“We’re Stuck in the Middle of the River Because of Financing”

Mario Jauregui of Spindle Cooling and Warehousing has had to piece together funding for his international logistics company.

January 25, 2019

| by Beth Jensen


Mario Jauregui, managing partner of Spindle Cooling and Warehousing in San Luis, Arizona. | Caitlin O’Hara

In a survey of more than 5,000 business owners, a Stanford GSB study found that Latino business owners often face discrimination when it comes to securing financing. Stanford Business interviewed four of these business owners, and this is one of their stories.

It’s tough to say what’s been more challenging for Mario Jauregu: importing and exporting perishable goods over one of the world’s most turbulent borders, or finding the financing to grow his business.

As managing partner of Spindle Cooling and Warehousing, based in San Luis, Arizona, Jauregui has used financing from home equity funds, loans from small and large banks, and money from “loan shark-type” lenders. Now, 13 years in, he faces yet another challenge.

“As we speak, we’re in the middle of terrific growth in the company, but we’re stuck in the middle of the river because of financing,” he says.

We need the capital investment from someplace where people understand our business, who can see that we’re solid, that we’re moving forward.
Mario Jauregui

Born in the tiny town of Ostotán in Jalisco, Mexico, Jauregui immigrated to the U.S. as a child and graduated from Arizona State University with a bachelor’s degree in business administration. In 2006, while working as a licensed customs broker, he was asked by one of his clients, Spindle’s previous owner, if he’d consider a joint venture to purchase the company out of bankruptcy. His cost would be $100,000.

“For us it was a lot of money, but luckily our home had appreciated that much, and we were able to get a line of credit from the bank,” he says. “We bought it for $650,000. The financing was difficult, but it was worth $2 million to $3 million at that time and a very good deal.”

Today, Spindle is an international logistics, freight, and warehousing company specializing in produce. It has about three dozen employees and is valued between $6.7 million and $7 million, Jauregui says. With much of its shipments traveling between the U.S. and Mexico, the company must ensure that each load complies with the demands of a wide array of governmental agencies, including U.S. Customs and Border Protection, the Food and Drug Administration, and the Department of Agriculture, as well as their Mexican counterparts. Jauregui and his team meet regularly with clients in both countries.

“We live in a small community,” Jauregui says. “If we didn’t do all this, we wouldn’t make it. But now because we are very specialized, it’s very difficult to compete with us.”

The company has never lost money, but financing hasn’t always been easy, Jauregui says. When his partner’s second produce business failed in 2010, Jauregui was forced to work with banks to consolidate the companies, giving him an extra building he was able to use for additional warehouse space and increasing his mortgage from $400,000 to $2.6 million. He ran into another challenge later, when he needed to purchase a $150,000 racking system. With few choices, he borrowed money through a company he found in an advertisement.

“We’ve worked with Wells Fargo, with Chase,” he says. “Sometimes they come through and sometimes they just don’t. In this case, we had to go after the expensive money to purchase equipment, paying more than 17%.”

Jauregui is now trying to finance a 25,000-square-foot freezer, projected to increase the company’s client base and revenue, but hasn’t been able to secure financing despite collateral and the company’s ongoing profitability.

“This is where a lot of businesses fail — they just give up,” he says. “We’ll find a way to make it happen. We need the capital investment from someplace where people understand our business, who can see that we’re solid, that we’re moving forward, growing the business, employing more people. Hopefully these big lending companies will consider partnering with us. I think this is lacking, maybe because they haven’t taken the time to understand us and what we do here.”

For media inquiries, visit the Newsroom.

Explore More