Creating Opportunities For Michigan Businesses And Banks For 12 Years, Crestmark Bank Has More To Offer Than Ever  

By BILL PERRY  

TROY — In the uncertain economic climate that we are all facing today, Crestmark finds itself well-positioned to help small- to medium-sized businesses acquire working capital and to allow traditional banks to retain customers that may be looking for additional financing.  

It’s something that Crestmark has prided itself on since they opened their doors: the ability to partner with banks to create win-win situations for both businesses and banks.  

“These are difficult times throughout the country, and particularly in Michigan . This unfortunate situation finds many banks struggling with a plethora of residential and commercial real estate with constantly declining values. This is impinging bank capital and impacting their ability to respond quickly to the credit needs of commercial customers,” said Crestmark Bank Chairman W. David Tull. “Since Crestmark provides exclusively working capital products, we have virtually no real estate-related assets. Our capital and appetite to lend remain strong.”  

Crestmark Bank provides working capital for small-to medium-sized businesses through asset-based financing utilizing accounts receivable and inventory for domestic/international markets; and provides cash management services that create efficiency for their accounts receivables. The additional cash flow that Crestmark provides allows businesses to fund opportunities such as expansion, acquisitions, turnaround, recapitalization and/or debt restructuring. It also provides businesses with opportunities to negotiate supplier discounts through better payment terms or purchase larger quantities with quicker payment, and to meet their financial obligations, such as payroll, when their own accounts may be slow to pay.  

Some companies may have exhausted their funding options at traditional banks, and may have even been asked to leave their current bank’s funding program. Crestmark’s solutions provide companies with the ability to maintain liquidity without giving up market share, are less expensive and restrictive than equity financing, and can adjust based on the business’ current size and needs. Crestmark creates working capital solutions for many types of businesses, but does not originate financing for residential/commercial mortgages or construction loans.  

Through credit approval of a potential client’s customer base (or debtor), and possibly collateralized by inventory, equipment or other client personal assets, Crestmark mitigates the higher risk of funding by applying appropriate controls and loan administration.  

Targeting the Best Spot To Help Businesses Thrive  

When Tull viewed the potential for beginning Crestmark, he looked specifically for a niche that could fill what other banks typically didn’t. He wanted to create a situation that was not in competition with banks, but part of a team providing additional services that they do not. Tull, a former Executive Vice President and Treasurer for Michigan National Bank and with 37 years of diverse banking experience, takes pride in the long-term relationships that Crestmark shares with conventional banks, each keeping that part of the client’s business where their expertise lies.  

Crestmark was organized in October 1996 as a Michigan state-chartered bank with FDIC protection. As such, Crestmark is held to the high standards of commercial banks while specializing in a niche where conventional banks choose not to play. Crestmark does not keep cash or have tellers; it is funded exclusively through nationally acquired certificates of deposits. With recent expansions, Crestmark has deepened its base of financing expertise, and now has capability in transportation finance and petroleum finance, with nationwide coverage to augment existing skills in manufacturing, services of all types (including staffing, engineering services, property management, and more), and in retail suppliers in the domestic and international environment. The professional and motivated staff has a diverse background in virtually all types of working capital finance.  

In addition, “by partnering with Crestmark, banks can continue to support existing customers and add potential new customers by assisting them with a needed alternative funding source,” said Tull.  

The model of Crestmark is to create timely and cost-effective funding solutions to bridge the time gap until the client has the ability to move into a more traditional banking relationship. Some clients, however, choose to stay with Crestmark, feeling comfortable that they will be there when they are needed, and take advantage of the support services they offer.  

“Working with Crestmark for us was a win-win. It gave us the freedom, security and autonomy to run our business efficiently. And the warmth, knowledge and professionalism of the people we dealt with helped make the experience a positive one, especially in light of the fact that we needed (and received) funding in just three days! We look forward to utilizing further services with Crestmark in the future,” said Christine Mootry, of CMS Sourcing, a Michigan-based facilities management company.  

Flexibility and Services That Make The Difference  

Crestmark’s services are the value proposition that can make the difference. The credit officers and client analysts, who work with customers, help move companies toward success. By working actively with companies to establish stronger accounting controls, cash management, and improvement of company cash flow (which in time, will add to the strength of the company’s balance sheets/income statements), Crestmark can effectively lessen the controls needed in funding, and can position a company to qualify for more traditional lending. “Crestmark provided the financing that specifically applied to where we were in our growth cycle, and adjusted it as we grew; the relationships, professionalism, and business guidance they gave helped us attain our current success,” said Andy Haenszel, CFO, of Capital Media Group, LLC.  

When a deal prospect first comes to Crestmark, the transaction undergoes an analysis, at which point a financing structure is instituted to ensure success of the transaction. These controls can vary depending upon many factors, and as a company’s situation evolves, these controls will adapt to fit. The chart below illustrates the range of administrative controls a client may experience and as the “Operational Profitability” changes; the company’s position on the arrow of collateral administration will progress.   

Continued Growth to Keep Businesses Strong  

In continuing to expand the capabilities of the company, Crestmark has acquired two companies that extend its expertise and geographic reach in the last year. Crestmark TPG, in Nashville, Tennessee, is a long-time transportation finance company; and Crestmark Capital is a factoring company out of Baton Rouge, Louisiana. “Being a part of Crestmark gives us the strength and adaptability of a much larger company, so our reach has grown and our customer support is better than ever,” says Bryan Alsobrooks, SVP of Crestmark TPG.  

The first acquisition that Crestmark undertook was seven years ago, when they were looking for an expertise in traditional non-recourse factoring both domestically and internationally. That group, based in West Palm Beach, Florida, provides a full range of credit and financial services to a variety of industries with particular knowledge of consumer products being sold to retailers and distributors. “American companies have the whole world as a marketplace; we specialize in making it more accessible,” says Barry Essig, EVP.  

Positioned to Continue to Assist Business and To Partner With Banks  

Crestmark’s early goals have, it appears, come to fruition. In addition to increasing the bank’s size and geographic reach significantly (from eight people in 1996 to more than 100 today), they have continued to foster strong long-term relationships with traditional banks. “We truly appreciate the meaningful relationships that we’ve enjoyed with many banks across the country,” Tull said.  

A major share of Crestmark’s clientele have come from traditional banks, where their needs were more than their traditional bank could offer, or may been asked to leave a bank due to financial difficulty. As in any business, no one likes to say “no” to an existing or potential customer, and with Crestmark, banks don’t have to. The banks have several ways that they can work with Crestmark: from acting purely as a referral, to participating in a transaction, or to acting as a partner in the marketing, servicing and funding of clients/customers. The size of the bank doesn’t matter; they’ve got strong relationships with small community banks all the way up to nationwide banking corporations. Regardless, Crestmark has taken what a bank may consider to be a troubled customer, provided working capital and management guidance, and given incentive to the customer to return them back to the referring bank.  

“We like to think of ourselves saying the welcoming phrase from the Statue of Liberty, we’ll take “your tired, poor…” and give those businesses the opportunity that they really needed and might not have found somewhere else,” said Marty Blake, EVP. “The good news is that the credit risk goes away, but the deposits and fee-based services stay with the bank.”  

All of the growth and development that Crestmark has undergone in the last 12 years goes back to one fundamental: their original purpose to help small- to medium-sized businesses succeed while not competing with traditional bank services. In this time of uncertainty in the credit markets, Crestmark’s unique niche may be one important solution that can help businesses survive. “We would not be in business without Crestmark,” says James Doom, President of Prototype Tooling and Manufacturing. And that makes Crestmark feel like they’re doing their job.