Entrepreneur Spotlight: Chonchol Gupta & Xavier Cabo of Rebirth Financial

Could you imagine New Orleans without her small businesses? Just a vast land of corporations and big businesses with no ties to or knowledge of the people or culture. Luckily, however, New Orleans is an oasis for small businesses. Whether you’re making healthy beverages like Renee Brown of Bayou Brew Wellness Tea, writing love notes to the city like Robert Fogarty of Dear New Orleans, or creating your own fashion line like Ayo Scott of NOYO Designs, us New Orleanians love to have things that are all our own.
Unfortunately, it’s not always so easy to start that small business. Like everything else, you need money (and a lot of it)…money for an office, employees, supplies, marketing, advertisements, etc. And most of us aren’t just sitting on a lump of cash to use and instead have to “figure out” how to get that money.

But, before you start going at it on your own, InthekNOwla has a great new resource for you, our new Local Entrepreneur Spotlight, Rebirth Financial, “an online marketplace that connects small business borrowers directly with individual and institutional lenders.”

Founded by Chonchol Gupta and Xavier Cabo in early 2010, Rebirth Financial is a small business on a mission to help other small businesses here in New Orleans. Spurred by the shortage of small business lending in New Orleans, Chonchol and Xavier decided it was time to do something. Chonchol explained, “There is a serious lack of small business lending in our city, so we asked ourselves, ‘How do we solve that InthekNOwla, Entrepreneur Spotlight, Rebirth Financial, New Orleansproblem? How do we get banks to lend? Or how do we spur the lending to small businesses who are the life blood of our economy?’ We knew about the growing peer-to-peer lending industry with businesses like Kiva and Lending Club, but still nobody was doing it for small businesses. Rebirth Financial is the first in the country to do it for small businesses and it’s starting here in New Orleans. Combined with all the other exciting things happening in the city, we hope that we can make New Orleans the alternative finance hub of America.”

And what a great name for a great small business in an even greater city to kick off this financial rebirth. Xavier said, “We wanted to give the company a name that would reflect it being founded in New Orleans. We plan to eventually take Rebirth Financial nationwide and we want it to be forever rooted here.” Chonchol added, “It’s a name that really signifies what the city is all about. Every disaster that has come this city’s way has caused a rebirth, a reimagining, and a reinvigoration. That New Orleanian spirit and culture is all about pushing through and moving forward. We’re really changing the finance system or rather causing a ‘rebirth’ of the finance system. We’re also causing a ‘rebirth’ of small business lending and that’s what we are at our core.”

So, how does Rebirth Financial work for both borrowers and lenders? “For the borrower, we help small businesses that have a hard time getting financing from traditional sources like banks or credit cards,” explained Xavier. “We connect them with lenders that can provide them with affordable financing. So, if I’m a business owner, I log on to RebirthFinancial.com and fill out the application. We review the information and if the application is approved, it gets added to our platform where potential lenders can access it and choose whether they want to invest in the business.”

“From the lenders perspective, the reason why they should invest throught Rebirth Financial is because they can get higher return rates than they would if they had their money in a CD or other type of traditional banking instruments,” Chonchol said. “People just like you and me can lend as little as $50 to the small businesses in our backyard to help move our communities forward. And these are businesses that maybe you’ve used or that you know. So, we give the lender the opportunity to lend directly to the small businesses around the city and all of Louisiana.”
InthekNOwla, Entrepreneur Spotlight, Rebirth Financial, New Orleans
Sounds like a win-win situation for both borrowers and lenders. Chonchol added, “We know every single bank and financial institution, so when a borrower comes to us, we know which institution is going to be the best fit for their specific needs and we pair the two accordingly. So, the lenders are winning; they’re getting an attractive return on their investment and helping the community and the borrowers are winning because they’re getting a lower interest rate and access to capital that they might not have had otherwise.”

In order to qualify for the program, borrowers must have a set amount of money that they are looking to receive (minimum $5,000) and must have been in business for at least 1 year. So for example, If a business owner needs $10,000, they apply with Rebirth Financial and lenders will be able to see all of the credit ratings and everything else about that business, from the business plan to the current source of funding, in order to make an informed decision about investing. As a result, lenders from all over feel secure enough to give money to the business to help them reach their goal.

Two of our Local Entrepreneur Spotlights have already teamed up Rebirth Financial for their financing needs, NOLA Food Delivery and NOLA Brewing. In fact, Rebirth Financial was able to help NOLA Brewing secure $390,000 for them to start canning their beers. How wonderful is it to see one small business helping and supporting another!

In addition to borrowers and lenders, Rebirth Financial also offers products to financial institutions. Chonchol explained, “Right now, you have the Small Business Administration (SBA) making loan guarantees. Say the SBA guarantees up to 80% of a loan. If the bank makes a $100,000 loan to a small business and the business defaults, the bank is only on the hook for $20,000. The SBA gives them the remaining balance, like federal insurance. What we do is allow the banks to make no-risk loans because we take that last 20% and let our lenders lend it, allowing the bank to make a no-risk loan to a small business. The business gets access to the credit, the bank makes a no-risk loan, the government is backing more than half of it, and our lenders are making a return on the portion that they back.”
InthekNOwla, Entrepreneur Spotlight, Rebirth Financial, New Orleans
Rebirth Financial also offers the “Community Reinvestment Act” to banks. In the 1970s, the federal government participated in “redlining,” where lines were drawn around low-income communities that were said to be at a higher risk for default. However, these communities tended to be minority communities. Nowadays, there’s been a big push to lend into these lower income communities, which is oftentimes hard to reach. People in these communities have to know that they can get bank loans (as most think they don’t have access). In fact, ninety percent of New Orleans qualifies for these incentives and Rebirth Financial facilitates this process, also. As Xavier noted, “The community is oftentimes the first institution that will lend to these underserved areas.”

Xavier and Chonchol both cite “speed, class, transparency, and flexibility” as the benefits of working with Rebirth Financial. “We can get a small business borrower a better rate than they can get from the banks and quicker than if they tried to do it for themselves. It’s also a lot cheaper to go through us and it’s a completely transparent process. Also, because we promote our borrowers so much to banks and other people, they’re also getting free marketing out of it. Our goal is to get you funded so we send you out to our whole network saying, ‘Hey look, this is a great company. Lend to these guys.’ Our product to the banks, as well as our customers, is the borrower. We’re small business guys and we understand how hard it is to make a dollar. So, we’re not in it to waste anybody’s time and money.

So what is it about New Orleans that has these guys just so in love? Xavier said, “I’m French, so the first day, I fell in love with the city. It’s one of the few places in the country with so much culture; it’s so unique here. We created this company because we wanted to return the favor since New Orleans has given us so much. We wanted to give something back.”
InthekNOwla, Entrepreneur Spotlight, Rebirth Financial, New Orleans
Chonchol added, “There’s always something to do here; you’re never bored in this city. From an entrepreneurial point of view, I’ve always said New Orleans was like the Wild West. There’s so much opportunity for a small business to succeed here. There’s opportunity that exists here that doesn’t exist other places. And people are really supportive of entrepreneurs here. If you got a crazy idea, people don’t laugh at you, they support you and that’s important.”

Small businesses supporting small businesses, what more could you ask for? As Chonchol noted, “You can put your money on the stock market and you can watch it go up and down, but why invest on Wall Street when you can invest in New Orleans. Small businesses are 95% of the job market in Louisiana; they’re the backbone of our economy.”

Invest in our community and watch us flourish.

For more information, please visit Rebirth Financial at www.RebirthFinancial.com, and on Facebook and Twitter. You can also catch Rebirth Financial every Saturday on AM 990 on WGSO.

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