10 minute read
Mind Your Business
Mind Y ur Business
Jake Marder & Abe Klugman
By Yitzchok Saftlas
Jake Marder, CEO Abe Klugmann, President of Sales
This column features business insights from a recent “Mind Your Business with Yitzchok Saftlas” radio show. The weekly “Mind Your Business” show – broadcasting since 2015 – features interviews with Fortune 500 executives, business leaders and marketing gurus. Prominent guests include: John Sculley, former CEO of Apple and Pepsi; Dick Schulze, founder and Chairman Emeritus of Best Buy; Beth Comstock, former Vice Chair of GE; among over 400+ senior-level executives and business celebrities.
Yitzchok Saftlas, President of Bottom Line Marketing Group, hosts the weekly “Mind Your Business” show, which airs at 10pm every Sunday night on 710 WOR and throughout America on the iHeartRadio Network.
On a recent 710 WOR “Mind Your Business” broadcast, Yitzchok Saftlas (YS) spoke with guests Jake Marder (JM) and Abe Klugman (AK) of YM Ventures. As the company’s CEO and President of Sales, respectively, they strive to finance businesses of every variety. Helping businesses grow, expand, and support their operations is at the forefront of YM Ventures.
YS: Jake, can you explain the
difference between a bank loan, a private loan, and what YM Ventures provides?
JM: What it boils down to is communication. For a bank loan, for example, you may walk into your local Chase or Bank of America and wait until you get an appointment to speak to a loan officer. Besides for the application taking usually four to six weeks just to get an answer back, if you’re in a tough position and you need it quicker, there’s no one really to urge it along. And let’s say it’s later in the afternoon. Most bankers are already home. So, in addition to us not being that 9-to-5 kind of company, we’re really there whenever you need us – obviously, except for Shabbos – and we know how to package a loan so that a lender may be more agreeable to take your loan application. We also find the best product to suit your needs.
If you walk into any institution or call up a private company, they’ll most likely pitch you the product that they want you to take, which may actually not be the right fit for you. The advantage of going to a company like YM Ventures is that we partner with a whole facet of different products, such as lines of credit, factoring, SBA loans. We’ll actually have a conversation with you, determine what the best product is for long-term growth, and advise you in that direction, as opposed to just pushing something on you that doesn’t really make sense for the long-term.
And last of all, because of the relationships we have with our partners and investors, we often have an advantage over you going to them directly. Because of the volume of business that we do, we get significant discounts on some of the products, which translates into savings for you, as well as the ability to push your loans through quicker, with more expertise.
What’s the advantage of coming to YM Ventures versus try-
ing to go to the Small Business Association (SBA) directly?
AK: When you’re dealing with brokers, you’re looking for someone who has knowledge. And I’ll explain to you why that is so valuable. People think it’s just knowledge and sales. When we’re bringing a deal to the table for our client, we ultimately need to sell the funder and the investor as well. If we have knowledge in multiple different industries, we can come to the investors and come across as someone who understands what they’re looking for. So, they give us an offer faster, and they provide us with better rates.
Knowledge is something that we’re really focused on at YM Ventures and we’re constantly training ourselves and our team to gain experience on different industries and lending rules. I think that is what ultimately allows YM Ventures to stick out and be different.
Jake, before establishing YM Ventures, my understanding is that you saw how other loan companies weren’t being so straight about the fees. Can you discuss what goes on in the industry and how you’re set to change that?
JM: One of the reasons why I left the last company I was at was because there was a client of mine that I had been funding for a long time. I brought him over to this new company, and we funded a deal for him. On the funding call, as is typical in our industry, they go over all the numbers. The owner of the company spoke very quickly under his breath and mumbled something about fees, and the client called me the next day and said, “I ended up with a lot less in my bank account than I thought I was getting.” I asked the owner, and he told me, “I went over it with him on the funding call.” Apparently, he
snuck in something about an extra fee that nobody knew about. I lost that client, who was a great client, and shortly thereafter I left the company for that specific purpose.
Fees are definitely something on which I advise all business owners to not only read any materials or contracts that are sent to you but also to personally ask your loan adviser or broker what fees are involved. Because there are not just fees from a lender. A lot of brokers typically will charge a fee just for getting the deal done. At YM Ventures, a lot of times we won’t even charge a client a fee, or we’ll charge them something very minimal. For example, there are PPP loans from the government, which we don’t charge any fees for. We do it at no cost to our clients. And for nontraditional financing, it really depends on the risk. But we’re here to keep our clients in business and bring them back. So, if it means making a very small fee, it’s worth it for us because we know we’ll keep this guy coming back to us for 10 or 20 times, as opposed to a one-anddone mentality.
Abe, how do you recommend people educate themselves when they head into the world of getting capital for their business?
AK: I think that it is extremely important to have a proper relationship with the broker you’re working with. The brokers all know how fees are structured. They know how it works. If you have someone that you can have a proper relationship with, ultimately, they’re going to review those contracts for you and they’re going to let you know, “Hey, this is the fee structure. This is what it’s going to cost you.”
It’s the famous saying, “never assume.” You’ve got to review it a few times. Look through the contract, don’t rush into anything. Take your time. It’s extremely important to mention – people tend to forget that in this industry, the value that allows us brokers to be successful is residual income. We’re not focused on making that quick buck. It’s about the future relationship that you can build. People that you take care of, that you don’t take advantage of when it comes to fees, they come back to you. It’s small-minded to not be transparent with fees.
Jake, a common practice in the industry is that there are some
companies that keep on draw-
ing money, even after the loan
is repaid. Is this legal? Do peo-
ple know about this? How can they avoid it?
JM: What a lot of clients don’t realize is that the way our lenders get paid back is through an ACH draw from the client’s bank account. While the payment may come out of the account today, it won’t clear into the lender’s bank account until three or four days later. So, they’ll continue to draw until the full amount is repaid. Very often it happens where a client will call us, “Hey, you guys took an extra payment or two,” and bel the “secondary finance arena” with that negative label. I think it’s an injustice and is unfair to the industry. Certain companies, I can’t mention the names, obviously, but companies we’ve worked have been helped through our program. Although it was alternate financing, and the rates were a bit higher, we had the ability to help them scale.
We have a client that we do some business with. They service the oil industry. They called us up, and they said, “We’re looking for immediate financing.” We looked at our documents, we underwrote it, and we saw they are doing around $34 million in business a year. That’s a nice number. We said, “Why would you guys need us for financing? You don’t have the banks, the regular source?”
The response was simple. “We have a line of credit out with Bank of
we explain, “That’s just the way the system works. You’ll get that money back that we overdrew within a few business days.” However, you do need to be wary of this because from personal experience, I know of a few companies that deliberately continue to draw well after the loan is paid off.
What I would advise any business owner is this: Don’t just assume. Keep a ledger of all your payments. I personally recommend something like QuickBooks, where you can link your bank account and it automatically categorizes all your transactions. You can be on top of the payments to make sure that it’s not overdrawn.
There apparently is a negative
stigma that surrounds the non-
traditional financing industry. Is it fair that that there is this
stigma and where does it ema-
nate from?
AK: I’m happy you asked that question, so let me elaborate on that. It is very unfortunate that people laAmerica. Bank of America has something called a UCC lien, also called a blanket lien, that they have on our business. We can’t get additional financing through the regular source. We need to get financing without liens, which means unsecured.”
All right. They had Exxon, Chevron, U.S. Wells and some of the largest companies willing to give them millions of dollars of business. All they needed was to deal with the immediate liquidity issue that they had. They needed cash; they needed to move fast. Currently, we’ve been working with them for over two years. Right now, their revenue flow annually is over $48 million. That’s an example of secondary financing helping a business grow.
A quick thought based on ei-
ther both your initials, or just one of your initials. First, I’m going to turn to Jake. Jake Marder, your pick and your take.
JM: I’m going to go with the M, which is “mindfulness.” My wife recently bought me a calendar which has these daily tips on it for happiness. I saw a great quote in there that I’d like to share with you. It says, “So many of us live our lives as if the secret purpose is to somehow get everything done. We stay up late, we get up early, we avoid having fun and we keep our loved ones waiting. And after we finish our To-Do list, there’s always a new one that’s going to take its place.”
For me as a business owner, and I’m sure all business owners out there, we took the risks to start our companies for a specific reason, whether it’s flexibility, whether it’s security, or financial freedom. Don’t lose track of your ultimate goal, being mindful of what your purpose was, why you started your company, and don’t lose track as a result of the day-to-day stresses.
Special, special. Abe Klugman. A? K? Both?
AK: I’ll start with the A. As a person in my position as president of Sales, A is about “always be closing.” People in the sales industry in general, we all share the same challenges of rejection, having a challenging time, sometimes a few weeks with no sales. It’s hard. We’re commission-based. A stands for “always be closing,” focus on closing, don’t focus on the negativity, keep pushing forward and you’ll succeed.
And K, this is not related to business – I’m just a big foodie. K stands for Kugel. My favorite food. It’s delicious.
