, Camino Financial raised $3 million in convertible debt financing led by Mexico-based venture capital firm DILA Capital, alongside Colombia-based 10x Capital Management and other existing investors.
Camino Financial offers microloans of about $16,000 to individual Latino businesses that generate an average of $300,000 in annual revenue. About a quarter of its borrowers don’t have a credit history.
During the pandemic, the company began conducting a quarterly survey to examine lending patterns among Latino businesses. Salas said traditional lenders tend to favor non-Latino businesses with an average FICO score of 657 versus Latino applicants who have an average credit score of 641.
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