About MonJa’s Small Business Lending Interview Series
In these interviews with lending industry leaders, we cover their stories of success, challenges, and secrets of their competitive advantages in small business lending arena, as well as their perspectives on the online lending industry overall.
Joseph Camberato, President and Co-Founder of National Business Capital & Services
- the small business lending arena
- Founding National Business Capital in the “pre-fintech” era, and joining forces with Kevin Harrington of Shark Tank to roll out the Business Services division
- What it took to secure over $1 Billion in financing through an exclusive global marketplace with over 75 lenders
- How to embrace the constant changes in the industry
- How NOT to use AI in credit underwriting
- This loan is on fire: lending to a fireworks factory
About the company
National Business Capital & Services is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.
James Wu: Hello, this is James Wu, Founder and CEO of MonJa. Welcome back to our podcast on Small Business Lenders.
Today, I have Joe Camberato, President and Co-Founder of National Business Capital & Services.
Joe, welcome to the show!
Joe Camberato: Thanks for having me, James.
James: Perfect. Now to start off, Joe, can you tell our listeners a little bit about yourself and your company’s history.
Joe: Yeah, so National Business Capital & Services was started back in 2007. We’ve been constantly changing since then. We got started in the space before the label “fintech” (laughs) and since then, we basically built a platform that has over 75 lenders on it now and very quickly, through technology and smart people in our office, we quickly match you to the right lender for you and your business and whatever opportunity that you’re looking to get accomplished.
That division, actually, helps small business owners run a number of business services from payment processing, to payroll, to marketing services, to bookkeeping services and some additional ones, and everything really to help grow your business and streamline, you know, operations.
James: That’s pretty interesting and definitely sounds like you have a business model that’s a little bit different from a lot of lenders. We will get back to that in a second. So, just in terms of the businesses that you have funded, what’s an example of the most exciting, most surprising business that you’ve funded through the platform?
Joe: You know, real fun business with …. I mean, there’s so many of them in every single day. A fun one was an old firework place (laughs), really awesome hands-on business owner and he said, hey, you know what, I’ve got an opportunity, it’s a yearly situation, of course, fireworks are pretty seasonal to 4th of July and no one really wanted to look at the application, but the person’s been around for 25 years, it made sense.
We did a cold call and we did something really unique, we were able to get him funded and not collect payments until a certain date when owners and things start coming in for fireworks. So it was really like a unique situation, but really great business owner, been around for a long time and the funny thing, we helped him open up ten additional locations and he’s really, you know, rocking and rolling, so that was cool.
James: That’s pretty exciting. Would you say he’s kind of representative of your typical borrowers? What types of industries and segments do you focus on?
Joe: Yeah, that would not be a typical client, but, definitely, a unique one. I mean, our typical clients are really any type of business that you find in any main street, you know, across the US, so anywhere from restaurants, to retail stores, then to doctors, dentists and then, you know, recently, we’ve been doing a lot in the transportation sector and then technology.
Also, the economy is booming so we’re doing a lot of construction and contracting and manufacturing also.
We work with all different industries, but the main ones are really in the contracting, trucking, retail, restaurant type of space.
James: So for the borrower looking for funding, how would you say it’s different, like what types of advantages do you see for borrowers that come to you as opposed to going to another online lender or a bank?
Joe: Yeah, it’s a great question. Well to another online lender…..what makes us great is we have 75 different lenders on our platform and I think what a lot of people don’t understand, in general, and business owners is there’s a lot of online lenders. I mean, since we started in 2007 there’s so many more which is a great thing, everyone innovating and doing different things and it’s great for small businesses because there is a lot more access to capital more than ever.
The challenging thing is that there are a lot of options which it really frustrating and fatiguing for a business owner to try and shop around and whether it’s to find the best deal, or have a unique situation of finding a lender that’s okay with that, whether it’s a unique industry, whether they’re going through a challenging time in their business, or had an issue pop up and understanding some lenders are okay with that and some aren’t.
Some lenders go up to only $100,000, some go $200,000, some $250,000, some $500,000 so if you’re looking for half a million dollars there’s only a few lenders that really play in that arena without real estate collateral. So what I think we do great is through technology and really having a deep understanding, our technology and our people here in our office, everyone likes to think like they’ve automated everything, but the reality is ai and everything is not there, we’re heading in a great direction, but we have really great, experienced people in my company that have been with us for five, six, seven years and really understand all the lenders guidelines.
What we do differently is on a weekly or a monthly basis, we’re constantly reviewing as a team, almost like a training style, and diving deep into the guidelines, into the changes, keeping up with them so when someone applies with us, we match them very quickly and very easily to a lender that we have a high probability of they’re going to get an approval and usually, one of the better approvals that are out there. And that also means a larger dollar amount, or it can be a lower cost, or it can be a longer repayment term and all these things that make a huge difference, depending on, you know, the reason why one of our clients is taking our financing.
James: Yeah, that makes a lot of sense. I think matching the right lender with the borrower makes everybody happy. Joe, you mentioned ai earlier, did you have a view on using ai and machine learning for lending, especially for business lending?
Joe: Yeah, right now, I think it’s been really great and best used to accompany it with good, talented people. So, using ai to get us to a certain point and then having, you know, a key member, taking the ball from there and run with it, so to speak.
And then, you know, there are certain tedious repetitive tasks that we’ve been able to use ai and technology to replace someone having to do those things over and over and certain points throughout the process.
We were able to use ai and other technologies that really help speed things along really quickly, you know, whether it’s gathering financial information and all that stuff and also streamlining the process.
But, I think, for us, it’s been really good to embrace it, utilize it where we can and build it into our process and systems and then have our really great people on the team here work with it in order to get things done. I think not even in this industry, but in this industry and others, I think some people think technology will get this great, you know, fancy, shiny technology and it’s just going to be a solve-all.
You know, the reality is we all have different processes, you’ve got to really build it into your process, you’ve got to make it work and I don’t think that we’re there yet where I can do everything and you can just take people out of the equation.
James: Yeah, I think that’s very well put. Some of the best uses we’ve heard on ai really is in conjunction with having good people and good processes. Sounds like that’s what you’re doing, that’s perfect.
Joe: That correct.
James: Shifting gears, let’s talk about your lenders. I think that’s one of the things that make you unique compared to a lender that’s doing everything on balance sheet, so tell me a little bit about how that lender matching process works. What types of lenders are on your platform?
Joe: Yeah, that’s great too. You know, we’re everything from SBA and long term loans, to short term, tuitions, to credit lines, to equipment financing and small business loans. We offer everything to our clients, depending on the client’s need is really how we match it, so it’s a combination. When someone applies with us, we’re reviewing their personal, their business credit and looking at their financial info in-house and then through technology and then through people, we are matching. We’re using technology to eliminate all the lenders that just aren’t even going to look at these.
See, you might qualify for equipment financing, but the reality is you need….you’re not looking to buy equipment, you’re looking for a credit line in order to buy inventory non-stopping constantly. So, one thing that I think makes us really different too is if you want to be fully automated, we can work with you on a fully automated fashion and do everything via e-mail, text message, or not even on the type of the topic yet.
But what we found works great and I think our clients really appreciate is we do a simple 5 to 10-minute discovery call to really understand what your need is, what you’re looking to get accomplished and then we take that information and along with technology, we match you to a lender that we believe will give you the best approval.
I think a lot of people don’t understand this, we put a lot of training into our business financing advisors here, really not only understanding the guidelines and the products and the programs that are available but understanding business and our customers’ needs for their business.
Based on those needs, through a very simple conversation, we back-in the right financing products.
James: That really takes training and experience, I can see that. So the lenders you’re talking about, are they primarily private lenders, are they banks and credit unions, what’s the mix like?
Joe: Yeah, it’s a combination of all. They could be private lenders, they could be banks. Some of those private lenders are publicly traded so they’re large lending institutions, but it’s a combination of all.
Last year, we were the Business Lending Advisor of the year for OnDeck Capital, which is a publicly-traded company, which was really great. I think they have like 1,200 or something partners, so, you know, they’re a publicly-traded company, so all different types of lenders are on our platform.
James: That’s terrific! Okay, so let’s look more broadly and talk about small business lending. You have only been in the sector for a while, how would you say small business lending has evolved in the past few years?
Joe: How has it evolved… I think each lender has really started to come into their own. I think everyone is starting to focus on a set of guidelines or have their own type of product. I think it’s probably 3, 4, 5 years ago, other lenders were doing the same thing. Now, I think, what’s happened is a lot of lenders have focused in certain areas, certain products which is great, but it makes it more important they understand and really keeping up with those changes and guidelines so you can ensure that you’re offering the most winning product available.
James: Alright, I think that’s very true. A lot of times, you see lenders specializing in products that they can do very, very well, rather than trying to do everything.
Joe: Yeah, I think as the space has evolved, the industry is really growing. I think in the beginning, people were trying to cast a wide, wide net and I think, through that, a lot of learning happened and some people found that they were better in certain programs or industries, or, you know, a sub-set of type of clients that make sense for them.
James: Do you think the wave of fintechs coming into the market changed the market and are they for better or for worse?
Joe: Yeah, I think, when there’s competition…when you’re dealing with competition, I think every industry is dealing with competition in fintech in some way, not just lending. I think when you’re dealing with that, it forces change.
To be honest, most people fight change and it’s a very frustrating thing.
We, as a company and myself, in general, I love the change and we should really embrace it and we just continue to roll those changes and it changes our business to continue to make the process better for our customers and clients.
I think that competition really forced a lot of people to improve. There’s a lot of, I think, lenders that have been around for a long time that did not make the necessary changes and you kind of get behind the times and you experience, I think, the customers are not having the best so it’s forced a lot of people to deliver a much better experience for everybody.
James: Well, ultimately, that benefits the borrowers, right, which is ultimately good.
Joe: Yeah, absolutely.
James: So looking ahead, what are some of the major changes you expect in this sector in the next few years?
Joe: You know, it’s interesting, I wish I had a crystal ball! I think that people are going to continue to get specialized in certain areas, whether it’s a specific type of client, industry, a program or product type. I think you’re starting to see that people are getting really focused in certain niche products and niche industries and things like that. And, I think, it’ll be really interesting to see what happens with technology in the future and what that will do to really all of our businesses.
James: Do you think there’s a recession coming, or around the corner? Are we already in a recession?
Joe: Yeah, from my seat, you know, businesses are coming to us and they’re taking a funny thing to grow their business and take advantage of opportunities out there.
So from where I’m seating right now, the economy still seems pretty strong and it seems like everyone coming to us is taking advantage of opportunities to grow their business, whether it’s hiring more employees, or more inventory, or additional locations, or taking on more jobs.
So, as of right now, I don’t see that at the ground level with our customers, it seems like everything is good there. Usually, we have a pretty big front seat, I think, to that so if you start to see customers borrowing money because of challenging situations, or not borrowing money, you start to hear that our people aren’t talking about opportunity, it’s usually a signal, but right now, we’re just not near that.
James: Right, yeah, nobody has a crystal ball, it’s interesting to see in hindsight. Yeah, that makes a lot of sense, it definitely seems like there’s still a good amount of optimism and demand still seems strong, so that’s good, definitely.
Joe: And, you know, not looking to get political, but, we’ll see what happens with the elections and that usually gets people acting weird. So, hopefully, going through the elections will be as smooth as possible.
James: Yes, at the very least, I think that forces clarity in a lot of the directions ahead, at least for another four years. Okay, so I guess you talked about a lot of aspects in lending, so when you bring it all together what do you think are some of the important ingredients for a small business lender to succeed?
Joe: I think that really understanding your client, understanding the industry. Every industry is changing rapidly so I think in lending, especially, but in business in general, there’s really no said it and forget it.
You have to continue to keep changing with the times, whether it’s your process, whether it’s your technology, whether it’s your product offering and whether it’s convenient and ease of use for your customers.
You know, I think the lenders that have really embraced that are doing well and I think the ones that haven’t or do not deal with challenges are always kind of playing catch up.
James: Yeah, that makes sense. So when you look ahead to 2020, what are some of the things that you are doing in your business that’s moving the business ahead, especially both in the core lending business and also some of the additional services that you’re providing your customers.
Joe: Yeah, great question. I mean, we provided over a billion dollars in financing to small businesses all across the country now which is really amazing. As we really move ahead, our main focus and our vision and mission for our company is innovating the way entrepreneurs grow.
We’re looking to keep delivering on that and really being a resource for small business owners, whether it’s education, whether it’s additional services to help streamline their process or grow their business.
We really want to be that company that small business owners think about or go to to take our funds and to grow their business, to utilize our vetted out services, or to use us as a resource for education and different things that everyone needs to help grow their business.
James: That’s terrific. Well, Joe, thanks for taking the time to speak to us today. We’ve learned a lot about your business and I wish you the best in the years ahead.
Joe: Yes, same to you, James, thanks for having me today.
James: Alright, have a nice day.
Joe: You, as well.