Ain’t Nothing, but a “G” Thing Baby; Goodbye Super G, Hello SG Credit

Nov
14
2019

Link to article here.

Ten years ago, a self-made entrepreneur named Darrin Ginsberg started Super G Capital, LLC with his own capital and with the goal of financing the merchant services industry (not to be confused with the MCA industry). He never set out to build a lending business and came up with the name Super G as his personal LLC based on a T-shirt his friends gave him with “G” replacing the Superman insignia. Hence, the legend of the “G” began. Cash flow lending was never part of the plan. He soon became the leading financier of merchant services and a pioneer in residual finance. Like all entrepreneurs he looked to branch out. He hired my partner and co-founder and CEO of SG Credit Partners, Inc., Marc Cole, to help raise capital and grow the business. Together Marc and Darrin obtained a commitment from an asset management firm and brought me on to start the cash flow lending division at Super G.

We found ourselves armed with capital in a sea of fintech startups, BDCs awash with cash, in addition to many other existing lending firms. To put it bluntly, we had capital and that was about it. In hindsight, we had two very important things that most specialty finance companies don’t have: capital and time. Darrin had a very successful lending business already, so we had all the time in the world to figure out direct cash flow lending.  And time is what we would need. We spent the first few years of our cash flow initiative largely unproductive and meeting dead ends. Any other lending business would have been shut down by then. But then a strange thing happened, we found the asset-based lending industry… or it found us.

We knew there was a large void in the credit market that banks and ABLs could not fill, but we did not know the best channel in which to start. The ABL industry invented and perfected our product decades ago – the stretch piece or secured cash flow term loan not within the assets. We had unregulated capital, a blank canvas and a national appetite. The ABLs had the clients and know-how. Our mission became simple, be every ABLs first phone call when a stretch piece was needed. We traveled tirelessly across the country many times over with the goal of meeting as many ABLs as possible.

This simple focus made us the leader of our white space and to-date we have funded over $200 million in loans nationwide. We owe our firm’s success to the ABLs who took us in and taught us the intricacies of the business. We surely ate dirt the first few years and the going was tough, but we have found it’s a rite of passage in lending business if you can survive the minefield that awaits all new lenders. Few, if any, innovative lending firms hit a walk-off home run their first time at bat in the majors – it’s too hard and too many variables out of your control have to go your way. We were certainly no different. However, the benefit of time enabled us to live and breathe the ABL industry, and that time enabled us to start to build relationships and a track record.

If asked, I would discourage anyone from starting a bootstrapped lending business. The road is paved with failed lending business that could not weather the storm. The untold battles of getting your first referral from a respected lender or advisor to workouts to recruiting could go on for days. It’s tantamount to having a weekend to start a new football team from scratch and have to compete on day one with the rest of the NFL. Let’s also not forget the hardest part, which is capital. Capital is as precious as air in the lending business and can be fleeting the first sign of trouble. The first vintage of loans we closed tested our mettle and through the benefit of grit – and let’s face it a good economy – it got us to our second vintage of loans, where we started to get a reputation and move upmarket. A brand in any business should never be taken for granted and we will never take ours for granted as it was built on partnerships with the best senior lenders.

The past few years we started to prepare for what we knew would be a very time-consuming challenge, which was spinning the cash flow team out and raising additional institutional capital post-spin-out from Super G. We started expanding our business plan by writing larger checks – up to $5 million and beyond to start laying the ground work for moving up market. In 2018, we also formally separated from Super G by creating SG Credit Partners, Inc., which was a new company that gave us a fresh entity for new investors as well as new recruits.

The saying goes: 10 years until an overnight success. At the 10-year mark, Super G spun SG Credit out and thereafter raised institutional capital from leading specialty finance investors MidMark, Cynosure Group, and 4612. Our investors have decades of experience investing in specialty finance and for the first time in years we have the chance to build a scalable national platform. We took their permanent, family office capital based on a new vision of building a platform of credit products to work with all divisions in a bank. Our white space is to be the leading non-bank partner to every bank, bank-ABL and non-ABL for all the gaps or needs they can’t finance. This ranges from private banking to technology to cash flow lending.

The private equity ecosystem is quite competitive at each level of the capital structure, but few alternatives exist for the non-sponsored business that has a short-fuse or non-traditional capital needs. This is our vision and our mission to solve. The ABL industry will always be our partner, but as we say goodbye to the Super G name and our terrific partners there and transition to SG Credit we look forward to our next mission of being the first phone of every bank and ABL.


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California loans are made pursuant to SG Credit Partners, Inc.'s California Department of Corporations Finance Lender License No. 60DBO-87290. Credit approval is subject to SG Credit Partners, Inc.'s credit standards, and actual terms (including actual loan amount) may vary by applicant. SG Credit Partners, Inc. requires certain supporting documentation with each new application. Complete disclosures of APR, fees, and payment terms are provided with each loan and are available from SG Credit Partners, Inc. at 23 Corporate Plaza, Suite 100, Newport Beach CA 92660, telephone 1-800-631-2423.