Lender Spotlight: Republic Business Credit
Our Lender Spotlight series features investors and industry leaders across Private Credit who have successfully deployed capital via Hum’s Intelligent Marketplace. Each Q&A will discuss their investment strategy, key market insights, and how they partner with Hum to accelerate their deal sourcing and underwriting.
Republic Business Credit (RBC) provides flexible working capital solutions to help rapidly growing businesses, start-ups, and companies in turnaround or recoverable distressed situations that need facilities of up to $20 million. Republic’s commitment to excellence has earned significant recognition, including the Association for Corporate Growth’s 2015 “Emerging Growth Company of the Year”, ABFJ’s 2024 Best in Leadership, and SFNet’s 2024 Best Places to Work, in addition to numerous individual employee awards.
Eric Dorner is VP of Business Development at Republic Business Credit. In this Lender Spotlight Q&A, Dorner discusses Republic Business Credit’s investment thesis, the growing asset-backed lending (ABL) market, and how RBC is accelerating their mission to empower growing businesses.
Q:Thanks for taking the time, Eric! First, can you provide a brief overview of Republic Business Credit and the firm’s investment thesis?
A: Thank you for the opportunity! Republic Business Credit is a commercial finance company that operates as a wholly owned subsidiary of Renasant Bank “RNST” and is proudly headquartered in New Orleans, Louisiana. RBC provides senior debt solutions to the middle and lower middle markets in the form of Asset-Based Lines of credit, inventory-only e-commerce loans, as well as recourse and non-recourse factoring. We are broadly industry agnostic with deep industry expertise in consumer-packaged goods, food & beverage, apparel, temporary staffing, oil/gas, manufacturing and service-based businesses. We define our segment of the middle market as businesses doing less than $150mm in annual revenue.
Q:Hybrid ABL-private credit facilities are up 15% annually since 2020, a trend that’s expected to continue as bank lending tightens. Why is this structure gaining traction in today’s market?
A: The short answer is that bank credit remains tight due to uncertainty – so the growth in private credit is filling a gap of underserved customers. The longer version is that despite the uncertain macro-economic conditions and bank credit tightening, there is an ever-expanding market of non-bank lenders out there with more flexible product offerings that can enhance availability at a coupon that isn’t drastically more expensive than a bank. Asset-Based revolvers provide more structure, flexibility, collateral monitoring and are generally viewed as providing more lender control than a cashflow term loan assuming it’s managed correctly.
This flexibility is critical in today’s evolving environment. Importing businesses can face sudden and significant tariff changes, so the need for flexible liquidity is paramount to efficiently manage their supply chain. Given that private credit is often more transactional and adaptable in nature, many businesses accustomed to bank-type financing find these hybrid facilities to be an ideal short-term solution—or a responsive bridge during periods of economic change—when they need greater liquidity and flexibility, even at a higher cost.
Q: As a lender, what are your top 3 tips for growing businesses seeking an ABL facility?
A:
1) Go through an advisor, like Hum (!), to provide lender choices that are often pre-qualified and are a good fit from credit, industry and size perspectives. The process will provide a range of structure, pricing and guarantee requirements which will generally result in the borrower being able to prioritize price or availability.
2) If there is missing information, hiccups in performance, or any respective ‘skeletons in the closet’ – steer into them and provide this information on the front end. Credibility and trust are essential with any lending relationship; if a lender know these things on the front end it will be easier to structure something that works for everyone. Even in the event the lender needs to pass – it will save you time.
3) Before you start having calls with lenders, make sure your financial reporting is up to date and as clean as possible.
Q: Why did you and the Previsible team decide to raise outside capital to help grow the business?
A: Continued success hinges on evolution, and RBC has always been committed to making improvements wherever possible. To thrive in this environment, we’ve revamped our sales strategy, bringing together efficiency, collaboration, and a steadfast dedication to our guiding principles. One significant evolution has been empowering our Business Development Officers to pre-qualify opportunities more rigorously and integrate their initial detailed write-ups directly into the underwriting process. It creates a more informed starting point for our underwriters, significantly accelerating our credit decisions while also ensuring we maintain our risk standards. This collaborative approach not only streamlines our processes but also underscores our commitment to pursuing deals that are fundamentally sound, benefiting all parties involved. As the number of lending opportunities continue to increase, we find borrowers are prioritizing partners that execute with genuine intent and an understanding of their business.
Q: How did Republic Business Credit discover Hum Capital and what has your experience been like deploying capital via Hum’s Intelligent Marketplace?
A: Actually, Ben Constanzo from Hum’s Markets team connected with me on LinkedIn several years ago (hi, Ben!). Working with Hum has been a wonderful experience thus far and have seen several transactions that fit our credit box well. Hum is a great partner as they work in their clients’ best interest, understand credit, and can help steer the transaction to a successful close.
Q:How about a fun question! What’s been the most rewarding moment of your 16+ year career as a lender?
A: I can’t point to one transaction/deal. I will say that the most rewarding times are when I’ve helped others in our industry. Whether it’s finding someone a job, referring a deal or being a mentor – it’s nice seeing others succeed. As the cliché phrase states – a rising tide lifts all boats!
This testimonial may not represent the experience of all clients and is not indicative of future performance or success.
