Pictured: John Nooney (left), Mark Pickering and Charlie Perer

John Nooney and Mark Pickering joined SG Credit Partners with the goal of bringing their upmarket sophistication to the lower middle market to build a broad commercial finance platform. On June 13, SG Credit Partners announced the creation of its Commercial Finance platform exclusively serving lower middle market entrepreneurs and a new website illustrating its expanded capabilities. 

Both of you worked at larger ABL shops for many years before joining SG Credit. Please tell us a bit about your career trajectory and what led each of you back to the lower middle market.

Nooney: Some of the most enjoyable moments of my career were building First Capital with my trusted colleagues prior to its acquisition and subsequent move upmarket.  Large-ticket ABL deals have increased in size, complexity and the sheer number of parties involved.  It’s just a different business these days and, thanks to the focus on ongoing consolidation, there are fewer firms providing sophisticated ABL products below $20 million in facility size.

The enjoyable part of the lower middle market is that it is much more relationship-based with the business owners.  There is a clear lack of capital, even at premium pricing, the majority of folks value the relationship.  These transactions are incredibly meaningful to the small business owner, which is obviously a positive dynamic.

Pickering:  John and I worked together in the Atlanta office of First Capital and always talked about teaming up to start something similar again.  I have known the senior team at SG Credit for many years and I began speaking to them several years ago about the possibilities of John and I building an ABL team for SG.  As the market continued to evolve and the non-bank ABL competitors continued to move up-market, John and I thought the time was right and that SG Credit was the best cultural fit for us given its roots financing family-owned businesses. Similar to John, the best moments of my ABL career were providing financing to businesses generating less than $100 million in revenue. 

Collectively with Charlie Perer, who has done an outstanding job of establishing SG’s national brand, we have a strong blueprint for what we want to do and how we want do it.

Can you please talk about the void in ABL that SG Credit is filling?

Pickering:  Many of the shops that were focused on providing sophisticated sub-$20 million ABL facilities have been acquired and moved upmarket.  Ten years ago, there were significantly more players in this market space.  Thanks to acquisitions and consolidation by banks and BDCs, there are now fewer sub-$20MM non-bank ABL lenders.  We are not competing with the small-ticket folks and not as focused on AR-only deals, so our true market is defined at $5 to $20 million non-bank facilities.  Our market intelligence, flat organization structure, and ability to finance complex situations will make us competitive in this space. 

Nooney:  A lot of the strong lending groups that have the expertise and risk-management to lend to turnaround, inventory heavy and overall complex situations  moved upmarket.  This trend has been the last 20 years of my career in terms of building something, seeing it get acquired and subsequently moving upmarket.  We know the playbook and are going to build a national brand in the sub-$20 million ABL facility space by combining the right ABL product with a service-mentality, strong team and ability to manage risk.  We are not going to chase the small-ticket facilities and simply want to provide a tailored ABL product for all the family-and-sponsor-backed businesses whose needs are not being served.

Perer:  What got us excited about partnering with John and Mark is that we were following the exact same trends and came to a similar conclusion.  Mark joined a year ago to help me lay the foundation and with John joining we are well positioned to grow.

Can you please tell us about the breadth of SG’s Commercial Finance platform?

Nooney:  Yes, the platform is unique in nature and consists of both traditional asset-based revolving loans as well as asset-backed and cash flow term loans from $5 million to $20+ million in commitment size to companies in a variety of industries.  SG CF’s point of difference is the ability to provide both revolvers and/or term loans structures that can be applied stand-alone or in combination with each other.

Traditional asset-based lending is the foundation of the group, but it is complemented by a suite of term products including asset-backed term loans, guarantor-based term loans and first and second lien cash flow term loans that can be delivered independently or in conjunction with an asset-based loan. The goal is to provide clients with more products to choose from.

We should also say that SG Commercial Finance is separate from, but complimentary to, SG’s Consumer Products vertical, which is a specialized ABL vertical that targets a very specific set of sponsors investing in consumer brands. 

Pickering:  This platform can provide a “one-stop shop” suite of solutions to our referral partners rather than limiting us to being a single-product lender.  In the past, we were limited to a single product, which narrowed our reach and ability to provide full financing solutions.  As John mentioned, ABL is our core driver, but we now offer true bridge loans and can also provide stand-alone collateral loans similar to what a few of the appraisal firms are currently providing. 

Perer:  The addition of John and Mark now provides the expertise offering a full suite of commercial finance products to our national referral network.  Educating the market will take time, but collectively our vision is to offer a suite of related products rather than be a single-product lender.

Who do you compete against in the asset-backed term loan product?

Nooney: We actually partner more than we compete, but when we do it’s typically with the appraisal groups who also have lending arms.  We certainly can and have the appetite to originate and hold these assets on our own, but believe that partnering with these groups is a great strategy.  The groups that do it well truly have insight and ability to liquidate and that’s critical for us to know going into a transaction.

What was it about this new role with SG Credit that attracted you?

Pickering: The ability to approach ABL in a way that John and I have envisioned for quite some time and be part of a growing platform.  We touch on it more below, but we have a complete team in place on day 1 and already have a growing portfolio. We still feel like it’s early innings for where SG can go and that we can be an instrumental part of it. 

Nooney: Culture, people, flexibility and an existing national platform with capital and infrastructure.  We did not want to start from scratch and wanted to work with people we trust who understand our vision and view of credit.  Andrew Hettinger deserves a lot of credit as he joined as CIO when SG Credit was first acquired five years ago.  The work he did to help institutionalize and scale SG Credit is truly phenomenal.  Charlie did a great job building a national network and brand while Marc Cole leads the entire organization as CEO.

Can you please talk about the senior team?

Nooney:  The quality of the team was another selling point for us as we have a full ABL and sophisticated deal team in place on day 1 in addition to some of our planned hires.  Having an excellent operations and loan servicing team already in place was significant in allowing for the new ABL team to hit the ground running.     

Pickering: We are very pleased with the team we have in place which enables us to have national coverage and ability to scale quickly.  Charlie, John, and I work very closely on the originations side and have plans in place to add more originations executives over time.

What is unique about your approach to the market?

Perer:  Our primary goal is product and platform education.  We are going to employ a credit-centric model that is extremely focused on product education for ABL and our related products.  Over the past ten years we have built a national and regional calling effort that is combined with strong digital marketing capabilities. We now have the ability to target by region, focus and, in some cases, industry.

Too often lenders try to be everything to everyone and that’s a mistake as their messaging gets lost.  We might not be everything to everyone, but we have a product for just about everyone at some point in their life cycle.

Pickering:  John and I are very excited about the national sourcing engine at SG.  It allows us to evaluate current market trends, view the best opportunities nationally, and focus our senior level resources on the best ones.  This sourcing lets the senior team focus on relationship building with the referral partners and ultimately the owners of the businesses we seek to finance.

Bios:
John Nooney is a managing director and co-head of SG’s Commercial Finance platform with responsibility for all disciplines with an emphasis on credit. He joined the SGCP team in June 2024 and is based in the Atlanta office.

John began his commercial lending career with CIT in Los Angeles and has 30+ years of credit, origination, management, and operational roles working with middle-market companies as an asset-based lender. Prior to joining SGCP, John was a partner with Ares Management LLC most recently responsible for Portfolio on a national basis. Prior to Ares, he was a Senior Executive Vice President for First Capital LLC where he was Region Head for the Southeast. John also held several roles in origination, underwriting, and Risk leader during his nine years with GE Capital. 

Mark Pickering is a managing director co-leading SG’s asset-based lending group and is responsible for originations, deal execution, collateral monitoring, and portfolio management. He joined the SGCP team in April 2023 and is based in the Atlanta office.

Mark began his commercial lending career with Fleet Bank and has 30+ years of credit, origination, management, and operational roles working with middle-market companies as an asset-based lender. Prior to joining SGCP, Mark was a Senior Vice President with Gibraltar Business Capital (“GBC”) and responsible for originating and structuring new debt investments. Prior to GBC, he was a Principal with Ares Management (formerly First Capital) and was responsible for originating and structuring senior debt facilities for private equity groups and middle-market companies. Mark also held several roles in origination, underwriting, and portfolio management during his 10+ years with SunTrust Bank and Guaranty Business Credit.

Mark began his career as a Certified Public Accountant with KPMG and also served several years as the Director of Lender Services for Moore Colson CPAs & Advisors training and managing auditors to perform financial and collateral due diligence procedures for lenders in the Southeast market. Mark received a B.S. in Accounting and Finance from State University of New York at Buffalo.