Florida Man

Florida, how do I love thee? Let me count the ways.

Running two businesses in Jacksonville has enriched my appreciation for the community I’ve called home for years. My affection runs deep.

First and foremost is stability. The stability we take for granted would take others by surprise. It’s neighbors you can depend on, colleagues you can trust.

Second, transparency. What you see is what you get. Backroom deals and mixed motives don’t fly here. Sincerity and honesty own the day.

Third, camaraderie. Of the 200 or so bankers in Jacksonville, I’d estimate that I know 190 of them. When they encounter a business in need of a creative lending solution, they call. Not out of obligation, but with excitement to collaborate on a common cause.

Could we make more money in New York or San Francisco? On paper, perhaps. But would life be richer? Not a chance.

Debt vs. Equity

The most expensive way to fund growth is often mistaken for the least.

I’m looking at you, equity.

When you sell equity, you accelerate dilution. Potential upside transfers to your investors.

If things go well, it’s akin to wallpapering your office with winning lottery tickets.
And that’s not all. Equity is a marriage; debt is a date.

Equity investors wield influence. Once you cash their check, you’re joined at the hip. Yes, using simple leverage to fund growth or bridge gaps comes with interest. But if today’s loan funds tomorrow’s growth, the winning lottery ticket will be in your hands.

America Works Thanks to Business

One of my favorite quotes comes from a good friend who ran for Congress.

He campaigned with a memorable handout - a pin emblazoned with a concise reminder of his guiding philosophy: "America works thanks to business."

During this week of thanks, his refrain echoes in my mind.

America works thanks to business. Americans work thanks to business. American infrastructure works thanks to business. In our market system, business is the lifeblood of our economy. Those who herald new ideas, forge new paths, and employ our neighbors deserve our thanks.

So thank you, business community, for innovating, risking, employing, and investing our way to a stronger country. You have my respect and gratitude.

The Bathroom Stop

You’d be surprised how much you can learn in a bathroom.

A clandestine pit stop has long been one of my underwriting team’s best sources of intel. 30 seconds in the loo reveals more than you’d think.

How does the business treat employees?

Is the culture one of excellence or neglect?

Are repairs prioritized or procrastinated?

The answers to those questions coalesce into a single message: the “little stuff” adds up. The way you treat your people impacts how they treat their responsibilities. If the business owner rents, it reflects the way they treat someone else’s property. If they own, how seriously they take stewardship.

Admiral William McRaven went viral years ago for heralding a simple habit: “make your bed.”

I echo his sentiment from another angle: clean your toilet.

The 5 Whys

Why?
Why?
Why?
Why?
Why?

Widely credited to Toyota, the Five Whys are a key to unlocking the real reasons something is failing, flailing, or taking off.

“We can’t make payroll.” Why?

“Because there’s not enough cash in the bank.” Why?

“Our seasonal business won’t have another surplus until Christmas.” Why?

“We haven’t found a banker willing to consider seasonality.” Why?

“We haven’t looked hard enough.”

“Okay, so we can’t make payroll because we haven’t looked hard enough for a lender that considers seasonality. That, we can remedy.”

Stuck in a bind? Ask Why, then repeat until an action point comes into focus.

Behind the Masks

Looking for a fright? Remember the words of JFK: “The only thing to fear is fear itself.”

If borrowing feels scary, consider this: missed opportunity is scarier.

The illusion of bootstrapping is more trick than treat if you ask me.

Of the two paths to growth, one has the appearance of thrift but masks a costly reality: missed opportunity and unclosed deals. The other is costly on the surface but seizes opportunity behind the scenes. It makes time-bound deals and snags time-sensitive customers. Yes, it comes at a premium. But there’s a term for a cost with an ROI: an investment. 

Flexibility, The Ultimate Luxury

Of all the luxuries afforded by the rich, flexibility is one of the most overlooked.

Not by Oracle founder Larry Ellison.

Despite his multi-billion-dollar net worth, he uses leverage to fund his expensive (and generous) lifestyle.

Why? He believes in himself.

Ellison is so confident in the continued growth of his businesses that he sees cashing out as a cost, not savings.

It’s yet another example of how “the rich get richer,” but one we can all learn from. When growth is likely, leverage could be logical.

The Express Lane

There’s no way this is worth it. Right?

Wrong. Everything has a striking point. What’s the value of 20 minutes when the only thing greeting you at home is a microwave dinner and the evening news? Not much.

But when those same 20 minutes mean pulling into the hospital in time to cut the umbilical cord or arriving at HQ in time for big interview Suddenly, the price tag is justifiable.

The same is true in lending. Not all moments in the lifecycle of a business are equal.

When a dream customer calls with a time-bound order, a factory expansion might be warranted.
When an influencer features your product in their holiday gift guide, hiring up might be the only way not to blow your big moment.

And when continuing as a going concern is a concern, a few extra basis points are nothing to fear.

In my world, asset-based lending is priced at a premium. But it’s priced for performance. Sometimes, traditional lending won’t meet the deadline. Won’t seal the deal. Won’t meet the moment. When ABL does, it’s worth every penny.

Interest Rates Take a New Trajectory

Size doesn’t matter.

Trajectory does.

Last month’s fed cut has less to do about its amount than its direction – down.

Look at the charts. Interest rates rarely fluctuate. Instead, they tend to rise or decline repeatedly before pausing and reversing.

September’s rate cut marks a pivot. The Fed is in slash mode. The odds of rising rates anytime soon? Unlikely.

That’s a big deal for business owners considering adjustable-rate capital like asset-based lending. Chairman Powell’s move has a hidden message: cheaper capital is likely coming.

The world’s stubborn “wait-and-see” mode? It’s over.

Projects, investment, and growth? Game on.

The American Entrepreneur’s Advantage

The biggest advantage American entrepreneurs have? Most don’t even realize it.

As a Romanian-American, what strikes me most about U.S. entrepreneurs is not just their ideas, but their access to capital.

Elsewhere, scarcity of capital is one of the greatest challenges. In America, access is abundant, yet many still hesitate to use it.

“Cash is king,” some say. Others avoid debt at all costs. But rapid growth is fueled by capital. America’s reputation for risk-taking comes from both internal drive and external conditions.

Don’t take it for granted. Just ask some of the most successful entrepreneurs the country has ever seen.

How do you see capital: as fuel for growth or a risk to avoid?

Pumpkin Spice Lending? ABL & Seasonality

Pumpkin spice: valuable or not?

Judging by its faithful reentry into American culture every fall, its worth (to many) is high.

But let’s say you’re the company that manufactures the flavor year-round. You stockpile the shelf-stable syrup before delivering it to clamoring hordes in the fall.

Now, what if you require a line of credit in March? To many lenders, your business’s seasonality is a problem. Your treasured nutmeg-scented inventory could be deemed worthless.

Not so at Sawgrass Finance. Our asset-based lending model takes inventory into account and considers factors others don’t – like seasonality.

Pumpkin-spice hurdle? PSL frenzy can continue without interruption, thanks to the power of ABL.

Embracing a Bullseye in Specialty Lending

For years, I resisted the notion that I was a specialist.

“For any commercial lending need, call Marius.” After all, my Rolodex could surely meet the needs of any owner I couldn’t serve directly.

But I’ve learned that attempting to be “all things to all people” is the bigger risk. As Al Ries and Jack Trout explain in their book "Positioning," a brand that stands for something specific in the mind is more powerful than one that stands for everything.

Here’s the reality I’ve come to embrace: I specialize in helping business owners whose borrowing needs fail to check the boxes of rigid lending programs. Perhaps they have a trove of valuable inventory, but operate a seasonal business. Perhaps they’d make a great candidate for equity investment, but time is of the essence. I help them get credit for accounts receivable and inventory, literally and figuratively.

Do I hope bankers and business owners will think of me as more than that? Certainly. But when you paint a bullseye, some arrows strike the outer rings, too.

The Overlooked Advantage of EBITDA

Six letters haunt the sleepless nights of any business owner seeking acquisition: EBITDA.

The acronym is thrown around so widely, you’d think its repercussions would be universally internalized. You’d think – and you’d be wrong.

Case-in-point, a pop quiz: what’s the impact on the sale price of a manufacturing company borrowing at 5% versus 15%?

For a sale price garnered from a multiple of EBITDA, none. Mind blown? You’re in good company.

I get it: today’s interest rates are high. But EBITDA spells it out in plain letters: high interest rates are no hindrance if leverage produces profit.