1 00:00:00.000 --> 00:00:02.961 ♪♪♪ 2 00:00:03.878 --> 00:00:05.338 Sean, thanks for doing this again 3 00:00:05.338 --> 00:00:06.673 No problem. Happy to be here. 4 00:00:06.673 --> 00:00:07.674 So lets get straight to it. 5 00:00:07.674 --> 00:00:10.218 So what trends are you noticing right now? 6 00:00:10.218 --> 00:00:13.972 I get the trends question all the time. 7 00:00:13.972 --> 00:00:18.226 I will tell you that there is actually a trend now 8 00:00:18.226 --> 00:00:19.519 There is a shake up happening. 9 00:00:19.519 --> 00:00:21.604 That shakeup that people have been talking about for years 10 00:00:21.604 --> 00:00:22.897 It's actually occuring. 11 00:00:22.897 --> 00:00:26.317 I think we've all heard and read over the past 5 years 12 00:00:26.317 --> 00:00:28.820 about how consolidation and acquisitions are going 13 00:00:28.820 --> 00:00:31.364 to happen and there's going to be this big shakeup 14 00:00:31.364 --> 00:00:33.742 and then it never really materializes and now all 15 00:00:33.742 --> 00:00:36.161 of the sudden there's a ton of activity happening 16 00:00:36.161 --> 00:00:38.788 and I think it's flying under the radar that 17 00:00:38.788 --> 00:00:42.959 So its like hey, wake up. this is literally the shakeup. 18 00:00:42.959 --> 00:00:45.211 I mean look, just in the last two months. 19 00:00:45.211 --> 00:00:49.466 You have Lendio who raised $55 million in a Series E 20 00:00:49.466 --> 00:00:52.552 Funding Metrics secured a $100 million credit facility 21 00:00:52.552 --> 00:00:54.679 Intuit is buying Credit Karma 22 00:00:54.679 --> 00:00:56.681 Lending Club is acquiring Radius Bank 23 00:00:56.681 --> 00:00:58.975 You have Visa aquiring Plaid. 24 00:00:58.975 --> 00:01:01.269 You've got Bitty, a merchant cash advance company 25 00:01:01.269 --> 00:01:03.438 in Florida, which sold a stake to an investor 26 00:01:03.438 --> 00:01:07.984 We've seen a few very small MCA companies acquire other ones. 27 00:01:07.984 --> 00:01:10.528 We've also got a number of companies in the industry 28 00:01:10.528 --> 00:01:15.825 where there has been some top level management changes like Nav and Fora Financial 29 00:01:15.825 --> 00:01:18.620 And this is a much less significant event, you know, 30 00:01:18.620 --> 00:01:21.039 but we acquired Daily Funder recently too. 31 00:01:21.039 --> 00:01:24.417 But you know things are happening I mean it's only March 32 00:01:24.417 --> 00:01:29.380 and we've got this COVID-19, Coronavirus thing looming in the background of the economy. 33 00:01:29.380 --> 00:01:31.299 We've got a presidential election 34 00:01:31.299 --> 00:01:32.801 and the stock market is doing backflips. 35 00:01:32.801 --> 00:01:37.806 So this is the shakeup. This year is probably the best window of opportunity 36 00:01:37.806 --> 00:01:41.935 in a while to raise capital or sell, or adjust for whatever is coming next. 37 00:01:41.935 --> 00:01:48.608 If you're sitting in your office wondering when the right moment is to make some kind of major move, it's right now. 38 00:01:48.608 --> 00:01:55.156 And Sean, are you noticing anything in regards to the small business finance front changing? 39 00:01:55.156 --> 00:02:02.122 Yes, I'm seeing a lot of cross-pollination, more so than ever before. 40 00:02:02.122 --> 00:02:05.166 We have brokers and funders from the MCA world going off 41 00:02:05.166 --> 00:02:08.461 and leading with different products now like equipment leases. 42 00:02:08.461 --> 00:02:12.298 We're seeing unsecured small business lenders dabble in commercial real estate lending. 43 00:02:12.298 --> 00:02:14.300 Some of these transactions now, you read the contract, 44 00:02:14.300 --> 00:02:16.427 and it's like hey, this looks like a mortgage. 45 00:02:16.427 --> 00:02:21.474 And it turns out some lenders are saying well, yeah, why not lend against property? 46 00:02:21.474 --> 00:02:24.102 There's collateral, we're more protected, we can do larger deals. 47 00:02:24.102 --> 00:02:25.979 I'll just give you an example. 48 00:02:25.979 --> 00:02:31.234 I went to a hard money lending conference last year just to learn what was going on 49 00:02:31.234 --> 00:02:32.819 to find out what was happening in the space 50 00:02:32.819 --> 00:02:38.199 and I bumped into way too many people there that I know. Worlds have truly collided. 51 00:02:38.199 --> 00:02:43.163 Is that why you're calling this year's Broker Fair a "commercial finance" expo? 52 00:02:43.163 --> 00:02:47.750 Yea.That's exactly why. That's what it is now. 53 00:02:47.750 --> 00:02:54.048 A big reason for a broker to go is to network with companies that are going to fund or lend to their clients, 54 00:02:54.048 --> 00:02:56.718 and if all they know is MCA or a few online lenders, 55 00:02:56.718 --> 00:02:59.179 they're going to die. Or if that sounds too dramatic, 56 00:02:59.179 --> 00:03:04.100 and you're like, hey I'm a broker and all I do is MCAs and unsecured business loans and I'm doing pretty good, 57 00:03:04.100 --> 00:03:07.270 that might be the case now. But is that a long term plan? 58 00:03:07.270 --> 00:03:10.899 Are you getting rich? Because if you're not getting rich now doing that 59 00:03:10.899 --> 00:03:14.110 it's not going to magically happen in the future by doing the same thing. 60 00:03:14.110 --> 00:03:21.659 I can tell you that I was an MCA broker in 2008 and there was a point where it's not that MCA approvals decreased, 61 00:03:21.659 --> 00:03:23.411 they shut off almost entirely. 62 00:03:23.411 --> 00:03:27.540 And I made zero dollars as a broker for like two months. 63 00:03:27.540 --> 00:03:31.544 Every single deal was getting declined, so can you handle making zero dollars per month? 64 00:03:31.544 --> 00:03:36.758 And, alot of people cant. So how are you hedging against that and what can you change about what you are doing now. 65 00:03:36.758 --> 00:03:39.802 To get to the next level is the question you have to be asking yourself. 66 00:03:39.802 --> 00:03:42.847 I'm telling you,the top players right now, and they don't all say it, 67 00:03:42.847 --> 00:03:46.017 they're brokering SBA loans, real estate deals, lines of credit, 68 00:03:46.017 --> 00:03:50.188 equipment leases, factoring. I see companies getting back into selling merchant accounts. 69 00:03:50.188 --> 00:03:52.732 You can meet all these types of companies at Broker Fair. 70 00:03:52.732 --> 00:03:58.571 You keep throwing "real estate" in there, do you know anyone who has been successful in real estate? 71 00:03:58.571 --> 00:04:02.450 Well it's funny you picked up on that. Real estate. 72 00:04:02.450 --> 00:04:07.830 We've got this really young very successful entrepreneur speaking at Broker Fair. 73 00:04:07.830 --> 00:04:09.749 His name is John Henry. 74 00:04:09.749 --> 00:04:13.544 and he sold his first company at 21 years old for $1 million. 75 00:04:13.544 --> 00:04:19.550 He was a venture capitalist afterwards the host of a small business help show called Hustle on Vice TV. 76 00:04:19.550 --> 00:04:23.221 And you know, he's 27 now, he has this incredible life story, and what is he doing now? 77 00:04:23.221 --> 00:04:26.724 He's a real estate investor. He tells me it's the best business that he's been in so far 78 00:04:26.724 --> 00:04:30.770 and that real estate is the #1 fundamental building block of wealth. 79 00:04:30.770 --> 00:04:33.606 And I think as time goes on more and more people and companies 80 00:04:33.606 --> 00:04:36.734 are thinking about what their assets are and the idea 81 00:04:36.734 --> 00:04:39.237 physical collateral, its just very very attractive. 82 00:04:39.237 --> 00:04:41.656 Wow, it sounds like things are really changing. 83 00:04:41.656 --> 00:04:47.036 And Sean, what advice would you have for viewers and readers in your opinion on what they should be doing. 84 00:04:47.036 --> 00:04:50.915 My advice would be. Whatever you were putting off to the future, 85 00:04:50.915 --> 00:04:54.627 Do it right now. This is the moment. 86 00:04:54.627 --> 00:04:58.339 And I will see you all at Broker Fair on May 18th in New York. 87 00:04:58.339 --> 00:04:59.340 Sean, thank you so much. 88 00:04:59.340 --> 00:05:00.341 Thank you. 89 00:05:00.341 --> 00:05:05.513 ♪♪♪