There are historic moments during the life of a company that unequivocally define its future. These moments represent nothing more than unexplored opportunities for a company to take control of its future and launch forward or get left behind and lost in its inability to change and seize the circumstances laid before it. In June 2016, Marquette celebrated the one-year anniversary of joining UMB Bank, NA, a 103 year-old Kansas City-based bank. There’s no doubt that this single event marked the beginning of a new chapter for the company.
Almost immediately, we could see the opportunity that had been laid in front of us. But were we, as a company, ready to seize that opportunity? We had two choices: grab hold of the momentum and use it to our advantage or wait and let it drag us along in its path only to come out beaten and bruised in the process. We were definitely ready.
Operating with the same fundamental belief that customers and employees come first, the official merging of UMB and Marquette Business Credit matched up and rolled out seamlessly and it wasn’t long before things began to quickly materialize for us within the marketplace. Marquette now had the support of a big bank, a sizeable balance sheet, and lower cost of capital behind us which almost instantly made us one of the most desirable lenders at the table. By the end of 2015, Marquette closed the year with a record breaking $130 million in new business commitments with more than $84 million closing post acquisition. We had quickly expanded our lending capabilities out from the smaller end and into the mid-sized facility marketplace offering loans up to $25 million. The UMB treasury management team now available at our fingertips only enhanced the customer experience Marquette was able to now offer its customers. It was apparent the marketplace was ready for this kind of lender, one with the power and resources of a big bank, but with the customized and personal feel of a small town business. We had found our home.
Our growth had already started taking shape but Marquette needed to position itself to be ready to handle the changes that were taking place. Last November, the company was restructured to a national platform with the appointments of Ken Pardue as National Marketing Manager, and Greg Carasik as National Portfolio Manager. With key executives now in place, Marquette was poised for tremendous potential portfolio growth. Within months, the Chicago office expanded, hiring a new business development officer, and interviews began for another new business development officer to open our newest location in Kansas City.
That brings us to today. How does a lender, in today’s market, find such momentum? The lending market is no different than the industries we serve. Most customers and new ABL-ready clients have recovered from the Great Recession but are still finding it difficult to get the traction needed to actually start the growth process again. We are repeatedly seeing clients turning to ABL facilities to provide the working capital needed to leverage their companies to achieve their own growth plans, but underwriting can present its own hurdles that sometimes require a more customized approach to properly structure without overexposing risk. The mergers and acquisition market continues to be slow and most opportunities deal with recapitalizing existing portfolio companies. It seems most asset values have hit their peaks, with industries such as oil & gas and steel at historical lows.
To make the growth process even more difficult, though current ABL customers are healthier than they were three years ago, they are borrowing less money. This frustration among lenders to gain their own traction is seen time and time again as the big banks dip down into the lower middle-market and the non-banks price more competitively than ever before, all fighting to get and retain business.
So I ask again, how does an asset-based lender find the momentum to grow in today’s market? The answer is through opportunity, innovation and flexibility.
Our acquisition by UMB presented the perfect opportunity for us to offer the products, services and pricing that we couldn’t provide a year ago. This flexibility now allows us the ability to offer innovative and competitive structures to both new and existing clients.
Looking back, opportunity knocked at our door and we were ready to answer it. Will you be ready?