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Furniture maker finds affordable capital to pay off expensive online loans, set stage for growth

April 17, 2018 | Small Business Loans
Furniture maker finds affordable capital to pay off expensive online loans, set stage for growth, CDC Small Business

Nearly 20 years ago, Rafael Martinez labeled himself a “serial entrepreneur” and history has borne out his claim. He has started three successful small businesses in Los Angeles, including two vintage furniture enterprises.

Growing up, Rafael was surrounded by woodwork craftsmen in his family, but it wasn’t until 2008 that he seized an opportunity to start a new furniture retail business with his sister. As a buyer for Sunbeam Vintage, Rafael became captivated by iconic mid-century style furniture, which sparked a creative interest in launching his own studio. So in 2015, with his wife Leila, he opened California Modern Woodworks, a wholesale/retail furniture design company specializing in mid-century-style wood credenzas, tables and other vintage pieces.

While most furniture manufacturers take their production to Mexico and China, Rafael insisted on keeping his “homemade” production in Los Angeles where he could ensure the highest quality control and also create jobs for local residents. He and Leila make all their furniture in their production facility in the Florence-Graham neighborhood south of downtown L.A.

You’ve got to believe in your idea, venture outside your comfort zone at times and practice patience. Never give up.”

Leila Bardales
Co-owner, California Modern Woodworks

Rafael and Leila quickly developed a good reputation, attracting the attention of high-end furniture designers and other
customers, including restaurants, architects and a variety of corporations. But like so many small businesses, California Modern experienced growing pains. They needed working capital to buy raw materials and they needed the money fast so they secured two online loans, one of which carried an egregious interest rate of 39%.

Affordable Capital for Latino-Owned Small Businesses
Needing longer-term, affordable capital to support their production, Rafael and Leila were attracted to the Small Business Finance Fund (SBFF) because it’s affiliated with the nonprofit CDC Small Business Finance and focuses on assisting Latino entrepreneurs.

“It just wasn’t about dollars and cents to them,” Leila said about SBFF and its L.A. Director Antonio Pizano. “They were interested in our story and the big-picture plans of California Modern. They provided strategic financial direction for our company.”

SBFF granted California Modern a $150,000 loan to pay-off their expensive online loans, buy new inventory and hire five new employees. The new financing will also provide leverage as they look to expand into a new store-front location where customers can get up close and browse their unique furniture.

Benefits and Challenges of Entrepreneurship
Leila: “Yes, the hours are long, but every hour you work is an investment in yourself and the success of your business. You have your lows but every low tends to have a rubberband effect, catapulting you to a new high. You’ve got to believe in your idea, venture outside your comfort zone at times and practice patience. Never give up.”

Experimenting Meets Good Fortune
Leila: “We’ve been active in social media and connected with fashion designer and social “influencer” Chiara Ferragni when she said in her blog she was moving and asked for suggestions. She liked our furniture and posted one of our pieces on her Instagram where she has 10 million followers. We got 85,000 Likes and tremendous exposure.”

“Defying intuition, we accepted an invitation from the L.A. Smorgasburg to display our furniture. The place is all about food, but the people that attend are open to new things. We sold $5,000 in furniture that day and we’re still getting residual orders. It all happened because we were willing to experiment.”

To check out the beautiful furniture crafted by Rafael and Leila and support small business, visit California Modern Wookworks. If you’re a small business owner interested in learning more about using capital to grow your company or how to escape high-interest loans, visit It’s Your Business…Grow it! or email loaninfo@cdcloans.com.

In case you missed it, here are a couple other inspiring stories of small business growth:
How Financing with Business Coaching Helped San Diego Beer Aficionado Launch Brew-Supply Shop
Bike Shop Steers to Growth with Technology and Customer Service

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