1 00:00:00.460 --> 00:00:04.240 Hi everyone. I'm in the sponsor showcase room with Joshua Jones from Capita. 2 00:00:04.630 --> 00:00:05.060 Josh, 3 00:00:05.060 --> 00:00:08.080 can you tell me a little bit about capita for the people at home that don't 4 00:00:08.080 --> 00:00:08.910 know? 5 00:00:08.910 --> 00:00:11.120 Yeah. Um, so guys, cap Capita, 6 00:00:11.130 --> 00:00:14.640 we're both a lender and have a direct sales arm that incorporates a marketplace 7 00:00:14.640 --> 00:00:17.880 of a lot of the other lenders that are at the conference. Um, you know, 8 00:00:17.880 --> 00:00:22.320 we've been originating and lending on balance sheets since 2008. 9 00:00:22.920 --> 00:00:24.280 I came on board, uh, 10 00:00:24.620 --> 00:00:29.560 in 2016 and we built a really robust direct sales 11 00:00:29.560 --> 00:00:31.480 team and expanded our ISO presence. 12 00:00:31.860 --> 00:00:35.160 So how would you say, um, the company has been doing so far? 13 00:00:35.210 --> 00:00:38.920 We're now in quarter three. Tell me a little bit about what's been going on. 14 00:00:39.430 --> 00:00:43.520 Yeah, I think the most important things for capita is expense management, uh, 15 00:00:44.060 --> 00:00:46.920 and our financing for the company, right. 16 00:00:46.920 --> 00:00:49.400 When you look at any financial service company, uh, 17 00:00:49.430 --> 00:00:52.760 without those two critical factors being really managed, uh, 18 00:00:52.780 --> 00:00:54.560 you're gonna have the best origination arm, 19 00:00:54.580 --> 00:00:57.280 but you're not gonna be profitable on the back end. So we both, 20 00:00:57.460 --> 00:01:01.480 we focus on driving revenue, but bottom line net profit is, 21 00:01:01.540 --> 00:01:03.520 is something that really capitalist prides himself on. 22 00:01:03.530 --> 00:01:06.480 We've been profitable every year since 2008, um, 23 00:01:06.490 --> 00:01:09.200 which I don't think a lot of companies in this space, especially at our size, 24 00:01:09.380 --> 00:01:11.680 uh, really can speak to. Um, so that's, 25 00:01:11.680 --> 00:01:14.800 that's really what we've been focused on is that expense management, um, 26 00:01:15.660 --> 00:01:17.080 and really, uh, 27 00:01:17.350 --> 00:01:21.160 looking at how we are gonna upsize and continue to fund the business that's 28 00:01:21.160 --> 00:01:21.940 coming through the door. 29 00:01:21.940 --> 00:01:24.960 Gotcha. And you guys have been in the news a lot, 30 00:01:25.080 --> 00:01:26.520 a lot of new things going on with the company. 31 00:01:26.520 --> 00:01:28.640 You've increased funding by 95 million. 32 00:01:28.980 --> 00:01:31.320 Can you tell me a little bit about that and how that came about? 33 00:01:32.230 --> 00:01:36.120 Yeah, so Upsize and our securitization was roughly $70 million. Um, 34 00:01:36.990 --> 00:01:39.280 what happens is every time you file for securitization, 35 00:01:39.330 --> 00:01:43.560 which is the public issuing of bonds against a portfolio that we originate, um, 36 00:01:43.860 --> 00:01:46.840 you know, there's, there's only so much you can fill in that vehicle. 37 00:01:47.490 --> 00:01:51.320 We've loved what the securitization markets have done for us. Um, 38 00:01:51.550 --> 00:01:53.560 it's provided access to capital at a really low cost. 39 00:01:53.620 --> 00:01:57.360 Now we all know that cost of capital has gone up significantly, um, 40 00:01:57.780 --> 00:02:02.160 but our blended rate is still what we would consider some of the best in the 41 00:02:02.360 --> 00:02:02.860 industry. 42 00:02:02.860 --> 00:02:06.000 So what we've been really focused on doing is upsizing in smaller tranches. 43 00:02:06.580 --> 00:02:11.160 So we have our very good rates in our biggest securitization vehicle 44 00:02:11.780 --> 00:02:15.880 and we've had to accept the higher rates in some of the smaller vehicles. But, 45 00:02:16.060 --> 00:02:18.440 um, with growth, you just need more access to capital. 46 00:02:18.500 --> 00:02:20.840 And that's really what it was about. We, we've, 47 00:02:21.180 --> 00:02:25.080 we have planned a conservative go growth track, which is kind of an oxymoron, 48 00:02:25.460 --> 00:02:28.960 but, uh, our growth is really coming from better credits. Uh, 49 00:02:29.060 --> 00:02:31.120 and we needed the vehicle to fund them, 50 00:02:31.120 --> 00:02:34.360 especially with some of the better credits going out longer in term, uh, 51 00:02:34.470 --> 00:02:38.080 it's definitely cash consumptive. The longer terms you have in the portfolio, 52 00:02:38.260 --> 00:02:41.360 and given our portfolios are roughly, uh, 53 00:02:41.380 --> 00:02:43.680 it looks like a seven 17 average credit score, 54 00:02:44.010 --> 00:02:45.400 seven and a half years time in business, 55 00:02:45.860 --> 00:02:48.600 you find our average term about 17 months. 56 00:02:48.900 --> 00:02:51.320 We need more facilities to keep up with that. Right. 57 00:02:51.580 --> 00:02:51.980 And my, 58 00:02:51.980 --> 00:02:55.000 one of my follow up questions was gonna be how are you guys able to maintain 59 00:02:55.000 --> 00:02:57.640 that growth with all the speculations about the economy? 60 00:02:58.200 --> 00:03:01.000 Everyone's saying we're going to a recession, some people are doing good, 61 00:03:01.000 --> 00:03:02.360 some people are doing not so good. 62 00:03:02.420 --> 00:03:05.080 How are you guys able to maintain that stability? 63 00:03:05.630 --> 00:03:06.600 Yeah, I think, you know, 64 00:03:06.600 --> 00:03:09.960 anybody who says they haven't seen disruption in credit, uh, is not, 65 00:03:10.660 --> 00:03:12.040 is not telling the complete truth. 66 00:03:12.230 --> 00:03:16.320 It's definitely been a disruption in the credit. Um, but again, 67 00:03:16.320 --> 00:03:19.200 continuously moving up market, which is our niche, has really helped. 68 00:03:19.260 --> 00:03:23.760 And then we support that with, uh, expense management and, you know, 69 00:03:23.780 --> 00:03:27.600 we have grown a lot overseas and shored a lot of our operational, uh, 70 00:03:27.670 --> 00:03:31.800 expense to an overseas group that is wholly owned by capita. 71 00:03:31.800 --> 00:03:34.840 We have Capita India, we don't outsource it. Um, and that, 72 00:03:35.070 --> 00:03:38.200 that really still again, helps us focus on bottom line growth, 73 00:03:38.790 --> 00:03:41.040 even in more of a turbulent credit environment. 74 00:03:41.610 --> 00:03:44.080 Right. I was gonna ask, how has it been a, um, 75 00:03:44.180 --> 00:03:48.280 how has it been for you guys bringing Capitas overseas and the market over 76 00:03:48.280 --> 00:03:49.113 there? 77 00:03:49.870 --> 00:03:54.250 So it's not as easy as anybody would really think. We, uh, we, 78 00:03:54.400 --> 00:03:56.210 when we decided to go overseas, 79 00:03:56.310 --> 00:04:00.410 we were leveraging an organization that specialized in providing the services 80 00:04:00.410 --> 00:04:04.530 that we needed to move overseas for cost management. Now, 81 00:04:04.710 --> 00:04:09.010 we didn't own that group. We acquired an organization over there, 82 00:04:09.030 --> 00:04:11.650 we rebranded that organization, capita, uh, 83 00:04:12.190 --> 00:04:15.090 and then because now it is a wholly owned subsidiary of ours, 84 00:04:15.090 --> 00:04:18.090 we've then been able to scale from there. Uh, you know, 85 00:04:18.160 --> 00:04:20.010 like anything in any business, 86 00:04:20.120 --> 00:04:22.530 it's really about your management team and having good people at the core. 87 00:04:22.950 --> 00:04:26.770 So we're fully functioning over there with an HR department leadership. Uh, 88 00:04:26.870 --> 00:04:27.970 and we really grown, again, 89 00:04:27.970 --> 00:04:32.450 the roles that it would make more sense to outsource from a cost perspective and 90 00:04:32.990 --> 00:04:37.010 the roles that are more, um, repetitive than others. It's, you know, 91 00:04:37.010 --> 00:04:41.490 some of the front end processing collections of step management, documentation, 92 00:04:41.830 --> 00:04:44.330 uh, segment segmentation, stuff like that. 93 00:04:45.000 --> 00:04:48.820 And what advice would you give to a company like you guys that is, um, 94 00:04:49.900 --> 00:04:51.620 inspired by you guys bringing your, 95 00:04:52.080 --> 00:04:54.380 the market over into India and they're trying to, 96 00:04:54.680 --> 00:04:57.260 to globally expand as well? 97 00:04:58.490 --> 00:04:59.180 Yeah, I, 98 00:04:59.180 --> 00:05:02.220 I think any business that's looking to expand really just has to look at their 99 00:05:02.220 --> 00:05:05.860 balance sheet and they have to take a look at where is most of the expense in 100 00:05:05.860 --> 00:05:06.680 this business. 101 00:05:06.680 --> 00:05:10.740 And I think what's unique about our business in a bad way is the amount of 102 00:05:10.740 --> 00:05:13.340 applications we all have to process to get to what we like. 103 00:05:14.000 --> 00:05:18.820 If you're able to take a look at those applications and, and, you know, 104 00:05:18.820 --> 00:05:21.100 move it into more of a cost effective process, 105 00:05:21.100 --> 00:05:23.220 whether it be digitizing the statements, 106 00:05:23.630 --> 00:05:28.060 going to actually a digital process that looks at a higher percentage of those, 107 00:05:28.280 --> 00:05:30.860 uh, those applications coming in, or again, 108 00:05:30.860 --> 00:05:34.060 human resources or human capital outside the country, I, 109 00:05:34.180 --> 00:05:36.940 I think that's what anybody should be focusing on. Otherwise, it, it's, 110 00:05:37.120 --> 00:05:39.300 you know, it's our, one of our biggest line items out of that, 111 00:05:39.300 --> 00:05:42.180 outside of that financing expense and management of that is critical. 112 00:05:42.400 --> 00:05:45.940 Gotcha. Well, thank you so much for talking to us about capitalist. 113 00:05:46.140 --> 00:05:50.260 I didn't realize how tall you were until I'm bringing the mic up and down. 114 00:05:50.510 --> 00:05:51.040 Right. 115 00:05:51.040 --> 00:05:54.180 But it's been great and I'm gonna talk to more people in the sponsor showcase 116 00:05:54.210 --> 00:05:57.100 room and get an idea of what's going on with their company and what they're 117 00:05:57.100 --> 00:05:59.100 seeing, uh, going on at the event today.