00:04.770 --> 00:07.440 Sean Murray: All right. Hello, everybody. I'm Sean Murray with 00:07.440 --> 00:10.500 deBanked and today I'm here with Trey Markel, who is a senior 00:10.530 --> 00:14.100 software specialist at Centrex Software. How you doing, Trey? 00:14.160 --> 00:15.660 Trey Markel: I'm good, Sean, how you doing, man? Thanks for 00:15.660 --> 00:16.050 having me. 00:16.560 --> 00:19.140 Sean Murray: No problem. So I've got a few questions for you 00:19.140 --> 00:22.020 today. What does Centrex do? Can you give me a little bit of 00:22.020 --> 00:23.880 background about yourself in the company? 00:24.110 --> 00:26.570 Trey Markel: Yeah, absolutely. So Centrex Software is just over 00:26.570 --> 00:31.070 10 years old. We are a ERP CRM software platform dedicated to 00:31.070 --> 00:35.090 the finance industry. So b2c finance, on the debt side, b2b 00:35.090 --> 00:38.180 finance on the debt side. So anything from CRM on the 00:38.180 --> 00:40.880 front-end, opportunity management for advances and 00:40.880 --> 00:43.340 loans and commercial mortgages and equipment financing down the 00:43.340 --> 00:45.920 middle. And then if you're a syndicator, or if you're a 00:45.920 --> 00:48.110 funder, and you're servicing your own portfolio, we have an 00:48.110 --> 00:51.380 entire servicing platform in the backend with you know, ACH 00:51.380 --> 00:54.050 processing credits out to your syndication partners and full 00:54.050 --> 00:57.560 syndication and investor portal and platform. So definitely kind 00:57.560 --> 01:01.280 of more of your, your full 360 all-in-one software platform for 01:01.280 --> 01:04.700 brokerage funds, I'm sorry, brokerage firms, funders and 01:04.700 --> 01:05.270 syndicators. 01:06.450 --> 01:09.240 Sean Murray: Interesting. So we speak to a lot of lenders, but 01:09.240 --> 01:11.850 not a lot of companies like yours. So I'm very curious, 01:11.880 --> 01:15.150 like, what trends are you seeing from your corner of the world? 01:15.180 --> 01:18.870 Are you seeing anything? Is there anything changed in the 01:19.380 --> 01:22.290 post pandemic era? Or I guess you call it the current pandemic 01:22.290 --> 01:24.480 era versus before? Like, what what do you say? 01:25.050 --> 01:27.780 Trey Markel: Yeah, absolutely. So, you know, obviously, no 01:27.780 --> 01:31.620 one's been through this type of economic situation before as far 01:31.620 --> 01:34.470 as kind of a global pandemic. And obviously, everyone from you 01:34.470 --> 01:36.120 know, from everyone here at Centrex Software, we have 01:36.120 --> 01:39.480 everyone staying safe. But what what's what's what's been 01:39.480 --> 01:42.450 interesting, and, you know, as we expected, we saw a nice hit, 01:43.560 --> 01:46.260 you know, January, February, March timeframe on our 01:46.260 --> 01:49.140 portfolio, what was the most interesting to us, however, is 01:49.170 --> 01:52.350 we didn't lose a lot of customers, I think we lost out 01:52.350 --> 01:56.580 of the over the 1,500, 1,600 finance firms, we have using 01:56.580 --> 02:01.350 Centrex, we only lost about 10, 11 actual accounts. Where we saw 02:01.350 --> 02:03.960 the portfolio really kind of take a hit was in users, 02:03.960 --> 02:07.260 obviously, a lot of shops were forced to close down, everyone 02:07.260 --> 02:10.200 was, you know, you know, quarantining at home, and you 02:10.200 --> 02:13.020 know, team members decided to either leave shops, or, you 02:13.020 --> 02:15.480 know, unfortunately, a lot of owners decided to let go some of 02:15.480 --> 02:18.570 their team members. So we saw user counts as a software 02:18.570 --> 02:21.630 platform, we charge by user, and we saw user accounts really kind 02:21.630 --> 02:24.150 of hit the ground, you saw teams go home, and teams kind of, you 02:24.150 --> 02:26.640 know, take a break for a little while. And that only happened, 02:26.640 --> 02:30.120 however, for about two months. And then we saw it shoot right 02:30.120 --> 02:33.480 back up rather quickly. We're not back 100%. But we saw it 02:33.480 --> 02:36.690 come back very, very quickly. A few statistics that I thought 02:36.690 --> 02:41.730 were a little interesting is this exact time last year, 2019, 02:41.760 --> 02:45.480 January to August, and this time, this year, January to 02:45.480 --> 02:50.040 August, we're about 11% down in total funded deals Centrex 02:50.040 --> 02:54.000 Software portfolio-wide. But what's interesting is we're 28% 02:54.000 --> 02:58.500 down in the funded amounts. So the actual deals that were 02:58.500 --> 03:02.370 funded is about a 10%, 11%, down on the year from this time to 03:02.370 --> 03:06.210 last year at this time, but almost 30% down and the actual 03:06.210 --> 03:08.580 amounts that are being funded, right, which I guess makes 03:08.580 --> 03:11.010 sense, right. I mean, what we have more requests coming in, 03:11.010 --> 03:13.530 but we have less approvals coming in. A few other 03:13.530 --> 03:18.510 statistics that we found kind of interesting was funded deals 03:18.510 --> 03:21.360 versus unfunded deals, you know, typically here at Centrex 03:21.360 --> 03:25.620 Software, we have a very consistent rate of about 20%. of 03:26.250 --> 03:31.320 deals overall that are funded. So if we have you know, 100,000 03:32.610 --> 03:35.700 advances or deals come into the CRM, 20% of those we see month 03:35.700 --> 03:38.580 to month typically get funded. During the pandemic, right about 03:38.580 --> 03:41.100 February, March, that took a really nice hit down to 9%. 03:41.850 --> 03:44.250 Right, so out of all the advances that were created 03:44.250 --> 03:47.070 within Centrex Software portfolio-wide, only 9% of those 03:47.070 --> 03:49.470 advances were actually funded. And that's where it kind of 03:49.470 --> 03:53.400 bottomed out from our normal 20%. And then that only happened 03:53.400 --> 03:55.800 for about two months, like I said, and then we saw it, shoot 03:55.800 --> 04:00.990 back up to 16%. And stay around the 14, 15, 16% for the last two 04:00.990 --> 04:04.020 or three months. So definitely see kind of a nice hit as far as 04:04.020 --> 04:07.680 the ratio of total advances to funded advances Centrex 04:07.680 --> 04:11.670 Software-wide. Another interesting statistic that we 04:11.670 --> 04:17.250 have here as well, is the actual average advance payment amount 04:17.550 --> 04:22.500 shot up during March and April. So there's, you know, different 04:22.500 --> 04:25.410 ways to look at this. We have, you know, businesses couldn't 04:25.470 --> 04:28.350 pay their loans back or their advances back. So we saw some 04:28.350 --> 04:31.830 NSFs, saw some default rates, but then right kind of down the 04:31.830 --> 04:35.310 middle of the starting of the pandemic, March, April 04:35.310 --> 04:39.480 timeframe, the average advance payment amount shot way up, I 04:39.480 --> 04:42.990 mean, almost tripled, from what we typically see here. And I 04:42.990 --> 04:45.240 suppose you could look at that in several different ways. You 04:45.240 --> 04:48.030 know, we've got stimulus packages coming out. We have 04:48.030 --> 04:50.430 people opening up depending what state you are in, you know, 04:50.430 --> 04:52.470 businesses were opening up again, being able to start 04:52.470 --> 04:55.500 paying their advances or loans back again, so we saw that shoot 04:55.500 --> 04:57.810 right up. So it's been interesting. It's been 04:57.810 --> 05:00.270 interesting. We definitely have seen some dips in some areas, 05:00.390 --> 05:02.760 but we've seen it come back quite, quite rapidly. 05:03.150 --> 05:06.270 Sean Murray: So, um, I guess you could say I'm kind of pleasantly 05:06.300 --> 05:11.520 surprised to hear that. Do you feel like, it hasn't been as bad 05:11.550 --> 05:14.520 as you would have anticipated? Like, if you, you know, watch 05:14.520 --> 05:19.620 TV, it looks like the entire world and it completely. So do 05:19.620 --> 05:22.380 you feel like, you know, from your perspective, things could 05:22.380 --> 05:24.540 have been a lot worse? I mean, obviously, there were tips, but 05:24.540 --> 05:25.650 couldn't have been worse. 05:25.950 --> 05:28.950 Trey Markel: Absolutely. I mean, if you look back in 2008, where 05:28.950 --> 05:33.210 Centrex Software started in 2009 2010, I was in a different 05:33.240 --> 05:36.180 business, finance business. I mean, it was a complete and 05:36.180 --> 05:40.500 under disaster. So we were, we were looking for similar type of 05:41.220 --> 05:44.400 downfalls in this, in this, you know, with this pandemic, as 05:44.400 --> 05:47.040 well. And we thought it was going to be way worse. I mean, 05:47.040 --> 05:49.980 we were holding on tight, you know, thank God knock on why we 05:49.980 --> 05:52.140 didn't have to lay anyone off or furlough anyone here at the 05:52.140 --> 05:55.680 organization. But we, we thought it was going to be far, far, far 05:55.680 --> 05:58.590 worse. And we saw our curves as far as user counts kind of 05:58.590 --> 06:02.010 bottom out, and then slowly tick back up. I mean, all the 06:02.010 --> 06:04.230 managers and all the executives of the company started looking 06:04.230 --> 06:07.830 at each other with, with some, some, you know, some some smiles 06:07.830 --> 06:09.810 on their faces saying, oh, wow, we're, you know, we're headed 06:09.810 --> 06:13.050 back up here. But yeah, we were, we were, we were, we were not, 06:13.950 --> 06:16.320 we were not excited there lke most people for about two 06:16.320 --> 06:17.820 months. It was it was scary. 06:19.410 --> 06:22.440 Sean Murray: Yeah, I can only imagine. So if it wasn't as bad 06:22.440 --> 06:25.680 as it could have been, what is kind of your perspective for 06:25.680 --> 06:28.860 what's going to happen in the future? And have you been 06:28.860 --> 06:31.110 having- I guess this is a two part question. The first part 06:31.110 --> 06:36.300 would be, would be really, are people coming to you, for your 06:36.300 --> 06:40.110 service because of the pandemic maybe? They're like, wow, we 06:40.110 --> 06:43.620 really need technology to be able to streamline things. And 06:43.620 --> 06:46.740 then second part of the question would be, you know, where do you 06:46.770 --> 06:49.140 see things going? What's going to happen in the future from, 06:49.200 --> 06:50.190 from your perspective? 06:50.990 --> 06:53.870 Trey Markel: Yeah, you know, so we have absolutely seen a very 06:53.870 --> 06:57.770 nice spike in new leads coming to Centrex Software, both on the 06:57.770 --> 07:00.200 brokerage side. And on the funding side, you know, I think, 07:00.530 --> 07:04.100 during times like this, like we saw in 2008, it's very much kind 07:04.100 --> 07:07.100 of the reshuffling of the pack, right. And I think it's probably 07:07.100 --> 07:10.370 in multiple industries, not just ours. But you've got a lot of 07:10.370 --> 07:13.520 firms that want to start, you've got a lot of team members that 07:13.520 --> 07:15.980 were furloughed or laid off or decided to leave, they're now 07:15.980 --> 07:18.380 starting their own shops, because they feel like they can, 07:18.710 --> 07:20.540 you know, they can do it themselves. And they can have 07:20.540 --> 07:22.520 some team members underneath them, you've got a lot of 07:22.520 --> 07:25.250 brokers that want to become funders, and this is a great 07:25.250 --> 07:27.770 opportunity to do that. And you've got a lot of other 07:27.770 --> 07:30.770 organizations that have never been in cash advances before and 07:30.770 --> 07:33.350 they're starting fresh. They were in student loan 07:33.350 --> 07:35.240 consolidation, they were in debt settlement, they were in the 07:35.240 --> 07:37.430 mortgage industry, maybe other industries, and they're coming 07:37.430 --> 07:41.150 into cash advance, we just loaded a very large fund that 07:41.150 --> 07:44.030 typically funds two publicly traded companies. And now they 07:44.030 --> 07:46.040 want to get into merchant cash advance because they see the 07:46.040 --> 07:49.490 opportunity. So I think, you know, if you look at back in 07:49.490 --> 07:52.250 2008, it took, you know, quite a bit longer, and who knows how 07:52.250 --> 07:55.850 long this will take. But there was a lending boom, that 07:55.850 --> 07:58.850 happened shortly after, I mean, for obvious reasons. Businesses 07:58.850 --> 08:01.250 need money, they need money, they they've been forced to be 08:01.250 --> 08:04.040 shut down, you know, this time around, and they need to come 08:04.040 --> 08:05.690 back and they need to make money, they need to buy 08:05.690 --> 08:08.510 inventory, and do marketing and hire people back. And I think 08:08.510 --> 08:11.240 you'll see those those advance amounts and those advance 08:11.240 --> 08:14.180 requests, and those loan requests really go up. So I 08:14.180 --> 08:16.010 think, you know, depending on how you look at it, there's a 08:16.010 --> 08:19.340 boom to come in borrowing, and you know, and lending 08:19.340 --> 08:21.710 opportunities. And I think there's a lot of organizations 08:21.710 --> 08:24.140 out there that are starting to see that opportunity and want to 08:24.140 --> 08:27.620 set their foundation strong. And whether it's Centrex Software, 08:27.620 --> 08:29.840 or one of our competitors and other software platform out 08:29.840 --> 08:32.720 there. I think you're seeing a nice we are seeing a nice spike 08:32.870 --> 08:36.650 in, in, in an organization going to build those foundations. One 08:36.650 --> 08:39.500 of the things that we've done is kind of a gift for our clients 08:39.500 --> 08:41.960 here at Centrex Software, is we've taken our consulting 08:41.960 --> 08:45.410 packages, and we've we've cut 50% off the cost right off the 08:45.410 --> 08:48.110 top. So it's kind of our gift to anyone that wants to join 08:48.110 --> 08:50.660 Centrex Software. We say listen, we get it, we understand budgets 08:50.660 --> 08:53.540 are tight, this is a very unique time, here's our gift to you and 08:53.540 --> 08:56.450 how we can really build out your foundation strong. So when that 08:56.450 --> 09:00.410 boom does come, hopefully if it does come, you're ready for it. 09:00.410 --> 09:02.780 And you know, you've got some automation built in. You've got 09:02.780 --> 09:04.790 some team members that know there's a software behind them 09:04.790 --> 09:07.040 that are going to work on their behalf and you can really hit 09:07.040 --> 09:07.640 the ground running. 09:08.480 --> 09:10.580 Sean Murray: Trey that sounds great. Thank you so much for 09:10.580 --> 09:12.950 being here. Really appreciate your time, everybody. That was 09:12.950 --> 09:16.460 Trey Markel, who is a senior software specialist at Centrex 09:16.490 --> 09:17.180 Software. 09:17.750 --> 09:19.490 Trey Markel: Yeah. Sean, thank you so much for having me and I 09:19.490 --> 09:20.330 wish you guys the best. 09:20.720 --> 09:21.200 Sean Murray: Thank you.