TSL: Congrats on your 10-year anniversary! Scott, what would you say are the biggest changes Gibraltar Business Capital has undergone over these last 10 years?

Scott Winicour: Thanks! It’s been a wild ride these last ten years, but probably the biggest change is when I bought the company from my father ten years ago with the help of private equity. It was a very small, regional player in the factoring space that did average-sized deals of $50,000 to $250,000. One of the biggest changes today is we don’t really do any factoring anymore, and that’s because we’ve morphed into an asset-based lender as opposed to a more traditional factor.  Another big change is that we now have a nationwide presence.  So, we went from a small, localized factoring-only business to a national brand name that people know, with salespeople all across the country. That is, by far, the biggest change.

TSL: How have the past few months been? 

Winicour: We were unbelievably busy, certainly at the start of the pandemic, trying to figure out the right way to react, how do we continue to play defense, how do we insure that A) we protect our investments and our shareholders and make sure that all of our borrowers had the necessary liquidity that they need to get through this unprecedented time.

Knock on wood, the portfolio is doing better than anybody anticipated and new business has been much busier than we would have predicted. So, I’m very pleased with how we’re responding to COVID but, we can’t let our guard down, we’re preparing for a second wave of lockdowns and trying to do everything that we can to make sure that we stay the course. But you can’t really plan for what could potentially happen because you just don’t know. We’re probably one of the few in our industry that’s hiring, although I see some announcements from time to time, but we’ve hired two people in the last two months and we’re looking for at least one more, plus more salespeople, which we’re always looking for. So, we’re pretty optimistic about what the future entails.

TSL: What would you say are your/the organization’s biggest accomplishments over the past 10 years?

Winicour: Getting to be a national recognized brand name in the asset-based space is a huge accomplishment. I think to go alongside that big change is the size that we’ve been able to get to. When I bought the company in 2010, we had $5 million of assets under management and today we have north of $200 million. We’re getting the word out to our referral sources in order to help them understand that we’re not this old-school finance company that only does smaller factoring deals, which is a great market to be in, but that is just not our specialty anymore. We can do deals all over the country, and we can do much larger loans than we ever have done before and that’s going to continue to grow as our balance sheet grows. Our smallest loan today is $2 million, and our largest loan is $25 million. Our average size loan is around $7 to $8 million today.

TSL: Can you call out a big challenge/environment/situation that you faced in your history, how you resolved it and, the outcome – something we can all learn from?

Winicour:  There’s always challenges in this industry, but probably the biggest challenge that I ever faced personally, which I’m sure a lot of us have faced over the course of the long haul in this space, is a fraud that happened way back in 2013. That fraud stemmed from a portfolio we acquired, and the mistake we made was not going down to visit the client right before we acquired the portfolio and again right after.

Had we gone down to visit the company would we have still experienced the fraud? Yes, probably, but not to the degree that we did.  So, there were some great lessons that made us much smarter and stronger that we probably should have known ahead of time, but maybe let our guard down a little bit. We certainly updated our policies and procedures to prevent something like this type of fraud from happening again.

In addition, one of the rules we have in our shop now is to never let your guard down.  The minute you start to relax with a customer who gets desperate, they’re going to find a way to take advantage of you, and that’s what happened to us. So, it was an unfortunate event, we lost a couple of dollars, it didn’t kill us obviously, but it did make us stronger.  But it was very painful to go through during that time.

TSL: What big changes have you seen in the ABL industry over time (either of note or that may signal considerations for the future)?

Winicour:  The biggest change has been the amount of capital that has flooded the ABL market and, in turn, changed the competitive landscape over time.  ABL has become a very popular financing vehicle for lower middle-market businesses, especially nonbank ABL.  Because, as everybody knows, we can be more flexible, nimble, and creative than a bank, but there’s an additional cost to borrowing from a nonbank ABL lender. So, you have to add value for these customers, which I think we do a great job of.  But over the course of the last ten years, I’ve never seen the competition be as fierce as it is today, and by today, I mean pre-COVID. We have to wait and see how COVID is going to affect the competitive landscape for the future.

Hopefully, some of the more aggressive credit decisions and pricing we have seen the past few years will level off with the pandemic. I’m proud of how we’ve been able to grow at pretty respectable levels during an unprecedented time. With competition being as intense as it is, I think we’re doing an incredible job of building our brand and getting the word out as to who we are and the types of deals we do, what our credit box looks like and what our pricing structure is. That’s a testament to our sales and marketing team who are out there every day pounding the pavement and trying to help educate the referral network that we have, in conjunction with our credit and underwriting team who have to deliver what the sales and marketing teams are out there selling. So, it’s a huge team effort.  I’m really proud of our employees and the culture we have built these last few years.

TSL: I’m sure they’ll be happy to read that. What are some of the tools Gibraltar Business Capital offers their employees to increase retention, pre-COVID and during this time, when people are working remotely? 

Winicour:  I think pre-COVID we’d certainly done a great job focusing on culture and building a team that lives by our company values. 

I want Gibraltar to feel very much like a family. It was my dad’s company to begin with and we treated our employees that way and, granted, it was really easy to do that based on our size back then.  It has been a big challenge to keep that family feel as we grow. We have about 25 employees around the country full time today. So, we’re really focused on trying to continue to feel like it’s a family, whether we do company lunches or monthly meetings where I give an update as to the performance of the company. We have quarterly events and impromptu get-togethers, whether we’re going bowling or having a summer event at a Cubs game. We do a family picnic every summer where all the kids are invited and our holiday party is usually with an ‘80s and ‘90s rock band where the spouses are invited and some of the employees actually get up and play with the band.  We also have a casino night that has been really popular.  Overall, it’s a really fun environment that makes it a great place to work.

One of the things I’m most proud of is an award we have called the Thumbs Up Award where an employee recognizes another employee for living the company values.  To summarize it, if someone notices another employee doing something exceptional for a customer, living the company values or doing something for another employee, they send out an email and it gets noted.  We give out awards at the end of each quarter to the people who have demonstrated the company values most often. 

In addition, we give back in terms of being charitable, especially to local organizations. I actually sit on the board of a cancer support center called the Cancer Wellness Center in Northbrook, IL, which is around the corner from the Gibraltar offices. We sponsor their golf outing every year. We also give to a variety of charities at the end of each year, some of which are selected by our clients. We give them a list of charities to choose from and they get to pick the one that’s most important to them. In lieu of sending Christmas gifts, we’re taking that money and sending it to charities on behalf of our customers, which I think really energizes the employees as we’re picking a lot of organizations that mean something to our team and our clients. 

In terms of COVID, it’s been hard. We have company Zoom lunches and happy hours and play games as a group. I try as often as I can to talk to every employee every other week, which is not easy to do.  We couldn’t do our company picnic or Cubs outing this year, but we’re optimistic that we’ll be able to hold our holiday party, we’re just not sure yet. We’ve sent COVID gift baskets to all of our employees. For me it’s about making sure that our employees are not lonely at home and are living a routine that makes sense to them.  We’ve given all of our employees the option to come into the office as an essential business. We have a few employees who come in every day and we have a couple of employees that come in once a week. I’ve held a couple of lunches with some employees when I knew that they were coming in. I would meet them and we, of course, would socially distance and wear masks and take all the necessary precautions and eat outside.  So, we’re doing what we can to stay connected, but it’s hard, there’s no doubt about it.

TSL: What are some of the company’s goals looking forward?

Winicour:  I think our 2020 growth goals kind of got sideways when COVID hit, but we’re actually doing a really nice job making up for lost ground as the pandemic put a brief hold on new business for a month or two. But it has certainly picked back up in tremendous volume.  August was a record month for new business for us.

I have big goals to get to $500 million of outstanding and potentially a billion dollars of outstanding. The question is, over what time period? While I set the bar high to reach these milestone numbers, my month-to-month or quarter-to-quarter goal is to continue building the business and growing each quarter, each year and maintaining that family touch for all of our clients, our employees and every stakeholder. I want every stakeholder that is a part of the Gibraltar ecosystem to get value out of their relationship with us. If everyone is getting value, then we’re firing on all cylinders. This isn’t about growing this business as fast as you can and just build it, build it, build it and sell it, and flip it a number of times. This is building something of value that people want to come to and enjoy being a participant in.  Whether you’re an employee who has personal or professional goals that are different than others, or whether you’re a client who is trying to get from point A to point B, or an investor who’s trying to increase their shareholder value, obviously each stakeholder has a different set of goals and if we’re accomplishing all of our goals for all of our stakeholders, we’ll accomplish our main goal of continuing to grow our business as well as grow personally and professionally.