Every business started with a dream. A business loan can inject new life into that dream, especially when working with a responsible lender. At Camino Financial, we believe in transparency and integrity. Together we can realize your dream, and reach that unreachable star.

1. Loan Transparency
Confidential

2. Confidential
Our Story 2
“Small business
owners struggle.
We saw it in our
family…
we see it in our
community.”

3. 3Responsible Small Business Lending
Confidential
Camino Financial is the best alternative to a bank
when seeking a business loan.
Online marketplace matching your business with
alternative lenders that meet your needs.
simple• Quick • SAFE

4. Confidential
What’s Loan Transparency? 4
Loan: a sum of money that is expected to be paid back with interest.
Transparency: lack of hidden agendas or conditions, accompanied by the
availability of full information required for collaboration, cooperation, and
collective decision making.
Loan + Transparency: Simple and clear communication of
important terms and obligations related to a loan

5. Confidential
Why Should I Care About Loan Transparency? 5
Less Transparency = Higher Probability of Buying a Lemon
Less Transparency More Transparency

6. Confidential
Why Should I Care About Loan Transparency? 6
Reality Check: the lender is more knowledgeable about
business credit and structuring a loan than you.
Importance: Ensure the lender properly discloses everything
you need to know to make an informed financing decision.

7. What Do I Need to Know? 7
• Loan amount
• Cost
• Annualized Interest Rate
• Fees
• Repayment
• Frequency
• Payment Amounts
• Maturity Date
• Required collateral
• Limitations
• Pre-payment
• Covenants

8. Confidential
Benchmarks
• Interest Rate:
– SBA 504: ~4.3% (variable)
– SBA 7(a) Loans: 5.75% to 6.25% (variable)
– Commercial Vehicle Loans: 8.5% - 12% (fixed)
– Unsecured Long-Term Loans: 10% - 25% (fixed)
– Daily Payment Loans: 25% - 50% (fixed)
– Merchant Cash Advance: 40%+ (fixed)
• Fees
– 3% - 5%
– Note: the smaller the loan size, typically the larger the fee
• Tenor
– SBA Programs:
• Real estate: 20-25 years
• Equipment: 10 years
• Working Capital: 7 years
– Unsecured Term Loans: 1 – 5 years
– Daily Payment and MCAs: 3 – 24 months
8

9. Confidential
How to Evaluate a Loan Offer?
Business loans are different than consumer loans because you
only borrow money to make money
Ability to Repay
• How much cash does your business generate each payment period?
• Can you cover at least 1.25x the required payment?
• Are there payment periods in the year you can’t cover the payment?
Return on Investment (ROI)
• What’s the cash benefit you’ll get from the loan?
• When will you start making cash on the investment?
9

10. Confidential
Tips for Comparing Loan Terms
• Make sure you’re comparing apples with apples
– E.g. a real estate loan is not the same as an unsecured term loan for
working capital
• Measuring the cost
– APR vs. Interest Rate vs. Factor Rate
– Fees
• Don’t only focus on interest rate!!
– Are you willing to pay a higher rate for more money?
– Are you willing to pay a higher rate for lower monthly payments?
• Compare repayment schedules
• Ask for advice if you need help
10

11. Thank You
Responsible Small Business Lending
Kenny Salas
ksalas@caminofinancial.com
(800) 852-0655
caminofinancial.com

12. Appendix
12

13. Confidential
Measuring the Cost of Capital
Paid Interest
Monthly Interest Rate (Interest Rate / 12 Months)
X Ending Monthly Debt Balance
= Paid Monthly Interest
You Should Know that …
• Higher frequency = lower interest paid
• Shorter term = lower interest paid BUT higher rate
• Early repayment = lower interest paid
13

14. Confidential
Measuring the Cost of Capital
Factor Rate
Total Debt Obligation / Total Loan Balance
• Easy to calculate paid interest
• Fixed debt obligation, early repayment doesn’t impact cost
Transaction Fees
Typically calculated based on a % of outstanding debt.
• Paid at originally (and occasionally annually)
14

15. Confidential
Annualized Percentage Rate (APR) 15
Describes the interest rate for a whole year rather than just a monthly fee/rate,
as applied on a loan
Pros
• Standardized measure
• Includes fees
• Represents the actual annual rate
Cons
• Mislead from measuring the nominal cost of debt
• Rate may seem inflated for short-term commercial loan
o Long-term low interest: $100,000 SBA Loan at a 6% variable interest
rate, and repay monthly over 10 years, you will end up paying
~$133,224 to the bank (1.33x the original amount)
o Short-term high interest: $100,000 commercial loan at a 20% interest
rate repaid weekly for 1.5 years, the total repayment is $115,939 (1.15x
the original amount)