Highs and Lows: ABL Leaders Unpack 2020 and Prepare for 2021 - To get a handle on how the asset-based lending industry has traversed a tumultuous 2020 and where it is headed in 2021, ABF Journal spoke with executives from Siena Lending Group, Context Business Lending, PNC and BMO Harris in an exclusive Q&A.
The Rise of Bank-Owned Asset-Based Lenders that Act Like Non-Banks - Charlie Perer outlines an emerging trend of bank-owned asset-based lending divisions conducting business in a fashion similar to non-bank asset-based lenders while gaining an advantage due to the ability to price like a bank.
Growing Gerber: Exploring Gerber Finance’s Rapid Evolution in 2020 - Gerber Finance has been exceptionally busy in 2020. In addition to dealing with the COVID-19 pandemic, the company installed Jennifer Palmer as its new CEO and launched two divisions to better serve existing and prospective clients. Through it all, the company has maintained its dedication to service while keeping an eye on the future.
Callodine Commerical Finance Seeks a Bigger Piece of the Private Credit Pie - The Callodine Group became one of the newest entrants to the asset-based lending and private credit sector when it acquired Gordon Brothers Finance Company and rebranded it as Callodine Commercial Finance. With an experienced team in place, the new entity is looking to attack a market rife with opportunities.
Overlooked Assets: Using Patents for Financing New Businesses - The use of patents as loan collateral by early stage companies is extremely rare. But these companies can unlock the collateral value of their patents and secure cost-effective financing by using insurance to transfer business viability risks.
European Direct Lending May Help Bridge Gaps in Yield, Risk and Diversification - As the U.S. institutional investment market continues to grapple with the economic impact of the ongoing COVID-19 pandemic, Symon Drake-Brockman of Pemberton argues that looking to the direct lending market in Europe could be a solution.
Time is Running Out for Lenders to Protect Against Defaults on Non-Performing Loans - With COVID-19 causing a drastic decline in revenues for many businesses, lenders have made a number of accommodations for non-performing loans, particularly through short-term deferrals. However, as the pandemic rages on, Bill Lawrence explains why lenders need to be proactive to avoid risk.
Evaluating Working Capital in the ‘New Normal’ of the COVID-19 ABL World - As the COVID-19 pandemic ramps back up through the end of 2020 and the beginning of 2021, a tentative ‘new normal’ has set in for borrowers and lenders alike. Juanita Schwartzkopf explains how asset-based lenders should adjust their evaluation processes for working capital in this environment.
Introducing the Inaugural ABFJ 25: Celebrating the Most Innovative Companies in Commercial Finance - Commercial finance is a constantly evolving industry. What worked a decade ago might not be effective today, especially in the midst of a global pandemic that has made accessing liquidity even more important than ever. In good times or bad, the companies that stand out the most in commercial finance (and any other industry) are the ones that constantly think ahead and, well, let’s not hide from it, innovate.
Flexible Funding: Keys to Successful Partnerships Between Senior and Junior Lenders - Senior and junior debt providers frequently work together within a borrower’s capital structure, so a harmonious relationship between the lending parties is the key to a beneficial outcome. Jeri Harman of Avante Capital Partners and Alan Chen and Kate Jenks of Caltius Structured Capital provide a refresher course on the difference between the two types of lending and important considerations to ensure a successful partnership. They also share their thoughts on how the COVID-19 pandemic has shifted the market and the outlook for junior debt providers.
Ready For Anything: How CIT Continues to Evolve in the Asset-Based Lending Industry - CIT is an established name in the asset-based lending industry, but that hasn’t stopped it from continuing to evolve and innovate. In 2020 alone, the bank expanded its ABL division, hired a new ABL team leader and continued to close deals with its CIT Northbridge Credit joint venture, setting itself up for continued success in the marketplace.
All Systems Go: Inside Wingspire Capital’s First Year and Rapid Ascent - Since announcing its entrance into the asset-based lending market less than a year ago, Wingspire Capital has established itself as a competitive player in the industry. David Wisen, John Rosin and Ken Wendler explain how creativity and remaining humble have powered their first-year success and growth plans.
All Sides Covered: Small Cap Strategy Expands LBC Credit Partners’ Reach - LBC Credit Partners has a history of working in the middle market, but by creating two separate yet complementary investment strategies, it has developed an active pipeline in the lower middle market as well. Don Rice of LBC Small Cap explains the origins of the business unit as well as its approach and symbiotic relationship with LBC Credit Partners overall.
Who’s Next?: Marco Financial Breaks the Mold in Trade Finance - If you haven’t heard of Marco Financial yet, you will soon. The “tech-enabled” factoring startup launched in 2020 with its sights set on the SME and trade financing world, specifically in Latin America. The company currently plays on the lower end of the capital spectrum, with most of its initial deal opportunities below $1 million, but with an impressive executive team, a heavy reliance on technology and the financial backing of some heavy hitters in the venture capital space, the company is poised to grow far beyond its current capabilities.
The Next Frontier: ABL for E-Commerce /Direct-to-Consumer Companies - The transition to a more e-commerce-focused economy has been underway for more than two decades. At this point, it is no longer a trend but a permanent (and dominant) piece of the consumer spending landscape. Such a reliance on e-commerce will continue to call for a reimagining of how asset-based lenders provide capital to businesses that sell their goods virtually. In a Q&A for ABF Journal, Derrick Wong of Pacific Premier Bank spoke with Jessica Bates of Dwight Funding about the ins and outs of asset-based lending to e-commerce brands.
From Bad to Worse: Examining the Continuing Struggles of the Energy Industry - The energy industry was in rough shape when 2020 started and the COVID-19 pandemic has only created more difficult terrain. In a Q&A with ABF Journal, Craig Jones, senior director of the energy practice at Alvarez & Marsal, shared his perspective from more than 20 years in the energy industry on the obstacles energy companies are currently facing and how turnaround professionals can address them.
The Nuts and Bolts of a Workout In a Pandemic Environment - Workout activity has reached a fever pitch in the wake of the COVID-19 pandemic. Jeffrey A. Wurst provides important tips, recommendations and considerations for secured lenders looking to execute successful workouts with a growing population of distressed borrowers in the current marketplace.
The Evolution of the Crypto Market and its Role in Asset-Based Lending - The advent of cryptocurrency created a new asset class and in the years since its introduction has slowly created new opportunities in the asset-based lending market for crypto-backed lenders like SALT Lending.
Digitized Supply Chain Finance Extends Lifeline to SMEs - Digital supply chain finance programs are opening new pathways for lenders looking to support small- to medium-sized enterprises, which have been hit hardest by the COVID-19 pandemic. These resources will help provide liquidity now and should continue to be useful in the future.
Billion With A B: Yieldstreet’s Introduction to the Private Business Credit World - A new entrant joined the private business credit world in June, as wealth management and financial technology firm Yieldstreet launched its newest vertical. With long-time business partners Barbara Anderson and Larry Curran forming the core of the new group, Yieldstreet Private Business Credit aims to grow right alongside its borrowers and investors.
Stretching Out: SG Credit Partners Continues to Evolve from Cash Flow Lending Origins - SG Credit Partners was once a single product division of Super G Capital, but in 2018, Marc Cole and Charlie Perer decided to branch out by co-founding SG Credit Partners. Since then the company has expanded its product offerings, brought in a bevy of new talent and used an infusion of capital from Cynosure, 4612 Group and MidMark to position itself for further growth.
How Robotic Process Automation-as-a-Service Improves Performance During COVID-19 - Asset-based lenders can reduce costs, improve efficiencies and maximize prospects during these uncertain times and beyond by automating routine, rule-based processes. However, automation can often be difficult to implement, which makes Robotic Process Automation-as-a-Service an attractive means to enhance efficiency and better serve borrowers.
How Has the Paycheck Protection Program Affected Bank-Owned ABL? - The Paycheck Protection Program has been top of mind for many lenders, particularly banks. ABF Journal learned about the experience of bank-owned asset-based lending groups with the program as well as expectations and concerns for the future in conversations with four leaders in the industry.
New Levels of Uncertainty: Reflections on a COVID-19 Capital Raise - Finding the right partner to raise capital for a refinancing always has its challenges, but in the midst of COVID-19, those challenges have become more numerous and severe. Bayard Hollingsworth of Phoenix Management Services explains some of the considerations lenders and borrowers must focus on in this environment by looking back at a successful transaction made during the pandemic.
Confusion Mounts Regarding Bankruptcy Debtor Access to PPP - There are numerous uncertainties surrounding the Paycheck Protection Program, but one of the most puzzling is the Small Business Administration’s bankruptcy exclusion, which has been treated unevenly across the court system.
Veteran Recognition: Lane is a Turnaround All-Star for Willow Tree Consulting Group - Carl Lane wasn’t always in turnaround management, but he has become one of the top professionals in the field during the course of his career. With a focus on winning early and establishing relationships, Lane is set to lead Willow Tree Consulting Group and its clients through challenges in the present and future.
The Operating Cycle: Lame Lending School Concept or Key Performance Indicator? - Juanita Schwartzkopf of Focus Management Group argues that the operating cycle is more than just a simple calculation and walks through a real-world example to illustrate its importance for forecasting and managing working capital.
Self Disruption: Switching From an ABL Model to a Real Estate Model - By taking a new direction and consolidating its asset-class focus, Briar Capital transformed itself and found greater success than it ever had as a pure asset-based lender. The firm’s president, Jeff Van Sickle, describes the process of converting the company into a real estate financier for ABL borrowers and shares lessons learned along the way.
Lenders Should Prepare Now for the Distressed-Debt Aftershock of COVID-19 - The disruptions caused by the coronavirus (COVID-19) have been far-reaching and will continue to affect all industries in the months to come. These effects are only exacerbating what were already weekening corporate foundations. Michael Fielding examines what lenders should anticipate and how they can deal with distressed debt situations during and after the pandemic.
Providing Leadership in the Wake of the Coronavirus Pandemic - Brian Gleason of Phoenix Management Services details how executives must display the most important tenets of leadership to survive the economic turmoil caused by the novel coronavirus (COVID-19) pandemic.
A Healthcare Debtor’s Friend: Implications of the True Health Bankruptcy Decision - Tyler Layne and John Tishler of Waller Lansden Dortch & Davis dive into the True Health Chapter 11 bankruptcy case and the healthcare debtor-friendly trend seen in recent bankruptcy court decisions
THE IMPACT OF THE TARIFF WAR ON ASSET BASED LENDERS - No one wins a trade war. Hugh Larratt-Smith examines the current take-no-prisoners tariff battle between China and the U.S. and analyzes the impact on asset-based lenders.
FINANCING A COMPANY THROUGH ITS UPS AND DOWNS: A Primer for Borrowers - Middle market businesses experience different stages of growth and stagnation from start-up to success. Sometimes there is a need for restructuring to turn a struggling business around. Derrick Wong explains different asset-based loan options that can help a company achieve financial stability, whatever stage it may be in.
ABL: A Sensible Financing Option for Companies in Transition - With the current economic winds blowing cold one day and hot the next, companies with solid brands may still find themselves in need of restructuring. Borrowers looking to right the ships of business may find that asset-based loans are the best way to regain solvency. Peter Ulmer explains all the advantages that ABLs offer to the borrower under stress.
GOING UNDER FOR THE THIRD TIME? The State of Restructuring in Shipping - The ancient Phoenicians, plying their trade along the Mediterranean, were in thrall to the whims of the sea and never knew if their cargo would arrive safely or end up on the ocean floor. Today’s behemoth vessels are less threatened by wind and the waves than they are by government regulations and economic trade wars. George Mangos explains the complexity of restructuring in today’s maritime industry.
THE BANK ABL CONUNDRUM: Why Do Banks Fail to Sell This Excellent Product? - An increasing number of commercial banks are creating ABL divisions. Yet, as Charlie Perer muses, these divisions are still playing second fiddle to C&I and not receiving referrals from their C&I colleagues, even when ABL might be a more appropriate product and not utilizing it will cause a client to exit. He explains that breaking down the silos between divisions will serve customers more effectively and keep them as clients.
Finding White Oak: A.E. Wease Completes its Search for a New Lender - A. E. Wease Distributors, a 90-year old family-run business, spent five years as the borrower of a large Midwest-based bank. But the bank got cold feet about lending to Wease after a major customer was acquired and no longer needed a distributor. ABF Journal editor Nadine Bonner spoke with Wease’s Charles Tandy and Pete McCaffrey, who explained the process that brought them into a successful relationship with their new lender, White Oak Commercial Finance.
Lending to Technology Companies: Collateral versus Cashflow? - As the U.S. changed from a manufacturing to a service-based economy, ABL lenders faced a growing array of challenges, including lending to software companies and coping with rapid hardware obsolescence. Hugh C. Larratt-Smith speaks with key lenders in this industry and learns how lending to technology has changed in the last 40 years.
The Cryptocurrency Conundrum — A Primer for Secured Lenders Entering the Cryptocurrency Space - Like personal computers, smartphones and the internet, cryptocurrencies are here to stay. For the secured lender, the blockchain technology that protects the privacy of the borrower can present an obstacle to securing collateral and receiving repayment. Alan Rosenberg provides a detailed explanation of the technology and a guide for lenders to protect themselves in cybercurrency transactions.
Benefits of Fund-Level Debt in Acquisition Finance - Fund financing is one of the fastest growing areas of the leveraged loan market. Frederick C. Fisher, Zachary K. Barnett, Christopher M. Chubb and Anastasia N. Kaup explain the advantages of using fund level debt financing over traditional financing when acquiring portfolio companies.
Out of Retirement, Into a New Challenge: Fagnani Leads New Bank Leumi ABL Division - With roots in Tel Aviv and branches the world over, Bank Leumi lacked only one thing — an ABL division. The bank corrected the situation this spring and hired Mark Fagnani, a veteran of many outstanding ABL institutions, to lead it. Fagnani shares his vision for Leumi and his mantra for success with ABF Journal editor Nadine Bonner.
Factors Driving Success in Middle-Market Restructuring - What goes up must come down, and David Johnson points out that the current strong economy will eventually turn downward. Urging lenders to be prepared for the next downturn, he offers practical ways to assess a restructuring plan.
Pitfalls and Benefits of Offering ABL Loans to Large Public Companies - Lending to large, public companies can burnish an ABL lender’s reputation and offer a unique opportunity to expand its business model. Lon M. Singer explains how to navigate through these complex and ultimately rewarding deals.
Bank Leumi Hires Fagnani to Head New ABL Division - Mark Fagnani, head of Bank Leumi’s new ABL division, has spent his career at some of the nation’s top ABL lenders. Cartoonist Jerry Gonzalez illustrates the trajectory of Fagnani’s career.
2017 TMA Small Company Turnaround Award Winner: Vermont Aerospace Once Again Takes Flight - For 30 years, Vermont Aerospace crafted precision machinery for aircraft from its home in the Connecticut River Valley. A spiraling financial downturn combined with the unexpected death of its owner left the company reeling. After VA received the TMA’s 2017 Small Company Turnaround Award, the TMA invited attorney Cathy Reece to moderate a discussion by the turnaround team to learn how this unusual transformation enabled the company to avoid bankruptcy and retain its employees.
Results of the Capital One Annual ABS Survey: ABS, Technology on Upswing in Lending World - Thousands of financial professionals converged on Las Vegas in February for the annual SFIG Vegas event, providing a perfect opportunity to solicit their opinions on issues affecting the industry. Capital One conducted a survey at the annual conference, and Dave Kucera examines the results with ABF Journal editor Nadine Bonner.
TMA President’s Message Turnaround Management Association: Going Beyond the Ballroom - The Turnaround Management Association offers restructuring professionals tools and resources to succeed in their careers. The TMA Annual, scheduled for September 26 to 28 in Colorado Springs, CO, is a prime opportunity to network and connect with lenders and other professionals. This year’s TMA Global President, Kevin Krakora, head of KMPG’s U.S. Restructuring Practice, outlines the programs TMA is launching to expand the organization’s member benefits beyond the ballroom.
The Right Person in the Right Place: Robert Katz Enables Successful Turnarounds - No company wants to go through a turnaround process. Once the worst has happened, a company often needs the help of not only outside consultants, but lenders and creditors that won’t jump ship at the first sign of trouble. Turnaround professional Robert Katz, winner of this year’s M&A Advisor “Distressed M&A Dealmaker of the Year” award, discusses companies that have hit bottom and how they came out the other side.
She Persisted: Karen Sessions Takes the Helm at Bank of America Business Capital - Karen Sessions attributes her success in the finance world to refusing to take “no” for an answer. Her career took her to Fleet, Union, Wachovia and Wells Fargo banks before she landed at Bank of America almost five years ago. In November, she was named head of Bank of America Business Capital and Asset-Based Lending. Although she contends she was lucky, her business skills and determination to succeed have propelled her into her current role.
After a Volatile Political Year, What’s Next for Turnaround Professionals - After the 2016 election, Howard Brod Brownstein shared his observations of the challenges facing the turnaround industry. A year later, after the passage of new tax reforms and with the threat of tariffs and new world conflicts, he looks into his crystal ball once more to see what the future holds for the restructuring industry.
The New Industrial Revolution: Lending Opportunities Spurred by Growth of the Gig Economy - The war for talent is over. And the employee has won. Employees today demand the same level of choice, service and flexibility in the workplace as they do as consumers. As a result, we’re seeing a dramatic change in the shape of the global workforce. The rise of the gig economy is transforming work as […]
State Receivership: An Alternative to Bankruptcy - Filing for Chapter 11 protection can be an expensive procedure for borrowers and lenders. Keri Wintle discusses another option, state receivership, which can offer a more frugal avenue to achieve the same goal while offering all parties more privacy and greater flexibility.
Hercules Capital Acquires Gibraltar Business Capital - Hercules Capital purchased Gibraltar Business Capital to enter the ABL market. Cartoonist Jerry Gonzalez shares his take on this mythical matchup.
A Crucial Link in Complex Specialty Finance: The Role of Debt Advisors in Asset Based Lending - Navigating the waters of specialty lending can be a challenge for lenders not familiar with industries like education, staffing or cannabis. Debt advisors provide expertise in those areas and can broker deals, acting as matchmakers between borrowers and lenders. Hugh Larratt Smith takes a look at this rising industry and explains the value debt advisors can bring to specialty lending.
Instant Funding, Seamless Customer Transactions Fintech Lenders Transform Small Business Lending - In the past decade, growth in financial technology has spawned a new generation of online lenders. These lenders use the latest technology to underwrite and finance small business loans. Customers can apply online and receive funding in 24 hours in some cases. ABF Journal Editor Nadine Bonner speaks with executives from three fintech companies that specialize in small business loans.
New Directions: Bain Capital and Antares Capital Join Forces to Provide Unitranche Lending - Both Bain Capital and Antares Capital have global reputations as investment firms. So there was more than a bit of frisson in the lending world when the two companies announced a joint venture in December. This unique unitranche platform combines the strengths of both companies and provides an unusual opportunity for partnership. Bain Managing Director Michael Ewald and Antares Senior Managing Director Timothy Lyne share their thoughts about the new platform with ABF Journal Editor Nadine Bonner.
Once Again, the Bulls are Running: 2018 Citizens Bank M&A Survey Reflects Strong Sellers’ Market - In 2017, Citizens Bank took an unusual step with its annual M&A Advisory Survey — it polled business decision-makers before and after the election to test the impact. Optimism was high in the post-election survey, and in 2018, it is higher still. Ralph Della Ratta, head of M&A Advisory at Citizens Capital Markets, explains why this is a good time to sell and encourages lenders to push customers towards eager buyers.
Built for This: Courcier Raises the Bar for Hilco Construction & Transportation Advisory - With 30 years in the industry, Hilco Valuation Services has grown by bringing in value-added services. Its newest unit will cover Construction and Transportation Advisory. Bryan Courcier has the hands-on experience to not only develop the business, but to make it an authority.
Other People’s Money: What Turnarounds Teach Us About Working with Lenders when a Deal Goes South - While lenders carefully scrutinize companies seeking to borrow money, borrowers rarely exercise the same due diligence to screen potential lenders. No one embarks on a business venture planning to fail, but it does happen. Bayard Hollingsworth advises borrowers to investigate the ways lenders handle a deal that goes wrong before accepting other people’s money.
Accurate Appraisals Ground Airballs But Will They Hold Up if a Recession Hits? - The soaring stock market has resulted in a frothy ABL market with competition at an all-time high and liquidations, outside of retail, at a low. Appraisals from the Big Four firms have held up. Charlie Perer looks into his crystal ball to envision the ABL scenario when the next recession hits.
Understanding Borrowers’ Claims Against Lenders - Losing its business and having to repay its debts can compel a bitter borrower to retaliate against a lender, blaming the lender for its default. Jeffrey Wurst notes the courts do not always favor borrowers, as a recent suit filed against MB Financial Bank demonstrates.
Meta Financial to Acquire Crestmark - The year kicked off with the surprise acquisition of Crestmark Bank by Meta Financial. Jerry Gonzalez provides his illustrated take on the merger.