PHOENIX (By Luci Scott, Arizona Republic)
July 6, 2004 -
Hispanic small-business owners may soon have a new bank focused just on
their needs.
Articles of incorporation have been filed in Arizona for Sonoran Bank,
which hopes to open in Phoenix next spring with capitalization of $7
million to $9 million. It would be one of the first banks in Arizona to
specifically target the Hispanic small-business market.
The bank would focus on lending amounts of $50,000 to $300,000 or perhaps
a half-million dollars, a need not being met by large banks, said Ernest
Garfield, owner of Interstate Bank Developers, who is guiding the board in
creating the bank.
"Big banks do a great job on consumers and a great job on large
businesses," Garfield said, "but they really do not do the type of job
that small businesses need."
Chairman of the board of the new Sonoran Bank is Ricardo Torres, former
publisher of La Voz, a weekly Spanish-language newspaper.
Initial reaction among Hispanic small-business owners was positive. Rachel
Gomez, vice president of Rio Mirage Cafe, a Mexican food restaurant in El
Mirage, said she and her husband, Alex, struggled to get the funding they
needed to start their restaurant.
"We really need a bank that will really help Hispanics get started," she
said. "I know so many people who would love to be in business if they
could just get a small loan."
Hispanic blend
Garfield said the new bank would be "small-business-focused with a
Hispanic blend."
"There's a cultural mind-set that is involved here," he said. "And we'll
have bicultural or bilingual people working at the bank, and the ambience
will be somewhat Hispanic as well."
Latinos would feel welcome, he said, "but we don't want other businesses
to feel unwelcome."
Sonoran Bank probably would be in downtown Phoenix or west Phoenix, he
said. Although the bank would not turn away consumer accounts, it would
not actively pursue them. The bank would adhere to normal standards
required of businesses requesting loans, Garfield said.
The president, who has yet to be selected, would need to be "someone who
can gain the respect or has the respect of the community and also the
Hispanic community, and who is knowledgeable about running a small bank,"
Garfield said.
Applications for approval are expected to be filed with the state Banking
Department and the Federal Deposit Insurance Corp. this fall, after which
investors can buy stock, Garfield said.
Garfield said the bank's assets would come from investors. Plans are to
have $135 million to $150 million in assets within four or five years.
Rep. John Loredo, D-Phoenix. said there is a need for such a bank.
"Hispanic-owned businesses are really booming throughout the Valley. There
is need for the capital to invest in some of these small businesses," he
said. "And when these small businesses gain the ability to invest in their
business, they do very well."
Carlos Yado, owner of Azteca Electrical Construction Inc., said he applied
for loan after loan with major banks when he was trying to start his
business.
"We were trying to get loans from $20,000 to $40,000, but they want that
amount in collateral," he said. "If I had that, why would I need a loan?"
When the money didn't come, he said, he "decided that we were going to
build the business out of our pocket, and that's what we did."
Yado said he looks forward to a bank geared toward Hispanics who are
small-business owners.
"If there is a bank out there that wants to help out minorities, I'd be
the first to check it out," he said.
Community board
There should be a strong market for the bank's services, with about 28,000
Hispanic-owned companies in Arizona, Garfield said.
"If a small business doesn't have the capital and the banking
relationship, it's limited in its growth," said Garfield, who has founded
26 banks, 13 of those in Arizona and the rest in the Pacific Northwest.
Sonoran Bank would fill a void, he predicted.
Banking has become an entrepreneurial business in Arizona, fueled by the
state's economic growth and sizable profits to be made.
As the number of banks nationally has shrunk, Arizona's tally has nearly
doubled since 1995. Although community banks are popping up in various
parts of the country, the trend seems pronounced in Arizona.
Lawrence A. Pearl will serve as board vice chairman. Pearl founded a chain
of optical stores and optometry practices in 1973. He is founder and
senior vice president/chief financial officer of Best Buy Group, which
encompasses insurance and real estate brokerages, property development and
other businesses.
Other board members are:
Edmundo E. Hidalgo, a former Wells Fargo executive and chief operating
officer for Chicanos Por La Causa, a statewide community-development
corporation.
Loui Olivas, assistant vice president for academic affairs and an
associate professor at the W.P. Carey School of Business at Arizona State
University.
Guy P. Roll, an attorney.
Brian J. Boubek, founder of Cultural Experiences Abroad, a company that
provides study-abroad opportunities for college students.
Luz Sarmina-Gutiιrrez, president and CEO of Valle del Sol Inc., a
non-profit behavioral health and social-services agency.
Daniel J. Laraway, owner of Laraway Financial Group, a money-management
and financial-planning firm.
James H. Rike, owner of CalibeR Construction Inc. and JJELO Inc., a
real estate development firm.
Leslie C. Williams, a real estate developer.
