The Prestamos lending program offers the same thing that banks do: a sum of money with an interest rate -- but their appeal is their partnership with their borrowers.
“If they’re having issues, they come in and we help them. We don’t want them to fail, so we help them. A bank can’t do that,” said Emilio W. Gaynor, who is the Director of International Development and Business Enterprises at Chicanos Por La Causa (CPLC).
CPLC is a widely-recognized nonprofit organization that focuses on building strength in communities in the Southwest by integrating human and economic development. Within CPLC there is an economic development program which encompasses the small business lending program with which Prestamos is affiliated.
“We are an economic development catalyst. We help businesses with financing so they can operate,” said Gaynor.
Prestamos offers small business loans to entrepreneurs who don’t qualify for a bank loan, whether due to a lack of collateral, poor credit, or insufficient financial stability to personally fund their new business. They offer loans ranging from a micro-loan at $5,000 to a larger business loan of $500,000.
Prestamos’ loans often offer lower interest rates than a typical bank as well, boasting interest rates that are consistently 9 percent and below, according to Gaynor.
The Business Owners
“If we are struggling economically, they say we can ask for another loan,” said Carlos Calderon, owner of Mi Escuelita Child Care, addressing the fact that one loan may not be enough.
Calderon has been operating his business with his wife since 2012, originally hosting their child care services out of their own home before taking out a loan with CPLC to have a separate location.
“We saw one center empty so we were looking for help, and we found CPLC and we asked for the support. We applied, they approved us and we got a loan,” said Calderon.
Along with offering fiscal support for their clients, CPLC cultivates personal relationships with those who borrow from them, offering a wide range of services to aid businesses in operating and marketing themselves.
Calderon said that he expressed that he did not like his business' website at the time and said that CPLC offered to help him update it for free.
“(Another organization) was only by phone and with (CPLC) it’s personal--I went to the building on Buckeye Street and they helped me [with the new website],” said Calderon.
Gaynor explained that CPLC does not want the people they invest in to fail, which is why these services are offered.
“We are an economic development catalyst. We help businesses with financing so they can operate.” said Gaynor. “It is a mutual benefit for everybody.”
However, sometimes $500,000 is not enough. Gaynor also hinted at a deal that will be closed this month with an unnamed Mexican manufacturer, the value of the loan totaling to $1 million.
“(They currently don’t have) enough production to sell in the U.S. market,” said Gaynor. “They are opening a plant here… and we are able to provide a loan to them.”
Gaynor detailed that this would create 50 new jobs and provide the manufacturer with the ability to distribute in the United States, adding stimulation to the economy.
“This is unheard of,” said Gaynor.
Growth of CPLC
Edmundo Hidalgo, who is the vice president for Outreach and Partnerships within ASU’s Educational Outreach and Student Services, was the president and CEO of Chicanos Por La Causa for 16 years.
Hidalgo explained how CPLC has evolved since he became a part of it in the mid-eighties, saying that CPLC used to primarily provide for small businesses in rural communities. Now, he says, a lot of their referrals come from affiliated banks who can’t offer loans to businesses who need them.
“We would often use a phrase: ‘We do not give a handout in every opportunity, we give a hand up.’”
Hidalgo was not the first person to mention this phrase, reflecting the transparent and genuine culture of CPLC’s loan program.
Businesses turning to the small business lending program often were those who briefly had struggled to stay financially stable.
“What we often found was that the small businesses that we worked with were already successful, but just needed a little bit of push and access to capital”, said Hidalgo.
Sherry Sentgeorge, a chairperson on the Prestamos Loan Committee and former small business consultant for Prestamos, has extensive experience working in the small business lending program, even working for banks who were affiliated with CPLC.
“I worked in the trenches with the borrowers,” said Sentgeorge. “It’s a matter of job creation and putting people in a better situation so their quality of life is improved for their family.”
Borrowing from CPLC has stimulated growth for some borrowers beyond financial gain. Businesses such as Milam Glass Co. have had the opportunity to create new jobs, providing stimulation to the economy.
Alex Nevarez Senior, owner of Milam Glass Co., recalls a time when his business employed one-third of his current staff size.
“We started with about 20 employees and now we have 60,” he said. “[Prestamos] were a fundamental part to starting this company; they stepped up to the plate and I’ll work with them anytime.”
Dr. Saskias Casanova, a professor in the ASU School of Transborder Studies, views CPLC as a significant state-based resource to help those who have emigrated to the United States and are looking to establish themselves economically.
In 2014, a total of 203,555 clients were impacted by CPLC as a whole. Under the economic development pillar, 98 percent of clients were Hispanic, and 55 percent were female.
Sandra Haas, owner of Skin Care by Sandra, said that working with CPLC put her at ease by providing the technical support she needed to develop a website and key features such as online booking for her customers and online accounting to help her with budgeting.
“Overall, it’s been a good thing that I was able to follow my dreams and open my business with [CPLC’s] help,” said Hass. “Without their help I wouldn’t have been able to qualify for a small business loan for my company with a bank.”
Hidalgo mentioned that the Tucson Hispanic Chamber of Commerce also has an economic development program that focuses on providing small businesses with within its organization.
“You have to find ways to collaborate and find organizations with a similar mission and purpose…to try to also help others,” said Hidalgo.
The Tucson Hispanic Chamber of Commerce holds similar values to that of CPLC, and it reflects in their initiatives.
“The mission of the Tucson Hispanic Chamber of Commerce is to advocate for and provide services to help grow our members' businesses in our bilingual and bicultural region,” their website reads. “Our chamber… assists businesses in reaching the fast growing Hispanic market and pursuing international trade opportunities.”
Difficulties With CPLC
Some of the borrowers have faced obstacles in the process of borrowing money from the Prestamos program.
Haas said she had a hard time working with some of the employees and also has not seen an increase in clientele because of CPLC’s help, adding that as far as her business building skills it has been mostly her doing.
“It hasn’t really happened with me [growing business], I don’t have a lot I can say about that because they have not given me any businesses and that’s probably just because at the stage that I am in,” said Haas, adding that Prestamos brought a new person to help businesses with marketing and that she would be meeting with them soon in hopes of improvement.
When Calderon found a location to open up a second Mi Escuelita Child Care center, he said that he lost the space due to Prestamos taking too long to approve their loan.
Hidalgo views CPLC as a last step to their clients’ financial autonomy, serving as a stepping stone to the next level of growth in their clients’ businesses.
“Ultimately, that is the underlying value behind [CPLC]. It is a means to the end -- the end is economic self-sufficiency and a robust economy where people have choices,” he said.
