This document provides a framework for evaluating key areas of business credit, including cash flow, capital structure, business attributes, and credit history. It discusses assessing annual sales, net profit margins, debt levels, customer concentration, seasonality, personal and business credit scores to identify strengths and areas for improvement. The presenters aim to help business owners learn how to evaluate their business credit and take action to strengthen their financial position for future growth.

1. How to Evaluate Your
Business Credit

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Strictly Confidential
Today’s Agenda
Learn how to evaluate your business credit
Use our framework to identify areas for development
Evaluate seven key business metrics
Take action of your business’ future

3. About the Presenter 3
Camino Financial Co-Founders
Sean Salas, CEO (right)
Kenny Salas, VP of Operations & Finance (left)
• Co-Founder & CEO of Camino Financial, a
financial services platform for small businesses
• Worked in private equity where he evaluated over
150+ middle market businesses and managed
companies with over $250 million in combined
revenue
• Former Investment Banker at UBS, where Sean
participated in several M&A and financing
transactions of global consumer products and
retail companies
• MBA candidates at Harvard Business School; BAs
in Political Economy of Industrial Societies from
the University of California at Berkeley
Born from small business. Passionate about building small businesses

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Key Trends in Small Business
• Businesses recovered from recession, but
concerned about capital spending, hiring and
higher healthcare costs
• Owners find it difficult to get access to capital
• Technology a key catalyst for growth, cost savings
and COMPETITION

5. The Four Key Areas to Evaluate Your Business 5
Credit
History
Business Attributes
Capital Structure
Cash Flow

6. Assess: Cash Flow 6
• Bigger is Better (and less risky)
• Smaller businesses are more
susceptible to risks:
 Limited resources to
compete against larger
competitors
 Early stage (or unproven)
business
 Undiversified
 Limited benefits from scale
 Undercapitalized
Annual Gross Sales

7. Assess: Cash Flow 7
• Net Profit (Pre-Tax) = Sales –
COGS – SG&A – Other Expenses
• Margin indicative of value
delivered to your customer and
operating efficiencies
• Benchmark against your
competitors (see BizStats.com)
Net Profit & Margin

8. Assess: Capital Structure 8
• Benefits of debt
 Accelerate growth
 Tax shield
 Build credit history
 Diversify personal net
worth
• Max Debt Capacity
 Leverage up to 80% of cash
flows generated over the
life of the loan
The Optimal Amount of Debt

9. Assess: Business Attributes 9
• What percentage of gross sales do
your largest 3 customers generate?
• Issues with High Customer
Concentration:
 Lose focus of small customers
 Neglect generating new business
 Lower profitability
Customer Concentration
Gross Sales by Customer
Top 3 Customers
Other Customers

10. Assess: Business Attributes 10
• Business dependent on
performance of “key” months
• Hard to make a seasonal business
not seasonal
• However, you can manage
seasonality:
 Working capital management
 Financial planning
Seasonality
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Revenue by Quarter

11. Assess: Credit History 11
• On-Time payment history
• Current level of debt
• Types of credit accounts
• Length of credit history
• # of recent credit applications
• History of delinquencies
Personal Credit (FICO)
FICO Range Assessment Risk
760-850 Excellent Very Low Risk
700-759 Very Good Low Risk
723 Median Score
660-699 Good Mid Risk
687 Average Score
600-659 Not Good High Risk
500-599 Poor Very High Risk

12. Assess: Credit History 12
• Takes credit to build credit
• Evaluated by several distinct credit
rating agencies using different
scoring scales
• Reputable credit agencies
 Dun & Bradstreet (“D&B”)
 Experian
 Equifax
Business Credit
Business Credit Score
Demogra-
phics
Public
Records
Credit &
Payment
History

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Next Steps
Review your business credit using our framework
Evaluate resources available to build credit
Invest in your growth

14. Q&A Session
Together Moving Forward
Contact Information:
Visit us at: www.caminofinancial.com
Call us at: (800) 852-0655