Interview with Chris Hurn (founder of Mercantile Commercial Capital and Fountainhead Commercial Capital) covering his career path through GE Capital, Heller Financial, and Marsh McLennan, his advocacy before Congress on SBA lending policy including work on the Paycheck Protection Program, and an explanation of SBA loan programs. Topics include how 7(a) loans (up to $5 million, ~10-year terms, up to 90% financing) and 504 loans (commercial real estate and heavy equipment, up to 90% project cost financing) work, their advantages over conventional financing (lower down payments, longer terms, fewer covenants), typical borrower profiles ($5–20 million gross revenue businesses), Fountainhead's role as a non-bank SBA lender, and potential legislative changes such as raising the 7(a) loan cap to $10 million. # Channel Presentation Observations — "Spotlight on YPO: Revolutionizing Commercial Lending, Chris Hurn on SBA 7(a) and 504 Loans" ## Video Format & Presentation Style - **Interview-conversation format**: The host conducts a long-form, casual one-on-one interview with a guest (Chris Hurn), opened with personal banter: > "well Chris when I start these things I usually welcome people to Puerto Rico" - **Host conducts recurring sit-down interviews**: The host references prior meetings and future plans with the guest, suggesting episodic relationship-based content: > "maybe 6 months from now we'll sit down again and track how your new marketing is going" - **Host references prior shared events** (e.g., "I met you shortly after that… with the PPP"), indicating the host is himself embedded in the same business/entrepreneur network as guests. ## Intended Audience - **Entrepreneurs, business owners, and finance-oriented viewers**: The discussion is technical on SBA 7(a)/504 lending (debt service coverage ratios, loan-to-value, personal guarantees) — content aimed at people who understand or seek business financing. - **YPO/CEO peer-group members**: The title names YPO explicitly, and a substantial segment discusses the guest's YPO experience, forums, and "CEO" (the next tier). The audience appears to include YPO-affiliated business owners: > "I know you've done a lot of stuff with YPO folks over the years and so that's been an important part of your life" - **Puerto Rico-based or Puerto Rico-connected audience**: The host's habitual welcome — "I usually welcome people to Puerto Rico" — suggests a geographic anchor for the channel's community. ## Claimed / Observable Scope - **Interviews with notable entrepreneurs and executives**: Guest demonstrates deep expertise in SBA lending, PPP, sports-team ownership (Ipswich Town, Rhode Island FC), and consumer products (Barcode water), framed by the host as "such an interesting professional development story." - **Business, marketing, and finance topics**: Extended discussion of direct-response marketing (Dan Kennedy, Jay Abraham), dimensional direct mail, and "omnipresent" marketing strategy indicates the channel covers entrepreneurial growth tactics, not just lending. - **Featured-guest spotlight format**: Title ("Spotlight on YPO") suggests a series highlighting YPO members. ## Self-Description Evidence (Creator Claims vs. Demonstrated) ### Claims by the Guest (not the channel) - Guest self-describes as known in his industry: "people in the SBA World know me as is probably the best in the space" (marketing) and "the world's most interesting lender" (a marketing persona he created). ### What the Material Demonstrates About the Channel - **Access to high-profile guests**: The host secures extended time from a founder/executive with Congressional testimony, PPP-era prominence, and Premier League-adjacent investments. - **Preparation and familiarity**: Host recalls details from prior lunches ("I remembered hearing your name on one of the Dan Kennedy sessions from like 15 or 20 years ago"), demonstrating researched, personal interviewing. - **Call-to-action behavior**: Host offers to link contact info in show notes — evidence of a podcast/video show with notes: > "We'll link it in the show notes" ## Notes & Limitations - **No curated metadata was supplied**, so all observations derive from title and transcript alone. - **No explicit channel self-description** (e.g., a stated mission or channel tagline) appears in the material; the YPO naming in the title is the strongest identity signal. - Nothing here supports inferences about the host's private motivations or channel-wide strategy beyond what is directly observable. # Delivery Observation: Chris Hurn Interview (SBA Lending / YPO Spotlight) ## Conversation Format & Tone - **Interview structure with a familiar host**: The exchange is casual and warm, with recurring host framing like *"great to have you"* and *"it's always awesome getting together with you."* The two reference shared history directly: *"I met you shortly after that… with the PPP."* - **First-person storytelling**: Hurn delivers nearly everything as personal narrative ("I worked at a high-tech startup," "I started lobbying the FED left and right"), rather than as abstract explanation. ## Recurring Linguistic Habits - **Filler "you know" and "uh/um" at high frequency**, suggesting unscripted, spoken delivery: *"you know sometimes these big life moments make you reassess things."* - **"So" as a narrative connector**: *"so we moved to Orlando," "so I launched my own company," "so uh so we didn't actually announce things."* - **Repetition for emphasis**: *"they want it out… they definitely want it out"* and *"it's it's it's pretty magical."* - **Self-corrections mid-sentence**: *"so uh so we didn't actually announce things"*; *"what what I would consider the small to midsize companies."* - **Rhetorical set-up then payoff**: *"think of it like an insurance product"* as a compressed analogy; *"I'm going to geek out on you for a second"* as an explicit framing device before detail. ## Number-Heavy Delivery - Hurn constantly anchors claims with specific figures, a stable pattern across topics: - *"85% of what we did was either SBA 504 or SBA 7A"* - *"a 1.15 times coverage"* - *"we did just under five billion and we did close to 300,000 PPP loans"* - *"we went from… a wire limit of 25 million we got it up to 175 million a day"* - *"rural town of… under 5,000 people"* with *"one stoplight when I was a kid now they're up to two"* ## Teaching / Explanatory Habits - **Anchors abstract concepts with concrete scenarios**: explaining the SBA "personal resources test" via *"if you have $50 million in a passport savings account and you want to borrow 4 million bucks."* - **Contrast structure** to teach differences: *"you might get a 1% response from that first touch but… you might get a 2% on the second touch."* - **Enumerated lists**: *"the the third thing I would say is we don't SBA doesn't have a bunch of strings attached."* - **Self-positioning as authority**: *"people in the SBA World know me is is probably the best in in the space"*; *"I've violated industry norms for two decades."* ## Humor & Self-Deprecation - A recurring pattern of dry or self-directed jokes: - *"I'm G to detox my liver for the next few days"* - *"if you just got rid of the uh the cap on compensation I could have stuck around longer"* - *"go buy a boat or something in order for us to do the deal"* - On the podcast name: *"sounds super exciting"* ## Named-Drop & Network References - Frequently cites specific people and institutions as evidence: Marco Rubio, the Federal Reserve, Dan Kennedy, Jay Abraham, Forbes, Fox News/CNBC. He credits sources explicitly: *"I learned this from Dan."* ## Emotional Register Shifts - Mostly light and fast-moving, but slows and becomes somber on 9/11 and PPP fraud: *"I lost some friends in the in the first Tower"*; *"it's really sad to see it."* - Reports emotion as past experience rather than performing it: *"it was really depressing to watch."* ## Uncertainty Notes - Hurn occasionally flags his own uncertainty on-air: *"I'm not going to quote it directly,"* *"I can't remember units,"* *"I believe is the number."* These are isolated moments, not a dominant pattern. - Tone is not directly observable beyond transcript content; vocal qualities (pace, pitch, laughter) cannot be confirmed from text alone. # Position Extraction: Spotlight on YPO — Chris Hurn on SBA Lending, PPP, and Entrepreneurship ## Speakers - **Chris Hurn** — career SBA/government-guaranteed lender; founder of Mercantile Commercial Capital and Fountainhead Commercial Capital; now president of a bank holding company's SBA division (identified from transcript context; interviewer addresses him as "Chris"). - **Interviewer (Paul)** — host in Puerto Rico; frames questions, contributes brief remarks (identified only as the person asking questions; "Paul" is named once by Hurn). --- ## 1. Professional Background ### Hurn's career path (as stated by Hurn) - Started post-grad school at a **high-tech startup in suburban Washington, DC**, moved into sales/marketing. - Joined **GE Capital** (small business group), transferred to Orlando ~27 years ago. - Moved to competitor **Heller Financial**; GE then bought Heller (Hurn jokes he could have been retained cheaper). - Joined **Marsh & McLennan** doing credit enhancements with insurance capital; the firm was "decimated" after **9/11**. Hurn states he lost friends in the first tower and that his first child was born 11 days before the attacks — a life moment that prompted him to start his own company "my way." - **2002: Mercantile Commercial Capital** — claims first small-business lender focused exclusively on **SBA 504 loans**; three consecutive years on the Inc. 500; sold to a local bank in 2010. - Stayed ~3.5 years at that bank; attempted to buy the business back (~60 days wasted, financing lined up) while the bank pursued a sale to a bigger bank. - **2015: Fountainhead Commercial Capital** — four consecutive Inc. 500 appearances; one of **14 non-bank SBLC licensees**; approved three days before Christmas 2018; announced February 2019 due to government shutdown. - Fountainhead was ultimately **wound down** after his private-equity partners (a hedge fund and asset manager) exited; ~95% of employees moved to his new venture. ### Current role (Hurn) - Joined a bank owned by a long-time friend (largest USDA B&I originator/servicer) as **second-largest shareholder, president of the bank holding company, and president of the SBA division**. - Plans to add **CDFI license, PACE loans, and potentially an SBIC** for preferred-equity/mezzanine financing. --- ## 2. SBA 7(a) Loan Positions ### Program parameters (Hurn) - **Cap: $5 million**, unchanged since 2012; legislation pending to raise to **$10 million** — Hurn calls this "long overdue." - Most versatile SBA product; uses include business acquisitions (~60% of his volume), working capital, owner-occupied CRE, equipment, partner buyouts, leasehold improvements, ground-up construction. - **~85% of Fountainhead's volume** was SBA 504 or 7(a); remainder low-LTV conventional CRE. ### Credit test - Lender must certify it **would not otherwise make the loan on the same terms** (regulatory requirement). Example: banks typically cap conventional owner-occupied CRE at 75–80% LTV. ### Structure - SBA provides a **guarantee (typically 75% of loan amount), not funds** — Hurn likens it to an insurance product. - Non-CRE terms: **10-year fully amortizing, no balloon; ~90% financing** vs. 70–80% conventional. - Key borrower benefits per Hurn: lower down payment preserving capital; longer terms reducing monthly cash-flow impact; **no restrictive covenants** — he argues technical defaults by banks "happen all the time" and matter in downturns. ### Borrower profile - Startups up to **~$100M gross revenue**; typical customer **$5–20M revenue**. - Underwriting: cash-flow (EBITDA) based; **minimum 1.15x debt service coverage** per SBA rules (historical or projected) — Hurn says this makes his credit box "much broader" than conventional lenders; **global debt service coverage ≥ 1.0x**; review of personal financials, liquidity, and full credit reports (not just FICO). He calls it "a little art not just science." - **Third-party business appraisals required** (regulatory), for acquisitions, equipment, and real estate; he has pushed back on valuation firms. - **Personal guarantees required on all SBA loans.** Hurn notes he has "very little sympathy" with complaints, having personally guaranteed hundreds of millions in warehouse lines. - **Collateral:** follows SBA SOP — *cannot decline a loan for insufficient collateral*; Hurn argues this is precisely why the guarantee exists. May take second/third positions on residences, UCC filings. - On foreign assets (interviewer's question): Hurn says "I wouldn't even touch them." - **Personal resources test eliminated** (per Hurn, ~six-to-nine months before the interview): previously barred borrowers with unencumbered non-retirement liquid net worth exceeding the project size. Hurn lobbied for its removal for years and argues it strengthens the guarantee portfolio by attracting financially secure borrowers. Example he gives: a doctor previously told to "go buy a boat" to qualify. --- ## 3. PPP Positions (Hurn's claims, some corroborated by interviewer's recollections) ### Scale - Fountainhead was the **sixth most active PPP lender**: just under $5 billion, ~300,000 loans. Wire limits raised from $25M to **$175M/day**; nine or ten days at that peak. - PPP totaled **~$796 billion** (Hurn's figure); initial announcement of $50B became $254B in the first round. Average SBA annual budget ~$30B — PPP was "20–25x" SBA's best year, which he calls the largest government program dedicated exclusively to small business, "the backbone of America." ### Fed liquidity facility - Hurn lobbied the **Federal Reserve** to extend the PPP Liquidity Facility (PPPLF) to non-depositories; found the legal basis in an **American Bankers Association white paper** (read in his sauna) describing the Fed's emergency powers. Claims Fountainhead was the **first non-depository** to borrow from the Fed under the facility, working with the Minneapolis Fed, and that its best practices were adopted for other non-depositories. ### Fraud warnings (preserved tension) - Hurn says he **adamantly urged requiring IRS tax transcripts** to validate financials; Senator Rubio's office (or a legislative director) responded they were "trying to get the money out the door as quick as we can" and would "clean that up later." Hurn predicted **10–15% fraud**; he says he was "prophetic," and that fraud in SBA-administered EIDL was worse than PPP. - Fraud observed: templated fake tax returns (940s/941s) on the dark web; identical marketing-expense figures, rounded numbers; internal fraud-detection checklist grew to 15–18 items. Staff heuristics: **callers cursing were likely caught fraudsters; callers crying were likely genuinely in need.** - Personal toll: ~40 lbs lost in April 2020, working ~20-hour days; **death threats**; a stalking incident resolved with an FBI special agent; he and two staff brought guns to the office. He states he "lost a little faith in humanity" (referencing a New York Times piece) because fraudsters "robbed funds from others who were deserving." - He criticizes Treasury Secretary Mnuchin's on-camera claim that borrowers could "walk in in the morning and walk out with your check that afternoon" as "ridiculous," and says the SBA administrator's public ticking-clock of remaining funds "created a tremendous amount of panic." - **Overall assessment (Hurn):** PPP "was overwhelmingly successful… to keep the American economy chugging along," despite fraud; it's "on the shelf" for future crises. He jokes his wife has threatened divorce over a hypothetical "PPP number four." - Partners' resistance: institutional investors "operate by spreadsheet," opposed PPP; Hurn "dragged them kicking and screaming"; only ~5,500 of ~11,000 financial institutions made PPP loans due to uncertainty. --- ## 4. Regulatory Advocacy (Hurn) - Testified before the **U.S. Senate Committee on Small Business & Entrepreneurship**; submitted testimony multiple times to House and Senate committees; lobbied trade associations. - Claims to be "the first guy pushing" for **SBA 504 refinancing** of commercial real estate. - Multi-year push for raising the 7(a) cap from $5M to $10M. --- ## 5. Sports & Consumer Investments (Hurn) ### Ipswich Town FC - Invested fall prior; team promoted from third tier to second; at time of interview in second place with two games left; promotion to the Premiership worth **"roughly about $400 million to the team."** He compares himself as slightly ahead of Ryan Reynolds and Rob McElhenney (Wrexham). Travels to the UK ~monthly. ### Rhode Island FC - Co-founded a USL Championship team with the same pension-fund partner; building a **$110 million soccer-specific stadium** on the waterfront, opening ~June 2025. His contribution: the **"sailgating"** concept (fans arriving by boat), likened to setups at University of Tennessee and Baylor. ### Investment philosophy (Hurn) - Explicit qualification: **"These are not going to be cash-flowing investments"**; he invests for fun and hoped appreciation/exit, since he has other traditional investments. Ipswich is "the pillar of the community," which he finds "pretty magical." He is not involved in Puerto Rican basketball and doubts it "rises to that level" (interviewer agrees: "no it does not"). - Both discuss being **Ted Lasso** fans; Hurn says he told his wife about the show in advance and convinced her to watch. ### Barcode (fitness water) - Invested via friends; sugar-free, monk-fruit sweetened, coconut-water-based with ashwagandha, vitamin D, magnesium; spokesperson **"Wemby"** (Hurn notes he mispronounces the name), one of only four endorsements alongside Louis Vuitton and (he believes) Nike. Official beverage of the Brooklyn Nets and Miami Heat, possibly the Spurs soon; Texas groceries; Costco trial. Launched ~nine months prior; five flavors planned. Hurn admits this is "a little outside my expertise" — advisory only. --- ## 6. YPO (Hurn) - Joined **2007 or 2008** (~15 years). Value: peer relationships ("it's lonely at the top"), forum participation, travel, and business — financed **~100 YPO members conventionally and ~900 via PPP**. He refused to let YPO members "jump the line" during PPP, offering instead to personally shepherd loans; some members' persistence annoyed his staff. - Now in **CEO** (the post-YPO organization), in a spousal forum with his wife. - Origin context: from a rural Illinois town (<5,000 people, one stoplight, now two); YPO supplied the peer group he lacked. --- ## 7. Marketing Positions (Hurn) ### Influences - **Dan Kennedy** (arena events in the 1990s, ~$300 cassette program his wife was "not happy" about) and **Jay Abraham** "revolutionized my thinking." Core lesson: "you're not in the business of running your business, you're in the business of marketing your business." - Self-taught — no marketing coursework despite two bachelor's degrees and a Wharton master's. ### Claims of firsts - First direct-response (non-"brochureware") website in the SBA finance space; first **video blog**; first **SBA podcast** ("SBA Loan Experts" — top in industry until wound down ~a year prior); Forbes columnist; repurposes content across channels. ### Doctrine - **"Omnipresence"**: no single silver bullet; sequential touches (1% first-touch response, 2% second, 3% third as illustrative figures); multidimensional database segmentation; weekly emails (80% shared / 20% customized); SEO, PPC, dimensional direct mail (e.g., "The 504 Code" Da Vinci Code-themed postcard sequence from Europe; "world's most interesting lender" campaign referencing the Dos Equis figure). - **Unconventionality thesis:** violating industry norms for two decades differentiates from banks, "terrible marketers" whose tombstone ads say nothing to the prospect; doing what everyone else does yields "reversion to the mean." - Claims everyone now knows him in his industry, so heavy creative marketing lapsed — but his team is restarting because competitors have copied him ("it always pisses me off"). - Interviewer's corroborating aside: Direct mail is underused now — "that's the time people should be doing direct [mail]." --- ## 8. Contact (as stated) - Company: **Community Bank Shares** (website being redone at time of recording); email ch**earn**@communitybankshares.com (interviewer jokes the domain spelling "churn" is bad marketing); otherwise "Google me" / social media. --- ## Preserved Qualifications & Tensions - Hurn's PPP evaluation is **dual**: overwhelming success **and** significant fraud/death threats/panic-inducing official messaging — both stated, not reconciled. - His partners' PPP exit: he frames their departure as both rational (fund time horizons) and "a shame" that broke up a war-tested team. - Borrower-eligibility positions carry explicit thresholds (revenue caps, DSCR minimums) that Hurn himself calls flexible ("art not just science"). - Interviewer and Hurn both flag Puerto Rican basketball as a contrast case where Hurn's community-pillar thesis does not apply (mutual agreement, stated explicitly). - Speaker identification beyond Hurn rests on transcript-internal evidence only (interviewer named "Paul" by Hurn; no curated metadata supplied). # Speaker Attribution & Provenance Record **Video:** Spotlight on YPO: Revolutionizing Commercial Lending, Chris Hurn on SBA 7(a) and 504 Loans **Video ID:** `01a168c8-a0c4-7127-874e-5f04d6c414ec` ## Speakers & Roles - **Chris Hurn** — **Primary guest / interviewee.** SBA/non-bank commercial lender; founder of Mercantil Commercial Capital (2002) and Fountainhead Commercial Capital (2015); currently President of the bank holding company and SBA Division at Community Bankshares (identified in closing contact info), second-largest shareholder. - **Unidentified host (calls himself Paul per guest's address "Paul")** — **Creator / interviewer.** Based in or recording from Puerto Rico; references prior lunches, PPP-era acquaintance, "Rob's birthday," and filming video footage earlier that morning. No third-party speakers, narrator, or additional voices appear in the transcript. ## Referenced Third Parties (claims made by speakers, not independently verified) - **Politicians/officials:** Senator Marco Rubio (Senate Small Business Committee chair at the time); President Trump (Oval Office PPP address); Treasury Secretary Mnuchin (press conference remarks). - **Institutions:** GE Capital, Heller Financial, Marsh & McLennan, U.S. SBA, USDA (B&I lending), Federal Reserve (PPPLF; Minneapolis District Fed), FBI (fraud investigations), American Bankers Association (white paper on Fed emergency powers), New York Times (profile of Hurn). - **Named individuals (mentioned only):** Dan Kennedy, Jay Abraham, Mark Victor Hansen, Tony Robbins, Norman Schwarzkopf, Ryan Reynolds, Rob McElhenney, Victor Wembanyama (spokesperson/investor relation for Barcode), 50 Cent, David and Guy (unseen at a London gastropub). - **Companies/ventures:** Ipswich Town FC, Rhode Island FC, Wrexham, Barcode (fitness water), Brooklyn Nets, Miami Heat, San Antonio Spurs, Costco, Gatorade/Vitamin Water/Prime (competitor references), Louis Vuitton, Nike, Forbes, Fox News, CNBC. ## Promotional Segments (flagged) - **Barcode fitness water** — on-camera product display and promotion of the guest's investment; endorsement and team-sponsorship claims promoted. - **London gastropub ("The Bar"/Bar Code bar segment)** — explicit recommendation: "anyone that goes to London should check it out." - **Closing call-to-action** — contact info for Chris Hurn (email, "Google me," social media), with host offering to link in show notes (uncertain whether included). - **YPO/CEO organization discussion** — positive personal testimony about memberships. ## Referenced Sources & Evidence - **No curated metadata was supplied** — provenance rests solely on the transcript. - Sources cited by speakers: ABA white paper (Fed emergency powers), SBA SOP, SBA legislation (7(a) cap pending increase to $10M), SBA "personal resources test" repeal (last fall), PPP/EIDL program figures (guest-stated: PPP ~$796B; ~$30B average annual SBA budget; ~7M small businesses helped). All figures are speaker claims, unverified. - Guest states he testified before the U.S. Senate Committee on Small Business & Entrepreneurship and submitted testimony to House and Senate committees. ## Availability & Uncertainty - **Comment availability:** Not stated in source material. - **Timestamps:** None present in transcript. - Host name is inferred from guest's address ("Paul"); not otherwise identified. - Guest's email stated as "churn at communitybankshares.com" — transcript rendering possibly garbled ("churn" vs. "churn C Hearn"). well Chris when I start these things I usually welcome people to Puerto Rico vaj jila here that's right great to have you hair absolutely thank you for having me um you just got back from Portugal last 2 2 am how was it it was great we had a good time 10 days saw four big cities and ate and drank way too much so I'm G to detox my liver for the next few days well I appreciate you coming out on a Sunday morning right back for this Chris what I really wanted to talk to you about is SBA Loans okay but you've got such an interesting um professional development story like I think I want to start going way way back okay so where did you get your start where did I get my start professionally or personally professionally okay um professionally I uh out of grad school I worked um I worked at a high-tech startup in uh Suburban DC Washington DC before that was trendy to do and uh quickly got into sales and marketing did very well uh to the point where recruiters Came Calling and um I listened and uh within a year year and a half I joined GE Capital back in the day when GE was the most respected admired company in the world um I started in working in their small business group and was only in the Washington DC office for about six months before they offered to move my wife and I to uh Denver Charlotte or Orlando and as a enlightened midwesterner as I say I've been trying to get to the sunshine of the South uh for many years and I just keep going further south of course so they so we moved to Orlando that was 27 years ago okay yeah and then I was there for um I was there for a while then uh I joined a competitor at the time uh GE Capital was the largest non-bank Linder at the time one of their big competitors was was heler Financial out of Chicago and I joined heler and then of course GE promptly bought heler and I always used to say you know if you just got rid of the uh the cap on compensation I could have stuck around longer you didn't have to go spend billions to buy heler to get me back but uh from there I uh I joined um Marsha mcclinon companies for a couple years and basically did uh credit enhancements using Insurance capital and then of course 911 hit and uh Marsh was decimated it was after caner Fitzgerald that was the second largest casualties got unfortunately and uh whole thing about you know my my first kid was born 11 days before that and my wife didn't want me to travel and actually I I lost some friends in the in the first Tower where when it got hit but um that was also a big changer for me and I know a lot of other people in that you know sometimes these big life moments make you reassess things and in my world I said well I want to get back into small business lending but I want to do it my way I want to be the one who makes those decisions I don't want some arbitrary you know credit decision to come down down on me which is what had happened at at GE Capital and at heler in the past so uh so I launched my own company and that was in O2 uh which was called merkantil commercial capital and uh we were very successful did uh we were the first small business lender that was focused exclusively on SBA 504 loans which does a lot of commercial real estate and heavy equipment and uh ultimately we ended up selling that company to a local Bank in 2010 but we had been on the Inc 500 list of fastest growing companies three years in a row and done a whole bunch of things and so I stuck around at a bank and I wasn't really excited to be at a bank necessarily I had I hadn't grown up in that world in a bank I'd always been a non-bank lender and uh I stuck around for about three and a half years and um they kind of thwarted some of my growth plans and and didn't do some of the things they probably should have but uh at the end I made a play to buy my baby back from them and what I didn't know at the time was they were trying to sell the bank to a bigger bank and they wanted to keep the parts all together as opposed to or something off I even had financing lined up to to do it and uh ended up wasting about 60 days of my life going through that process and I ultimately just uh left and uh started my last company which was Fountain Head commercial capital and uh I actually got it started six months after that a few days before they actually consummated their sale to the bigger bank which at some level that was gratifying to me that I got it done before they did so that was in 2010 no no no that was now now we're talking 2015 that was 2015 okay so uh and then Fountain Head again we've been on the Inc 500 list four years in a row lots of tremendous growth um got into other SBA loan programs such as the 7A which does a lot of business acquisition financing in addition to some other you know working capital and all sorts of different things and uh we were one of the small business lending companies SPC so we were one of 14 non-bank lenders who had that exclusive license it took about 18 months for us to get approved and uh we got approved 3 days before Christmas in uh 2018 and then the government promptly shut down so so we didn't actually announce things until the end of February of 2019 and so as and as you know where I'm going with this so February 2019 we're on this great trajectory we've got the new loan app uh Loan program that we're that we've launched everything's kicking butt and um I'm about to get rid of my my partners at the time which was a hedge funer and asset manager they were sort of you know ready to move on they were a stepping stone for me to kind of get to the next next phase of the business and we did a whole dog and pony show with investment bankers we're about to sign with our with our one that we selected in early March of 2020 and then the whole world changed remember and then and I met you shortly after that I remember you with the PPP and all that sort of stuff yeah that was a crazy crazy time so on the runup to the co era you guys at Fountain Head it was it all government back loans was it all uh no not not all no we we did some uh low loan to value conventional real estate loans yeah yeah but I would say 85% of what we did was either SBA 504 or SBA 7A okay yeah and let's talk about what is the 7A sure sure so 7A uh loans go up to $5 million at the moment although there's legislation in Congress right now to take it up to 10 million which would be nice and it's long overdue they haven't they haven't indexed the uh the cap seems like been that at that for a long time it's been there since 2012 actually was the last time it moved up and so it's it's overdue but uh but you can use 7A proceeds for just about anything related to business um we do about 60% of our volume is business Acquisitions so one small business buying another we do a lot of working Capital Loans through that program we also do commercial real estate owner occupied commercial real estate equipment um partner buyouts we do a lot of partner buyouts with that program leasehold improvements uh grup construction on real estate all sorts of different things it's the most versatile of the SBA products and what's the benefit of a SBA loan is it that the lender or the borrower couldn't otherwise get financing well from a regulatory standpoint they have to they have to the lender has to prove that that is the case and often times what that means is the lender is actually signing off on on the loan saying we would not otherwise make this loan under the same terms and conditions that sbaa can provide and so a real good example that Paul is on owner occupied commercial real estate most banks will finance things at 75 to 80% loan to value if they wouldn't do that for that client for whatever reason maybe they don't have enough net worth in the business or personally maybe their bank is just not comfortable doing anything more than 80% loan to value that enables them to say we only will do this under an SBA program so that's that's an example of that yeah and SBA doesn't provide the funds or a guarantor is that right that's right that's think of it like an insurance product okay yeah so what is a typical when you think about like a you know a partnership biot or business acquisition 7A loan what are typical terms in today's environment for well it depends anything nonre estate backed um you're going to typically do a 10-year term okay no balloon payment it's fully advertising the 10 years most of those products are done at 90% financing not all there's a few situations that you could do higher than that but mostly it's 90% financing and by comparison to Conventional ordinary conventional Banks uh financing it you're looking at you know 70 80% at best sometimes even lower depending on the use of proceeds Yeah so basically somebody's coming up with 10% of the equity of the total transaction value whatever it is y the bank comes in with 90% yeah that's the biggest one I mean it's it's I would say it's it's really it's much lower down payment which is very valuable for most small businesses because they can preserve more of their precious Capital uh usually it's a half to a third of what you know the alternative is they're getting a longer term you know business Acquisitions for instance if you're able to get one done with a conventional bank for a small business which isn't very often yeah you might get it on a three or fiveyear term not a 10-year term banks are not going to do that conventionally um same with partner buyouts you might get a three or fiveyear term versus a 10-e so you have a much longer repay payment which means it doesn't impact you know your monthly cash flow as much so those are two big things the the third thing I would say is we don't SBA doesn't have a bunch of strings attached to their loans so long as you make your loan payments you're generally going to be in good good Steed with SBA um there's no restrictive loan covenants which again people kind of chuckle when I mention that in good times that doesn't matter the problem is in bad Economic Times it does matter you know a bank quickly can sour on a particular you know industry type put you in technical default overnight technical defaults happen all the time yeah and it's and it's can be dangerous you don't have those issues with SBA so are there any specific borrower profiles that make sense for an SBA loan versus those that don't I mean what sort of criteria are banks looking at for that yeah I would say um you know smaller companies obviously um you know if you're looking at an SBA loan for a business acquisition then you're not going to probably Finance a company that does an excess of say 100 million in gross revenue you know it's going to be lower than that maybe a lot lower than that um you know same with partner buyouts I mean they tend to be more on what what I would consider the small to midsize companies I think like Wall Street would consider the micro businesses of course but we do everything from startups all the way up to the 100 million in gross revenue so it's it's kind of everything in between I mean I would say our typical customer is probably in that5 to20 million gross revenue range mhm yeah what do the banks do you know in order to determine you know when you a borrower comes to you and says hey um I'm buying a business I need 4 million bucks do you guys get involved in saying okay is this an appropriate transaction value you're paying do you guys solicit thirdparty appraisals how does that work yeah we always have thirdparty appraisals on business Acquisitions and frankly for equipment and real estate as well okay so yeah I mean we generally know where should be and obviously when we get the valuations back we take a look at them and try and determine you know are these are these reasonable comps are these do these multiples make sense you know when they aggregated all the different ways to look at it does it make sense or not and we've we've been known to push back to the business valuation firm but yeah we have to have those not just for our comfort but also for spba it's a regulatory requirement it is and when you guys are underwriting these things from a crit credit parameters perspective are you looking at like fixed charge coverage what sort of things are you actually looking at when you model this out we're we're mostly looking at the cash available that's thrown off by the the business being acquired so we're going to look at their eida basically predominant these are largely cash flow loans yeah yeah yeah I mean it's rare that you're going to have a business acquisition that that doesn't cash flow or unless there's a very well documented business plan with really detailed assumptions that make sense to pass the smell test to tell us how you're going to turn it around but in most cases uh an acquirer who we Finance is buying an existing cash flowing business so we're going to take a look at you know the strength of the business itself and generally from a debt service coverage standpoint um we're only looking the the sba's minimum which is a 115 1.15 times coverage on either the historical numbers or on a projected basis going forward and that's I would say that means our credit box is much broader than ordinary conventional lenders like Banks um so we're going to look at that but we're also going to look at the personal financials of the of the acquir of the the business owner and make sure that you know they're not this isn't going to stretch them too much you know we want to make sure they have enough liquid net worth to cover uh you know the operations if you know if if they get in a pinch um you know we want to make sure that they've been a responsible borrower in the past so we you know we'll pull personal credit and not just look at the FICO score but actually look at the credit report itself and make sure they haven't you know recently charged off something or been laid on their mortgage payment or things like that so it's it's a little bit of um it's a little art not just science yeah you know and that's and so we're looking at things from a Global Perspective and we do a global debt service coverage ratio which we typically want it to be at least one to one times you know what about collateral and personal guarantees how does that work so all SBA Loans have a personal guarantee and I know plenty of borrowers have squawked about that in the past um from my standpoint having been a non-bank commercial lender where I've historically relied on large Commercial Warehouse lines of credit which I have to personally guarantee I have I have very little sympathy as you can imagine cuz I've had hundreds of millions of dollars that I personally guaranteed which by the way I don't have so but I could sleep at night because I know I you know I have a enough confidence in myself and what we're doing that it's it's all worked out fine but yeah so all SBA Loans have collateral it's a requirement um but we operate a little bit differently than most SBA lenders and certainly conventional lenders in that we follow the sba's sop which means you can't turn a loan down for insufficient collateral and frankly if you think about it that's why the government guarantee is in place because sufficient Cloud hole doesn't exist otherwise in most cases yeah I mean otherwise they might be able to get traditional financing not always especially if we're talking business Acquisitions but um yeah we you know SBA government guarantee is typically 75% of the loan amount so I look at that and go well that's that's in essence since my collateral coverage right there but we do have to attach to other things that are available to us and so you know sometimes we take borrows personal residences you know a second or third position on that we often will file ucc's on equipment and inventory and things of that nature but again we may not be fully collateralized on that loan and that's okay we still want to follow the spirit of sba's rules which is to still make that loan and not reject it just because you have insufficient collateral coverage how do you deal with guys that have you know they're based in the United States they're buying a business in the US but they've got a couple homes abroad me it's hard to foreclose on those I wouldn't even touch them yeah yeah and and we sometimes have situations where someone has particularly see SBA what was it about six or nine months ago got rid of what was called the personal resources test which meant you could get an SBA loan if you qualified all else being equal except for the fact that you couldn't be too liquid in other words you couldn't be a strong too strong of a borrower meaning if you so if you have $50 million in a passport savings account and you want to borrow 4 million bucks they're going to say sorry historically SBA would say sorry okay they got away with this Rule and what it was to be very precise it was if you had um liquid net worth that was unencumbered non-retirement that was larger than the project that you wanted to finance the SBA presumed that you should just pay cash for it which you and I know that's that's silly why even if you have cash why would that's that's one of the benefits of having cash is you don't have to put it all in you're an attractive borrower right so um so they finally got rid of that last fall and what it means is I think it's smart because and I've been lobbying for this for years with them you want to bring in more successful more financially secure borrowers into the program it actually will enhance sba's guarantee portfolio by having these people so no longer do we have these situations where you know a doctor wants to buy an office condo a medical condo and he's got a couple hundred, more in unencumbered non-retirement liquid net worth and I have to tell him go buy a boat or something in order for us to do the deal you know and I've had a few of those conversations over the years so we don't have that situation anymore and I think consequently we're looking at much much stronger borrowers than SBA has ever looked at in the past now you've talked about you've lobbied this for this for years and I remember a couple years ago you know were having lunch and you were talking about I think you had just recently been in front of one of the Senate committees yeah yeah so what have you done with regard to the the regulatory framework here in the US I've done a lot over the years I've been doing this for you know since 1998 so um I've testified before Congress before uh in front of the US uh small business committee committee and Entrepreneurship for the Senate uh I've submitted testimony multiple times to both the house committee and the Senate senate committee um I've lobbied the trade associations you know funny SBA 504 never used to be able to allow for refinancing commercial real estate I was the first guy that was pushing for that um right now as I mentioned earlier there's a there's legislation that would bump the SBA 7A Max from 5 to 10 million that's something I've been pushing for a couple years now um during PPP I mean we were the sixth most active PPP lender in the country and I was at the very beginning dealing with who at the time was my senator in Florida Marco Rubio who was the chairman of the Senate small business committee and uh starting I think it was March 9th when President Trump came on from the Oval Office talking about covid and he said that SBA he's going to have SBA offer $50 billion to saving America's small businesses and I happen to be on the phone with someone who's I consider the the sba's media Authority um and he's a good personal friend of mine we were on the phone my wife kind of comes out on my Leni and she says I think you want to get off the phone with Bob and come in here and listen to the president's speech I've already paused it so you'll be able to watch it from the front front so I stay on the phone with him I come back in and we're watching it together his wife had done the same thing and we're watching it literally you know second by second and we get to this part where the president mentions SBA I don't think the the president of the United States has ever mentioned SBA in an oval office which that alone was shocking to me yeah but then he says 50 billion and both my friend and I were like did he say million or billion and I rewound and we played it again turn it up no it was billion well the irony here is two three weeks later that 50 billion turned into 254 billion and that was just the first round of PPP eventually PPP got up to 796 billion I believe is the number so it was a massive it was it was the largest you know governmental U program dedicated exclusively to what I think is the backbone of America which is small businesses nobody even got anything close to that I mean to put things in perspective Paul the average SBA budget annual lately has approached about 30 billion okay so this is you know 20 25 times what sba's ever done in its best year is what they push through so bottom line is I was talking with Senator Rubio um at that time because I I knew his staff very well and i' you know I'd go up to Washington Lobby for a lot of different reforms over the years and we start talking about this about this program which came out of a think tank and we start discussing it and we were on many many calls from that point forward talking about you know what is it going to look like and there was a lot of suggestions made by myself and my CFO and my coo at the time that they listened to a lot of they didn't and the biggest one that they didn't frankly is that they didn't listen to what is a fundamental tenant of ba lending which is and and at this point all commercial lending which is to get tax transcripts on the tax returns that you're given whether it's business tax returns or personal tax returns and I was pretty adamant how can we how can we make an SBA loan without having tax transcripts to validate the financials that are submitted to us Y and I remember distinctly I don't remember if it was it was Senator Rubio or some one of his one of his uh legislative directors who said look we're just trying to get the money out the door as quick as we can we'll clean that stuff up later and I said well you're going to have 10 or 15% fraud yeah if we don't do this and they said we we'll deal with that later and I was pretty prophetic in that that's what we dealt with now it hasn't been as bad in PPP as the program that SBA administered directly which is the eidl that's when you know if there's a tornado in rural Kansas FEMA comes in but so does SBA SBA is actually writing checks to those folks well this is the most eidl had ever done and it was administered directly from SBA employees and their contractors and if you read the headlines the fraud in that is is a lot worse than in PBP so it was a it was a crazy time for sure so you folks were the sixth largest sixth most active yeah we did just under five billion and we did close to 300,000 PPP loans yeah during the he of that how many of those were you doing per day uh I can't remember units but I will tell you that in 2021 we had to keep bumping up our lender ability to to actually AC or wire funds and we went from a daily a limit or wire limit of 25 million we got it up to 175 million a day so there was probably nine or 10 days there where we we were pushing out $175 million a day which is extraordinarily nerve-wracking by the way the SBA is not writing these checks where are you getting this money to lend so that was another aspect that I did which is um which is we actually leaned on the Federal Reserve and the Federal Reserve created what they called the paycheck Protection Program liquidity facility the pppf and um it was part of the regulation that came out that they were going to do this the problem is they enabled it for depository lenders meaning banks credit unions and they mentioned that they would do it for non- depositories but they hadn't done it right out of the gate because if you think about it they were they were producing money out of effectively thin air correct it doesn't matter how big you are you didn't have enough cash on your balance sheet to be able to push these loans out even just basic lenders needed this facility to help them well the problem is you know there's a guy like me and a bunch of other folks out there who are non-bank lenders who are approved by SBA to make loans and this is an SBA program and we don't have enough liquidity to make these loans and you can't tap into the fed well we couldn't at the time and I started lobbying the FED left and right and I it was it was pretty ridiculous I almost had like a mind map of okay I've talked to the FED in Atlanta I knew somebody who's in Pensacola you know one of the branches I got somebody in Jacksonville you know it's I had this ridiculous mind map and I'm calling these people daily in addition to me in the trenches processing these loans and keeping my staff focused and worried that we're all going to get the the covid and die all these types of things are going on but eventually it was it was interesting I was my my only my only downtime during that period I was working about 20 hours a day like no s days a week for months at a time but my only Solace every you look way healthier now by the way you did that remember like back in those days I lost like 40 lbs in April of 2020 it was crazy my wife and my chief of staff were like making sure like feeding me like sliding you know the metaphorical tray under the door to make sure I ate um but what I would do every day just to keep my energy up is I had a had a sauna on my Leni and I would go in my sauna and I'd just try to keep up on something read or whatever and ironically this is I'm going to geek out on you for a second I actually had an ABA an American Bankers Association white paper that I somehow I found and I was flipping through it in the sauna one morning and uh and this is by the way I would sauna like 6:00 in the morning and then hustled to the office later we would work from home but uh there was a section describing the emergency powers of the Federal Reserve and one of the things that they said in there and I'm not going to quote it directly but it was basically in you know an economic crisis the FED could utilize its emergency powers to offer funding even to non depository institutions like what we were and this had previously only been contemplated like if there was a huge crop shortage or something and there was a you know a a Farmers Bank or something that couldn't do it but they'd never lent to a non- depository before and I seized on those like two or three sentences and immediately went to town and I was I was dealing with folks on Capitol Hill I was dealing folks within SBA because SBA had a vested interest to make sure that these these loans got out there and helped save America's small businesses so they were pushing and there was a guy at SBA who would have meetings daily most of April and into early May with his counterparties at the Federal Reserve I was calling on them we're you know we're coming at all angles on this eventually the chairman of the Federal Reserve announces that okay now they're ready to roll it out and we had already prepped all the paperwork ahead of time because it's a big process to go through this and I I was it was very gratifying to be the very first non-depository to actually have our paperwork in and to make the first PPP loan or any loan for that matter from a non-depository borrowing from the Federal Reserve and we actually fresh cash conjured on thin air right to your doorstep exactly and and we had to sort of teach the Federal Reserve what this means and how to administer this and it was mostly my CFO and I at the time and it was it was a little crazy we were dealing with the Minneapolis District feds for some odd reason but um but yeah we a lot of our best practices that we were teaching them they then would utilize for other non- depositories at the time and it was uh but yeah I mean like you said we literally created money out of th a and uh but I'm glad we did because I mean there is yeah there's there's been fraud and there's you know a bunch of people that should have never gotten the funds um they were able to dupe lenders I think lenders in general did the best they could nobody came out and taught us exactly you know nobody from the FBI said okay you're getting ready to make these PPP loans here's all the things that you need to look for we literally created we had a working document it was very fluid that we were constantly adding like things that we would notice that um that were clearly fraudin attempts and that got that document within our staff got up to like 15 or 18 items yeah by the end of it and it was you know we were doing things to uncover illegality that nobody ever taught us to you know we're Bankers for God's sake I remember when we had lunch a couple years ago when we were talking about this you were saying something in fact I'm going to probably butcher this but like wasn't there like example tax returns online and like people were just like downloading it and actually using that as their tax returns yeah and I I heard about it I finally saw a couple instances that like we're in the middle of this thing and it's literally the hurricane we're in the middle of trying to as many people as we could we didn't even know how we were going to get paid by the way at this time which isic um but I just kept telling my staff let's just let's just focus on doing the right thing let's let's help as many people as we can we'll worry about how we're going to get compensated later and ironically that became an issue with my partners and I like we just were trying out of good faith to help as many people as we could but yeah you're right I mean there was stuff apparently on the dark web how to fill out the fors you know literally there were sample there were templated you know um tax returns 940s 941s dummy numbers dummy numbers and and it was interesting when I would spot check these things um you know just for quality assurance purposes I I got very good at noticing okay this is another somebody who used the template because it's the same you know marketing expense every year it was the same whatever same dollar amount rounded numbers you know all these types of things and and you you could just see this pattern and then you start rejecting that stuff but yeah I mean it's just um it's it's uh it's funny I was the New York Times uh did a piece on me where I said something like you know I've lost a little faith in humanity and it and it's true when you when you're dealing with this and you're you're shouldering because I'm I'm a bit of a empathetic person I'm shouldering this pain and suffering that a lot of these people were dealing with at this time and then you have these folks that are just trying to screw the system it was it was really depressing to watch and it really does make you question like you know I know there's bad people in the world and I taught my kids this but it's really sad to see it you know because those folks were literally robbing funds from others who were deserving of it and they're fortunately I think in general PPP helped I think over 7 million small businesses but there were still probably hundreds of thousands that didn't get funds and the funds just frankly ran out and too many people were buying you know $30,000 watches and Lamborghinis and all the other crap that they were doing and it's it's just uh it is a little disconcerting to see that it just it was just frustrating so um but it was a crazy time man you know we my staff and I had death threats and uh we had to ref death threats because I'm not getting my loan not getting either we rejected them okay because of fraud reasons the suspected fraud reasons I should say or um you know we couldn't get the funds done fast enough I mean you know to this day secretary um treasury secretary manin was in one of his famous press conferences in March of 2020 said uh you know PPP we're getting it past and that that was the largest piece of legislation in America's history at the time they got passed in like something like 12 days was ridiculous so they didn't even know classically Congress doesn't even know what's in the law that they're passing and it's up to the regulatory bodies to fix it but he can't but he came on camera and he said you know you can go into your bank in the morning and walk out with your check that afternoon and I'm like oh my God that was ridiculous and then the SBA administrator also had like this ticking clock how much funds were remaining yeah which all that did was create a tremendous amount of yeah Crush panic I mean my God people were panicked and so yeah so we had we had all sorts of threats that we got because we didn't get the funds out the door fast enough or if someone is a bad person and we turned them away and and I literally I remember having to tell my staff at one point look if they start cussing you out on the phone there's a very high probability that that's a fraudster that you caught and you should just get off the phone as quick as possible and move on to the next legitimate business owner by the same token if someone is crying on the phone that's probably someone who is really suffering who needs these funds to make payroll or to put food on the table and you should do everything you can to try and help those folks so we we had it ran the gamut I mean we had um we had a guy who stalked one of my employees and by this point we were well into dealing with frauders on this program and and we literally called one of our special agent buddies who we got to know and and put him on the case and and I think saved my young employee because this guy was coming to her house had her cell phone found out where she lived and was coming to visit and I don't know what would have happened and and the funny thing about that is you know I'm just a regular guy like you but so the first time the FBI calls you is you know it's like when you're on the highway driving and you're like five miles over the speed limit and you see the lights behind you and fortunately the lights past you like okay it wasn't me it's the same thing you like get that that emotion that adrenaline when the FBA calls you the first time but by like the 15th time you're like talking about the game last night and saying yeah did you see that last minute shot that was great and fortunately that's the kind of relationship we eventually developed with these folks and were able to I think save one of our employees from God knows what would have happened but it got to the point where like myself and two other of my staff at the time we were still coming to the office I mean we we brought our guns to the office cuz we just didn't know what was going to happen you know it was uh it was crazy and I I'd never seen anything like that fortunately I've never seen anything since I don't really want to go back my wife has threatened my life that she'll divorce me if uh if I do PPP number four at some point but the problem is you and I both know I mean the program is done it was overwhelmingly successful yes there's been some bad aspects to it but it was overwhelmingly successful to keep the American economy chugging along during a really rough time so it's on the Shelf it's going to be pulled off the shelf at some point again God forbid if we have some situation like this and maybe I'll be long retired by that point I don't know well so since plowing through this covid era you know a few weeks ago at Rob's birthday we were chatting and now I understand did you buy a bank is that he you right yeah so my my next go round so it's my uh my partners um we made them it turns out we did very well financially during PPP um but we remember I had said we were basically in the process of of moving them out of the way yes they had they had you know these guys have funds the funds have typically a five or or seven or 10 year time Horizon we were approaching the end of their time Horizon so they want it out they' made they made their return on us they want it out and unfortunately the pandemic happens and completely disrupted that and I had to sort of drag them Kicking and Screaming to do to allow us to do PPP they didn't want to it was too many unknowns you know the the big institutional guys they're generally speaking they're not operators they've never been operators they're not entrepreneurs they operate by spreadsheet and anything that's unknown or uncertain freaks them out and you know only half of the financial institutions in America Paul even made PPP loans there was like 11,000 at the time about 5,500 actually made loans so big chunk of people wouldn't touch it because there's just too many too too much uncertainty right so I had to drag them Kicking and Screaming turns out it was probably the best thing that they ever did that we ever did and uh yeah they just they wanted out at the end of it they want it out you know it took an extra two years now they definitely want it out even if and and they didn't want to double down and it's it's a shame because it was not a situation I wanted you know I had a great team we literally went through the war together and it just brought us that much closer and these people you know they would run through a burning wall for me at this point and I'd do the same for them um so it's really frustrating that they just said you know we're out and without an alternative we had to wind down the company and that's that's what we were doing and so but you know like the Phoenix out of out of the ashes something else Rises and in this case um a a long time buddy of mine I'd known him for over 15 years he was the largest originator and serer in another government guaranteed program uh which ironically is done by the USDA the United States Department of Agriculture which sounds weird but it's it's rule lending and underserved lending and uh he was the largest originating and servicing USDA BNI lender and then USDA has a bunch of other ancillary programs like that and he basically approached me he knew what had happened and he's you know it was it was a tragedy and he basically said look we've tried to do SBA but we're not very good at it and you guys are the are one of the best if not the best how would you like to come over here and I said okay sounds good to me and so um I've made it he by the way he owns a bank MH um the bank is not like a typical Bank meaning the bank is a funding conduit for us to actually fund our government guaranteed levs where we have a fairly high margin because we turn around and sell off the guarantees and the secondary Market we still service our loans so you know we still have skin in the game and we also retain the Ungar portions on these loans whether it's USDA or SBA but uh so yeah I'm the second largest shareholder in the bank he's uh he's the the bank holding company chair and CEO I'm the president of the of the bank holding company and I'm the president of the SBA Division and and we successfully managed to move about 95% of our employees over and kept the band together as they say and and they love it and we're you know we're hard charging going forward we we think we can do a lot of really interesting stuff help a lot of business owners with the the the the model that we've created here so you'll do the full spectrum in addition to the U uh the Department of Agriculture stuff you'll also do the SBA the 504 and the yeah SBA 7A all the different USDA programs we're uh we're working on getting a cdfi license which is another interesting program that allow us to do some other esoteric uh Lending we're uh we're looking we're doing Pace loans which is another interesting program for commercial real estate um just a whole host of things we'll we're going to probably contemplate uh doing a an what's called an sbic a small business Investment Company um which will enable us to do um you know pref Equity Mezzanine Financing things like that so there's there's a whole host if if you go down this Rabbit Hole of specialty government lending there's a whole host of stuff in there uh that frankly most traditional Bankers kind of look down their noses at us and they don't have an idea of what what exists and they certainly don't have the expertise to do these things but it's um it's pretty interesting and it's it's my passion I love financing entrepreneurs I've been an entrepreneur for a long time I came from a a family of entrepreneurs so it's it's just something that I really enjoy well speaking about being an entrepreneur in addition to banking over your career you're involved in a variety of other stuff yeah so I want to talk about that sure sure sure next week you're getting back on a plane I am over to the UK couple days from now yeah okay what's on tap over there in the UK um I I'm a former soccer player or football as they call it and uh always dreamed of owning a soccer team and actually uh last fall I invested in an English team that is on the cusp of going up to the Premiership it's called ipswitch toown which was a very successful team in the 70s and 80s and kind of fell on bad times and uh couple buddies invested in it um got a pretty good value when they invested and and it got promoted last year there's there's this notion of promotional relegation in most International Football we don't have it here in the states yet but uh yeah they got promoted from the third tier to the second tier and uh now they're currently in second place they have two games left to play they got to get four points three points for a win one for a draw zero for a a loss and if they get four points out of the last two games they'll go up into the Premier League which is roughly about 400 million to the team it's a big big deal so I'm just if you're a watcher of uh you know Ryan Reynolds and and Deadpool and and Rob McAn and what they've done with rexam they're a couple levels down from us I'm ahead of those guys a little bit in this regard but so you guys have a lot riding on these next two games we do have a lot which is why I'm going and it's going to be a very consequential game it's the final home game of the season fortunately it's against a team that's much lower down in the table but yeah if we win that that's man that is Lights Out it's going to be amazing and then I also invested in um a team here in the states which is in the USL Championship which is the second tier in the United States below um Major League Soccer that's a team in Rhode Island I don't have any affiliation to Rhode Island other than I think it's a beautiful place and but the um the pcket Red Sox AAA team for the Boston Red Sox moved out of pcket several years ago and they've had this huge you know vacancy in the market and uh so we worked with the same pension fund that we we had at epwi toown uh to start a brand new soccer team there called Ro Rhode Island FC and uh we worked with the state of Rhode Island and the city the municipality and the the county and we're building $110 million soccer specific Stadium right on the river front and uh my my great addition to all this is I told them you know Rhode Island has this Maritime tradition in fact if you looked at our badge it even has an anchor and everything in it and I said you know you have an opportunity to do something that's only been done two other places that I'm aware of which is University of Tennessee and Baylor University which is where my daughter goes I said we can create a sailgating experience and they said what do you mean said sailgating all these people in Rhode Island own boats as opposed to tailgating sailgating as opposed to tailgating take your boat up the river dock it tailgate sailgate and then go watch the game and so uh we're very excited for that that the stadium doesn't open until um probably June of 2025 so they're playing offside at a local college at the moment but yeah it's a it's a it's a very interesting experience other than the New England Patriots and the Red Sox and the New England Revolution there's no other professional teams up that way other than Rhode Island FC so it's pretty exciting well you I mean you love the sport are these good investment opportunities I mean we talked to some of our friends here who theyve done that basketball Puerto Rican basketball it doesn't sound like a great deal it's uh well are you in that as well no no no no I'm not I do like basketball too but I don't know about Puerto Rican basketball if that's that has quite the uh opportunities uh that some of these others um well I will tell you it's it's uh I've gotten to the point where if I make an investment I want to have some fun with it you know I've got plenty of Investments that are cash flowing and that's great and you know hopefully you know increasing my net worth but I also want to have some Investments that are fun yeah and this is this is you know other than work MH this is my only hobby I mean I don't have anything else other than I used to play and I watch soccer so this is it this is it um and on the English Championship side soon to be Premier League hopefully um that is that's the big leagues I mean that's about as big as it gets so uh the road Island thing is yeah it's a decidedly you know downscale by comparison but um yeah I think when you invest in something like that you definitely these are not going to be cash flowing Investments like you know they're giving me a check every year or something like that I'm not expecting that um obviously you're investing in something that you hope appreciates and value over time and maybe somebody comes in and offers us a bunch of cash to take it over you know it's also a long-term thing so yeah like I said I got I got plenty of other Investments that are more traditional in a sense this is this is kind of uh exciting and fun and and it's great to be a part of something and in in the case of ipswitch toown much like rexam y I mean it is the pillar of the community you know the town lives and dies by by that team and what it does and it's uh it's it's pretty um it's pretty magical to be a part of something like that really and uh and we don't have opportunities like that very often so I'm not sure that Puerto Rican basketball Rises to that level no it does not of of excitement in the community perhaps but you're making me think of that as you're talking about this I'm thinking about sedus and what's that tasa yeah I'm thinking about with you going over there like I'll tell you watching episodes the first season Ted lasso that was about the only time I had during PPP I mean it was yeah it was it was pretty special and I actually knew that the show was being developed and and coming out and I would tell my wife who's not quite as passionate about soccer I am by any means um I think you're gonna like this show I'm excited to watch this show and she refused to watch it for a while and then finally I convinced her and she watched a couple episodes she's like okay now I get it I actually think it's a pretty good show it's a great show it really is comedically but also just um you know if you're a passionate soccer guy to be able to bring that to others is is pretty exciting too well in addition to soccer I mean you're also in other sports related type Ventures so I want to talk about your latest sure I to do like the commercial like let me see this yeah it's not it's not the most attractive label this the final label this is what you guys that's actually it so it says barcode bar so let's talk about this barcode is a fitness water and uh it's not it's basically competes against um Gatorade I suppose you know Vitamin Water uh Prime some of these things but unlike all that stuff it doesn't have it doesn't have sugar it doesn't have artificial sweeteners it uses U monk fruit um it's the first Fitness water that has like ashwaganda and vitamin D and magnesium and other things and it's it's predominantly coconut water and um the only reason I invested in it is again I have some friends that did it I think it's got some tremendous upside in terms of nobody's quite positioned an alternative product for that Marketplace um it's healthy it's basically Healthy Fitness water and we're fortunate that one of the investors and actually the spokesperson is um is Webby I always mispronounce his name but the soon Tobe NBA Rookie of the Year this is one of only four products that he's endorsed and you know one is Louis Vuitton I can't remember the other two I think One's Nike um but yeah so this is a this is a big deal it's already the official U beverage of the Brooklyn Nets the Miami Heat I'm pretty sure the the San Antonio Spurs here pretty soon you know Webb's about to go and play for the French national team and the Olympics this summer and uh I have a feeling that you know barcode is going to continue to to climb uh you know in this business it's all about getting retail placement um and sponsorships obviously and uh yeah we're we're in virtually all the grocery stores in Texas um we're we're in Costco on a trial basis right now if that expands I mean that's you know again lights out on something like this but it's it's good to be a part of something that's helpful to people and uh we'll see when did this launch this launched nine months ago maybe okay yeah so there we've got um five flavors I think about to be we're going to have one just like 50 Cent had his Vitamin Water flavor yeah Webb's about to have his barcode flavor so in addition to being an investor in this I mean are you actively involved in strategy here at all not so much this this a little outside my of expertise I mean I'm a I'm a pretty good marketer I mean people in the SBA World know me is is probably the best in in the space um no I if they ask sure I'll give them some feedback but I know how much how helpful I can be in that regard on the soccer side however I've been I've been very active in terms of offering my feedback just kind of a as a fresh set of eyes you know I'm not I'm not trying to become one of these guys in England who this is you know they live and breathe it from a management leadership standpoint administrative standpoint I'm not going to ever become that I don't think but I can also notice things comparing what we do here in America or either other places internationally to what they're doing there what other opportunities they could pursue you know sometimes it's as simple as dig into the rules and regulations and see what hasn't been covered so that you can sort of push the envelope a little bit and think of something that maybe The Regulators hadn't thought of they may close the quote unquote loophole eventually but in the meantime there may be some opportunities for you uh to so-called exploit things that help grow the brand help grow the Enterprise more so yeah i' I've getting I've given a lot of feedback in that regard we'll we'll see what happens you must spend a lot of time in the UK because when I showed you that Andy ran some video this morning like you just took a look at the bar for a second you're like all over the land yeah so do you spend a lot of time there uh since investing in IP switch yeah I've been about monthly actually yeah yeah the lord of the land the guy Richie and David by the way I mean you said something that I think was struck me about that place like the food is outstanding it's I would say it's one of the top gastro pubs in England in in London for sure we went we had a brunch there like on a Sunday morning run like we were filming later in the week and they were like hey come on in like you guys got to check this out and taste our food you got to get a feel for it yeah we'll do that awesome not your traditional English food by any no much much better um it surprised me actually I did not see David and guy however I don't know if you have but we didn't see him maybe some other time yeah yeah but we did enjoy we enjoyed the food and the people there were awesome the just it all around great experience so anyone that goes to London should check it out absolutely with regard to these Ventures I know you've done a lot of stuff with YPO folks over the years and so that's been an important part of your life and I want to talk to you about that when did you join YPO I joined YPO in either 07 or 08 so it's been about 15 years and what have you gotten out of it well um I've had a lot of business relationships out of it you know um I think as as men you know we as we get age we don't have as many close relationships perhaps and so it's it's good to have similarities with others that you can relate with and um so I've gotten a lot of friends out of YPO over the years I've done business Investments with other YPO I financed a lot of YPO and in just my core business I've probably financed close to a 100 YPO um and then if you throw in pppp I financed like 900 yps which which uh some of them really pissed my staff off after a while because there was some guys I'm in YP like that's exactly what what happened they would call to the point where I had to like remove my mobile phone from the YPO you know the internet that we have because I was getting calls during that time basically literally there were several people who would say Hey you know move me to the front of the line and I'm like I I can't do that I I can't move you know appreciate that you're YPO appreciate that you used your resources to get a hold of me and I actually answered your call but I can't do that that's not fair oh we're in wipo together I'm sorry this the way it works I mean I will personally shepher your loan through and get it done for you but I cannot let you jump the line that's that's not fair to anyone so that piss you weren running a nightclub over there yeah no it's a little bit different in a time of Crisis like that so yeah so those are some things I mean I've been in YPO masterminds or not masterminds but forums is what we call them um yeah I've had some I have some really close personal relationships that have that have come out of that my uh my wife's been in a spouse Forum or we're the last couple years we're actually now in CEO which some people don't even know about which is kind of the next level Beyond YPO and we're in a spouse Forum together which means my wife and I along with other couples are are in form together together interesting yeah and I've I've done some I've done a fair amount of traveling with YPO going to different events around around the globe so that's that's been fun um but yeah I think it's you know the reality is um I I come from a very small town in downstate Illinois outside of peia rural town of I think we had one stoplight when I was a kid now they're up to two um under 5,000 people and you know I left and I haven't really much been back but it's tough to find sort of a peer group and YPO provided that for me and and you know people that are going through the same types of things you're going through um you don't see that in a lot of places it's you know it's it's the old adage you know it's Lonely at the Top you know people don't understand what you're going through you know and if you if you tell your staff how well the business is doing then they all want more money they won't raises yeah and if you tell them how terrible the business is they look for new jobs exactly so how do you have these conversations um with people close to you and you can only have so many conversations with your significant other also cuz among other things you come home after a rough 12 13 hour day and they say so what happened today give me the blowby blow well if I give you the blowby blow then I've just relived the entire miserable experience which I don't want to do so you know you need you need some um you need some peers that you can that you can relate through to that are going through the same types of things that you're going through and so that's I that's where I think YPO really serves a great need and then obviously there's all the educational stuff that you that you get out of as well yeah yeah I was telling you earlier Chris I I remembered hearing your name on one of the Dan Kennedy sessions from like 15 or 20 years ago and I was like wait a second that Chris Hearn the chrisn I know right so you were there so you're obviously into direct response but part of you building businesses how did you get into that how I got into it was um you probably remember this in the 9s there was these like big Arena events I can't remember what it was called where they'd like bring in like storman Norman schwarzkoff who a speaker and they'd have um what's the guy's name um gosh if I say his name you would you would know him you know didn't didn't have like Tony Robbins level but close to that and Dan was one of them and Dan was at the very end which I I found out later he as asked for that and he came on classically and of course all this is scripted knowing Dan he did this to it to the letter he basically said it was at the end of the day everybody's leaving they've you know they've been motivated you know all this stuff Victor Hansen was one of the guys a bunch of these guys and you're getting out of your seat in the arena to leave and he's like just if you would he said something like if you would just sit down I know you want to go to the parking lot it's going to be crowded you don't you're not gonna just hear me out yep basic and he said a few things that like made it very relatable and you're like okay that's kind of bold all right let me sit back down down and hear what this guy has to say and he basically came from a place of you know you don't you're not running your business you're running your business you're not in the business of running your business you're in the business of marketing your business so that you get more business and what I mean by that is most people you talk to you know hi I'm a dentist no you really need to think change your mindset to you're in the marketing of your dental practice and that really resonated with me um and so I at the end of course it was one of these pitches to buy his product and it was cassette tapes back in the day and everything and it was terribly produced I mean the worst it was the worst and it was like a $300 for this they have some like crooked print outs with it like photocopied 70 times if you know Dan he was never about like things being slick and and any anything like that he just kind of threw it together but it was like $300 to buy this and this is back in the mid 90s and that was a lot of money for me at the time and but I went ahead and did it and my wife was not happy later but then I then that sat in my closet classically which is a lot of people do this I think it has to it's got a season for it's got a marinate that's right and eventually I blew off the dust and I listen to this stuff and I'm like this is genius and between that and I think it was Jay Abraham oh yeah like that revolutionized my thinking about what I did uh whether it was as a Management Consultant you know working for for marshan mcclinon or when I had my own companies whether it's Merkel Fountain Head or now Community Bank shares and um you know it just I was I never once took a marketing course I've got two Bachelor degrees I've got a a master's degree from from Wharton um never once took a m marketing class but I'm smart enough to try to become self-taught about things and Dan was a sort of a Cornerstone of that for me and I learned about direct response marketing my first business that I had in in the finance industry uh which was mertile that was we were the first ones to have an actual website that was direct response that wasn't just brochureware is what I called it back in the day I was also the first one to ever have a uh a video blog not just a Blog but actually a video blog on camera um I was the first one to have an SBA podcast and and IR it's and it's called small uh what is it called SBA loan experts sounds super exciting yeah it was uh it was the top podcast in our industry until I stopped doing it about a year ago while we were sort of winding down Fountain Head and so I haven't gotten back to it but I hope to get back to it at some point but you know just all these different things you know we're when we go to a lot of conferences as a as a a company um I don't go to as much anymore because I if I go I want to be a speaker um and obviously I've been a speaker at a lot of stuff but like we have a whole strategy about how to go to a conference how to maximize what we get out of the conference whether it's pre-marketing uh pre-conference marketing post-conference marketing the deliverables that we get how you know how we push for extra deliverables that maybe aren't on the card you know all these different speaking opportunities so that we can be um what I call omnipresent you know you want to do all sorts of things you know everybody and I and I've and I've taught entrepreneurs this stuff over the years I've done some coaching for entrepreneurs and everybody wants that one silver bullet that one thing the reality is there's not one thing which which makes it difficult because everybody especially in the direct response World they want to say well you know I did this I ran this ad and I pushed him to this custom 800 number and look at our response yeah the problem is that's just one aspect to all this you've got to be kind of everywhere all at once and you and it's frustrating because if you're a if you're a data cruncher you don't really know what particular marketing thing tipped them over talk about this inar but you got to do you got to do all of this stuff and like some folks in my business and my company here in Puerto Rico will say well wait a second this is what's working because this is where we're actually getting the responses from but how did they actually get to that like it's like you said you got to be omn like you know I mean like we do weekly emails we take the email content and 80% of it's the same but that 20% we've customized it for a particular segment of our database yeah for instance I also write articles you know I've I've written for Forbes for years I do I do TV interviews and we repurpose that stuff so so if I write something for Forbes I also push it out on my blog we also might do a podcast about it you know if if I'm on Fox news or CNBC we'll also distribute it across multiple other of our channels we'll do social media we do all these different things we do a lot of SEO work you know uh organic search engine um we do a lot of paper click ads I mean we do and we do some complicated marketing things where we've got a specific target audience that we're able to get information from or send information to but we have multisteps I mean you and I were talking before we came on camera about you know sending the old FedEx package you know people initially their reaction is oh shoot that cost me you know 20 25 bucks to send it yeah but that's almost assuredly going to get in front of the decision maker another thousand that don't actually arrive exactly yeah you can do you can send out 10,000 pieces of mail and unfortunately a lot of people think if I just it's one and done right I send a I send a an envelope out to them they should respond to me or send an email they should respond to me what people don't realize is it's a sequence of things and it's the follow-up that makes the difference you know they you might only get a 1% response from that first touch but if you're consistent and you make it relevant to them you might get a 2% on the second touch you might get a 3% on the on the third touch you don't really know again what is the thing that tipped them over but you got to look at it like that you know I I think of and again I learned this from Dan you know marketing is about it's about relatability and numbers you know you want to try to be able to communicate to that to that Target in a way that they understand to make it interesting you know how do you stand out in the Clutter basically and then it's all about numbers in terms of how do you keep touching them how do you keep arriving in front of them how do you stay top of Mind Consciousness and it's it takes effort and it takes doing all these different things there it's not just one simple thing you know if I just do this one thing it solves everything it might for a little while but probably not going to continue forever you know well you ran one of the largest nonbank SBA lenders in the United States how did you I mean when you think about your marketing over the years I mean it was multifaceted you had the podcast right the SBA podcast you were always doing interviews you were doing videos were you doing Direct Mail oh yeah oh yeah yeah and doing what I call dimensional Direct Mail which what is that pretty again back to you want to stand out so first of all these days Direct Mail like nobody does direct mail right now's the time people should be doing Direct that's right you should be doing it now I mean I'm a big I'm a big believer in not following industry Norms conventions because if you don't if you are unconventional if you sort of do things opposite of what everybody else does in the industry you have a much higher probability of standing out y you know as opposed to like Banks Banks are terrible marketers for the most part and they all think oh you know XYZ bank has got a tombstone I need to do a tombstone well the problem with tombstones and we've all seen them advertisements is what just because you did a deal and you told me I I funded a $5 million deal and these are the terms and it's in this city like what okay so what does that mean yeah like but if you make get interesting to that audience member and you say well I made this loan and I can make it for you as well and they only put down this much money and I benefited them in this way I increased their monthly Cash Flow by X and I did you know if you make it more about them that makes them more attractive to you and that's what people want so I have violated industry norms for two decades and we'll continue to do so and again the reason do it is because you want to you the people that are different are the ones that actually get traction and are often successful when you do what everybody else does you know i' liken that to you get a reversion to the mean right that's what happens yeah and I don't want to be that way I don't want to be you know mediocre I don't want to be the average so you've got to do things that are you know non average non-traditional and and so to the marketing piece I mean dimensional Market marke that's about like having customized postcards you know that have the person's name on the postcard for instance in multiple places of the copy for instance or don't just send a little postcard send a large postcard or have you know I I did just thinking about this do you you remember the D Vinci Code that was this you know back in the early 2000s or mid 2000s that was like this hot book and everything well I I flew to London with my wife and then went to Paris and I took pictures different places that were in the book and I related that to what I called the 504 code and there was a whole multi-step sequence of me sending postcards back from Europe so to speak but that was part of the design about me traveling on the 504 code and what I could find and I mean just interesting things like that you know I've sent I've sent CDs DVDs out before I've done you know do you remember the the world's most interesting man remember the dois yeah so I did like a take on that years ago I was the the world's most interesting lender and we had this whole thing it's not a it's not a hard the bars pretty low for that one right yeah but I mean that's true but you know just different things like that that really help me stand out to the point where today everybody knows me in my industry and I don't have to do that kind of marketing anymore I mean because that takes effort right takes a lot of creative brain power to do some of this stuff I don't do as much of it anymore today because everybody knows me now I'm about to change that people don't realize is I've got a couple people coming down literally this afternoon from my team and we're going to start cranking up the marketing machine again um to do things that again are different than everybody else in the industry because everybody's caught up to me yeah you know and it always pisses me off when they're they're literally ripping me off that's what they do exactly exactly so but you know I've had my proteges do exactly what I used to do 10 years ago or whatever and they're having success with it today but I want to keep pushing the envelope and do things that nobody else is doing yet and that's where we're headed on some of this stuff but you can't you can't stand out and be maximally successful if you're just like everybody else yeah you have to do things differently you got to think differently and you got to do things differently and um you know it's it's kind of fun if you have that sort of Underdog mentality to do this makes it very exciting I'm super excited to see what it is that you're going to do now with this new Venture so I'm gonna stay me too to stay very close you know maybe 6 months from now we'll sit down again and track how your new marketing is going but sure you know for folks that might be interested in these sorts of loans how can folks re get in contact with the world's most interesting lender or at least the world most interesting lenders team yeah um well first they could probably Google me that's the biggest thing they'll see a lot of stuff out there on me Chris Hearn hn um the uh the company is is Community Bank shares that's our holding company um to be very blunt we're redoing the website right as we speak so um you know it's a I don't even know that I have actual website to direct them to right now so probably better to follow follow me on social media or Google me um you email me yeah um it's it's churn C Hearn sounds terrible that it's churn by the way from a marketing standpoint you never want to be churn but regardless it's churn at communitybank shares.com we'll link it in the show notes right maybe we won't it I don't I don't want you get a ton of spam we'll figure it out we figure out Chris it's always awesome getting together with you like I think this is a great interview so thanks for sitting down with me yeah my pleasure anytime sounds good brother all right you