James E. Franz has over 30 years of experience in accounting, commercial banking and commercial finance, with the past 20 focused on ABL. He was a Partner at Keltic Financial Services in Tarrytown, NY and a Managing Director at Ares Commercial Finance. In May 2022, he co-founded Culain Capital to provide working capital solutions for small to midsize businesses across the U.S.
Franz’s core risk strategy is meeting clients in person. “I’ve avoided serious losses just by spending the time to meet borrowers face to face,” he says. “It’s the most important risk strategy you can employ.”
He sees fraud and cybersecurity as the biggest risks in specialty finance today. Franz has completed cybersecurity training and stresses that fraud still requires human intervention, but AI has enhanced the fraudsters capabilities. “This threat is real. You can do everything right and still get hurt. You need a plan — and revisit it quarterly.”
While technology has sped up decision-making, Franz warns against compromising risk standards for speed. “That’s how you get in trouble.”
He also flagged MCA debt as a serious post-funding risk. “It happens all the time. If you don’t catch it, it can destroy your client.” We have done our best to work with the MCA community by keeping the lines of communication open.
Technology supports every part of Culain Capital’s process — from sales to underwriting — but fundamentals still matter. “Tech speeds things up, but we must stay focused on the 5 Cs of credit,” he says. “I might be old school, but I don’t believe technology changes risk fundamentals.”
Looking ahead, Franz expects bank regulations to loosen under a Trump administration, allowing riskier deals. “This will impact the ABL market more than factors.”
His advice to aspiring risk professionals: learn every job in the organization. “The best business developers understand ops, finance and risk. They know how to handle objections — and that their real client is the credit team that must approve the deal.”
