In this new ABL Advisor feature, Charlie Perer sits with four commercial finance next generation of Business Development Officers (BDOs) to discuss the role of BDOs in today’s market, generational changes and new strategies. The purpose of this series is to hear their views and how they are positioning their businesses for success.Here to tell the story are Bridget Anderson, Senior Vice President of Originations at Siena Lending, Victor Cortes, Executive Director at Wells Fargo Capital Finance, Niko Tsitsos, Director at SLR Healthcare ABL, and Evan Waggoner, Director at SG Credit Partners.
Charlie Perer: Please briefly introduce yourselves.
Bridget Anderson: I am responsible for Midwest originations at Siena Lending Group. I joined the Siena team in August of 2022. Siena is a non-bank asset-based lender focused on middle-market transactions ranging from $10 to $100 million. Prior to my time at Siena, I spent 7 years with PNC Bank where I spent 3 years at the Corporate Bank as an underwriter and 4 years at PNC Business Credit as an originations associate and a relationship manager.
Victor Cortes: I’m currently a business development officer with Wells Fargo Capital Finance (WFCF) covering the greater Los Angeles market, the central California region, Nevada, Idaho and Hawaii. I have spent my entire career in asset-based lending between WFCF and PNC Business Credit. I started at WFCF in field exam, and after two years I transitioned into their Financial Analyst Program. Quickly thereafter, I became an underwriter for corporate and middle-market ABL deals. From there, I took a relationship manager position at PNCBC focusing primarily on sponsor backed deals, before taking on a BDO role within the PNCBC originations team. After some time in that role, I learned that Wells Fargo was expanding their west coast ABL business development strategy and decided to pursue an opportunity on that growing team.
Niko Tsitsos: I am responsible for originating new asset-based revolving lines of credit for healthcare providers and other healthcare companies on the west coast for SLR Healthcare ABL. We specialize in lending on third-party reimbursable accounts receivable (i.e., medical receivables due from Medicare, Medicaid, commercial insurance, etc.).
Evan Waggoner: I currently lead business development for the Consumer Products division of SG Credit Partners. I started my career as an analyst at WFCF and spent time in both underwriting and originations. My early years involved more generalist coverage in WFCF’s Business Finance group, whereas my more recent years have pushed me more toward Consumer Products, where I have a real passion for working with emerging brands.
Perer: Describe today’s lending landscape through the scope of your business and functional role, and how that affects your approach as a BDO?
Cortes: We are in an interesting and competitive lending environment, especially for ABL. Not only are there more private credit funds and non-bank ABL shops in the market today looking to deploy capital, but commercial bank lenders are trying to hold onto and win deals more aggressively than before. I have noticed that commercial bankers have been stretching above their traditional comfort levels by not focusing so much on cash flows, but rather, diving deeper into the collateral to either retain a customer or onboard a new relationship, while offering the same pricing. Should a Company need more than what the commercial bankers are able to provide, the only plausible take out is a non-bank ABL solution. Not to say every opportunity is like this, I have just encountered this trend more frequently than before. This year, I have noticed that cash flow commercial banks are tightening their credits and suspect we will see more cash-flow to ABL conversions in the second half of the year.
Waggoner: Our business tends to focus on companies that often don’t qualify for bank financing. In many ways, this limits options for companies that are seeking credit, but it also creates opportunities for lenders to distinguish themselves among the competition. We are in the midst of a dynamic and fast-evolving market, where more lenders than ever are competing for a shrinking “top tier” of deals, and my approach is centered around finding ways to bring real value to our borrowers.
Anderson: The lending landscape is very competitive right now. With the slowdown in M&A, competition among lenders for new deals is fierce (from both traditional banks and non-bank lenders). I try to emphasize what sets Siena apart, which is speed to execution and certainty to close. Siena is a flat organization, which means that the same team that gives their blessing on my initial terms is the team that provides final credit approval. When roadblocks come up in diligence, our underwriters are good at finding creative solutions (and getting buy in from credit committee) to keep the process moving towards a successful closing. In addition, we have a team that has a long history of working together, dating back to their time before Siena. Their understanding of each other’s communication and credit decisions along with the trust that they each have boosts our origination team’s confidence in pursuing new deals.
Tsitsos: Today’s lending landscape is hypercompetitive. Non-bank lenders are more determined to grow, deploy more capital, and acquire assets than ever as the private credit market continues its expansion. Meanwhile, although most national banks have tightened credit standards, regional banks remain protective of their existing credit relationships as a means to retain deposits. We’ve had to adapt and find new ways to offer a more compelling solution in order to stand out in competitive situations, whether it be greater flexibility on covenants, shorter term commitments, softer guarantees, etc. With that said, even in this competitive market, I find that companies and management teams are still highly interested in finding lending partners that provide accurate and timely feedback, flexibility, full transparency and trust.
Perer: Do you see any stylistic differences between your generation of BDO versus older generations nearing retirement?
Tsitsos: There are some stylistic differences in how we approach networking, but the basics—the blocking and tackling—are the same. It’s impressive how connected the older generation is. That doesn’t happen overnight and takes years of dedication to growing their networks, doing all the little things my generation of BDOs are focused on daily. Stylistically, while it’s still important to cast a wide net, I think today’s market requires you to be more strategic and targeted in your approach, then take the time to develop the relationships that you think will be most meaningful.
Anderson: There are probably a lot of things that have not changed about being a BDO 25 years ago versus now. Those of us at the beginning of our sales career still have to put in the time of countless coffee meetings, lunches and events. But there is objectively a lot more diversity among professionals in asset-based lending today. I think that is a good thing. I love connecting with people on what they are passionate about outside of work. Personally, I have many hobbies and find that it allows me to find commonality with people from all walks of life and backgrounds. This has allowed me to establish my own personal brand and build deeper connections with referral sources.
Waggoner: I believe that my generation uses auxiliary marketing channels (i.e. social media) more frequently than generations past, and overall, we’re able to gain more insight on where to spend time and energy from the numerous informational resources (i.e. SPINS/Neilsen, CapIQ, Pitchbook, etc.) that are now available to everyone in the market.
Cortes: The main difference I’ve noticed is formality, which I think comes more from a societal shift more than anything else. I think my generation of BDOs are less formal in interactions and overall approach compared to the prior generation.
Perer: What’s your go to market strategy that is unique from others?
Anderson: I believe my experience managing a portfolio of asset-based lending borrowers sets me apart from other originators. While those in sales and underwriting roles are focused on getting a borrower through diligence to a successful close, I am focused on setting up clients for long term success. As a portfolio manager, I experienced and worked with businesses through various seasons and cycles. In my role today, I am always contemplating how to structure deals not only for the present moment but also with an eye towards the future and how we can collectively navigate it.
Waggoner: Relationships are my top priority when going to market. While I’d love to be able to know every potential partner of ours, my aim is quality over quantity, which really allows me to focus on the needs of our customers. BDOs represent and speak for their firms, so I try to be as open and honest as possible with everyone that I interact with. Sometimes conversations are difficult and awkward but facing them head on will always result in stronger relationships.
Tsitsos: Being specialized in healthcare makes my go-to-market strategy inherently unique from other ABL lenders. The majority of my deal referrals come from banks and other ABL lenders that do not provide credit to healthcare providers and/or lend on medical receivables. I market myself as more of a partner and resource for my referral source network.
Cortes: I don’t think my approach is overly unique, as I think others may do this as well, but I tend to probably ask for too much information and do a deep dive up front when assessing any opportunity. Given my field exam, underwriting and portfolio experience, I want to make sure I fully understand the collateral, trends, the company’s needs from a new lender relationship, the management story behind the performance, and make sure that the story being told by management aligns with the story being told by the numbers. I like to think that the BDO should know the deal better than anyone else to be effective in building the initial relationship with the company. By scrubbing the information at this level, it allows me to be an advocate for the company and garner support for the transaction, as I should be able to address any questions given my familiarity with the company. The key with this though, is how to quickly get up not speed with so much information, while not giving the company a false hope, which makes transparency so important. Overall, my general strategy is to quickly conduct a mini-underwrite in order to provide timely and candid feedback to the Company. Not all feedback will be positive but being able to provide a quick “no,” and what it would take for a “yes” or even a “maybe,” goes a long way in building a trusting relationship (with the company or referral source).
Perer: What marketing tools (i.e., social media, trade shows, cold calling, etc.) do you find the most useful?
Waggoner: I think that LinkedIn is a great marketing tool for general communications which can be really helpful as a primary or secondary coverage strategy. Generally, social media is a tricky channel to market yourself or your product, and I don’t think that many lenders in our space have successfully utilized any other platforms beyond LinkedIn. Rather than spending a lot of time cold calling. I love going to conferences and trade shows where I can meet brands, sample products and get to know the founders.
Cortes: I haven’t been one to use social media as a marketing tool as much as I would like. I am sure there are benefits that come from it, but it seems as if there is so much noise on social media (personal posts, inspirational posts, self-promotional posts, advertising posts) that any marketing posts tend to get lost in the mix, diluting the impact it carries. I tend to focus on trade shows along with networking events, where I can have a more meaningful and direct dialogue with individuals. Being able to connect in-person allows for a connection that social media and cold calling lacks. Each person is different, so what works for me may not be the best for someone else. The most useful tool is figuring out which method allows the person to be most themselves, which I believe will lead to a natural connection. I view each marketing tool as a way to get your foot in the door, but it’s what you make of the opportunity once you are in the room that will determine how useful it really is.
Anderson: In my opinion, you can’t beat the simple coffee meeting. I do believe meeting in person is beneficial. Especially at the beginning of a relationship, facetime is very helpful in building rapport and more of a personal relationship. By having coffee meetings, I’m not taking too much of someone’s workday but it’s a good venue to catch up on both work and life.
Tsitsos: I’ve found in-person conferences to be the best way to expand my reach and make meaningful connections. The people that attend conferences are the people most willing to meet. Everyone is busy and we all get inundated with emails, so there needs to be a purpose behind your outreach efforts and a call to action. Conferences are the best opportunity to gain someone’s attention.
Perer: What has it been like beginning or growing your career in a remote environment?
Tsitsos: I wouldn’t trade the beginning of my career in an office environment for anything. Not just for the connections I made but being up close and personal with the people who worked in the jobs that I wanted. Observing how they went about their day to day, how they interacted with internal team members and external clients, their work ethic, etc. was my real training. In today’s remote environment, your in-person time is more valuable.
Cortes: To a certain extent, I really enjoyed growing my career in a remote environment, as it allowed for a higher level of productivity and removed the sense of office competitiveness that sometimes distracts from the core work. On the other hand, remote environment didn’t allow for quick and easy interactions that help build a working relationship. I don’t think a fully remote environment promotes camaraderie nor helps anyone grow their careers, as nothing replaces in-person interactions and face-to-face meetings.
Anderson: I am glad that the remote work environment has made video calling more popular. I enjoy getting to see the rest of the Siena team on a zoom call for pipeline meetings every week even though many of us sit in different geographies. I also find it is easier to build rapport with prospects over video call. A lot of communication is non-verbal, and those things get lost over the phone.
Waggoner: Pre-COVID, my team was typically in the office all five days of the week, so the transition to what is now a fully remote role has been challenging but is ultimately enjoyable. I sincerely miss the daily interactions and the ease of getting to know my co-workers on a deeper level. On the other side of the coin, this new way of working offers significantly more flexibility to my personal life, which is incredibly valuable to anyone in business development.
Perer: How important is mentorship and do you believe it is pervasive in the industry?
Anderson: Mentorship is a very valuable tool and can look different in the non-bank community (as opposed to traditional banking where things are more hierarchical). I find moments of mentorship with peers, competitors and colleagues. I think the traditional formal mentor-mentee relationship is less common nowadays, but it is always helpful to gain insight, best practices and wisdom from professionals that have more experience than I do.
Waggoner: Mentorship is extremely important, and I can’t stress enough how valuable my formal and informal mentors have been throughout my career. Finding a mentor is not simple or easy, but I’ve found that if you work to identify the gaps in your experience and express a real interest in learning and development, people are more than willing to step into that advisor role. While most banks and larger non-banks have formal mentorship programs, I believe that even the smaller firms do a good job of pushing their people to connect with certain individuals (either at their firm or within their network) who can offer a similar mentorship dynamic.
Tsitsos: I’ve had great mentors throughout my career and still lean on a lot of them today. It’s important to seek them out, pepper them with questions, figure out what makes them successful, and apply it in your practice. While formal mentorship programs may not be as common anymore, finding informal mentors (and mentees) is critical to your success and your organization’s future.
Cortes: I find mentorship extremely important, and I would not have developed professionally without it. I do believe it is pervasive in our industry, as I have only come across people who want to share their knowledge. There are so many experienced, talented, and smart individuals in our industry that want to pass on their expertise and provide guidance, that we would be doing them a disservice by not asking for their mentorship.
Perer: In your opinion, do you believe that it’s essential to have formal credit training, which many banks no longer offer, versus other functional experience (i.e., field exam)?
Anderson: Any functional credit experience is useful (whether that is formal training or field exam or underwriting). It helps to see concepts in real-world situations. In lieu of formal training, sitting in a role that gives exposure to a wide variety and high volume of deals is a good thing.
Waggoner: I think it depends on the goal of the individual. Functional experience will certainly play a major role in growth for that specific position, whereas formal credit training can offer networking and the opportunity to build a broader skillset which may apply to future positions in senior management. As someone who completed Wells Fargo’s Credit Management Training Program, I will say that it afforded me a chance to explore different groups and functions at the bank that I otherwise would not have been exposed to.
Tsitsos: If having formal credit training is not essential, it’s at least an advantage. It helps in providing accurate feedback in a timely manner and building trust with your clients.
Cortes: Although I think credit training is important to assess opportunities, I would have to lean towards functional experience being more valuable. That is not to say credit training is not needed, as they go hand in hand. Credit training sets the basis on how to view each opportunity and determine what the best structure is, while functional experience provides the foundation to understand collateral, financials, trends and what impact a lender could face if the risk isn’t assessed properly. Functional experience provides the repetition that is needed for one to fully grasp and understand the concept of ABL. I think by having the right leadership, someone can get the credit guidance that’s needed in lieu of a formal credit training program, while functional experience is very much a hands-on approach that cannot be replaced. Overall, both are needed to properly communicate with the prospects and garner support internally. However, if I had to pick one over the other, then functional experience would rank higher.
Perer: Does the ABL industry face a shortage of talent ready to take over for today’s leaders, and what can be done to attract more talented lenders to ABL?
Anderson: From my view, there are plenty of ABL professionals ready to step up to bigger roles (especially in the Midwest). As far as attracting more people to ABL, I would say give people with less traditional backgrounds a chance. Asset-based lending can be taught. Focus on whether or not the person has the right soft skills and the eagerness to learn. Many firms shy away from the heavy lift of getting someone trained up, but they could be missing out on great long-term employees that can step into leadership roles in the future.
Waggoner: I think that the industry is quickly evolving – the old school ABL structures that dominated secured lending for decades are not as prevalent in today’s market. Similar to today’s ABL leaders who grew up with black-and-blue ABL, I think tomorrow’s leaders are currently growing up in a new “hybrid” environment where the talent pool is similarly evolving to accommodate the future of the industry.
Tsitsos: I’ve met and worked with a lot of talented individuals that have experience in different job functions that will make great, well-rounded leaders. I would encourage today’s leaders to be proactive and reach out to their team members to find out what their goals and ambitions are and produce a plan to make it happen. It works both ways too—if you know what you want, let the right people know.
Cortes: Not sure I can say whether the ABL industry has a supply shortage of talent ready to take leadership roles, as we have so many talented people in our industry. I think the question really lies in whether certain talented individuals want and are suited for leadership roles. Just because someone is a high performer and talented, they may not be the best fit for management or leadership. Leadership is more than just having experience under your belt or being the top producer. I think it comes down to having passion and resilience, decisiveness and trustworthiness, empowering others, being an effective communicator, along with experience and execution. If anything, I think today’s leaders demonstrate all those qualities but have their work cut out for them in identifying and selecting those cut out for that next level in such a vast pool of talent. As for what can be done to attract more talented lenders, I feel like education would go a long way. Outside of our industry, few people truly know or understand ABL. Considering how prominent ABL has become over the last three decades, I am surprised that we do not have the same level of attraction as the big accounting firms. We need to find ways to create similar desire and excitement to become asset-based lenders.
Perer: What motivated you to become a Business Development Officer?
Waggoner: I’m an entrepreneur at heart and I believe that relationships are fundamental to both portfolio growth and to downside protection. The functions of the BDO role align with my personal values and give me the freedom to deliver financing solutions that make everyone happy.
Tsitsos: I need to be in constant motion and it’s the most multifaceted role within ABL. I like being client facing—traveling to meet with prospects and referral sources, building relationships, and being the face of my company. I like being on the front lines of structuring credits—balancing what you can execute internally with what will be competitive in the market.
Cortes: I won’t ignore the compensation potential being a big driver to wanting to become a BDO, as that certainly played a role. Although, the main motivation came from the rush and excitement that comes from closing a new deal. There is a magnetic energy working with a team to get a deal across the finish line. I’m not sure how else to describe it, some call it being a “deal junkie,” so I guess being a deal junkie is what motivated me most.
Anderson: I enjoy connecting with and building relationships with people. Moving into a Business Development Role enables me and rewards me for doing that. I believe that everyone has unique strengths and by leaning into those strengths, one has a higher likelihood of being successful. Stepping into a BDO role at Siena has allowed me to put that belief to the test.
Perer: What’s been the most challenging aspect of learning the business development trade?
Anderson: Signing a term sheet and changing lenders is a big decision for a company. While you can deliver everything a company is looking for, it can be difficult to get decision makers to commit. That last 5 percent of the process (getting the term sheet signed and the deposit delivered) is the hardest part and takes practice. There is no right or wrong way to get there, but the only way to learn is through patience and by discovering what works for you individually, while also recognizing that every situation may be different.
Waggoner: When and where to spend time. Especially in the early days, it took a while to recognize who was worthwhile to build relationships with. Even with years of underwriting experience, it was still a challenge to figure out which of my new deals would get approved, so there’s a trial period of sorts that can be deflating until you get into the swing of the market.
Tsitsos: Patience. The work you put in today more often than not won’t generate results for months or years down the road. Prospects aren’t always motivated to move deals along. Deal timelines seem to get longer and longer. I’ve had prospects go with a competitor’s term sheet and come back months later, so patience is key.
Cortes: Working on my golf swing certainly hasn’t been easy. Joking aside, the most challenging aspect of business development has been navigating confidence while being receptive to feedback and collaboration. I find this applicable both with prospects and with approvers. BDOs need to have a level of confidence to gain trust and build rapport, however, there is a fine line between confidence and arrogance. The constant challenge is to ensure that my confidence in the deal and in what I can bring to the table is received, and that it is not perceived as arrogance. This is particularly true as a younger BDO. I always have to ask myself how I can make sure I relay my knowledge in an informative way while not coming across as a “know-it-all.” The goal is to show that I have done my due diligence, but also that I am open to collaboration and feedback. As a younger BDO, the challenge is how to show you know your stuff, but to also be able to ask questions and seek guidance, without appearing inexperienced.
Perer: How will both bank and non-bank ABL evolve over the next decade given the consolidation trends in each?
Anderson: There will always be new entrants to the non-bank ABL space as it is an attractive asset class. What matters is who can stand the test of time. Only those lenders that make prudent new business decisions and appropriately manage the risk/reward will last.
Waggoner: I think bank ABL will continue to move upmarket, and the gap will be filled by non-bank ABL shops who can offer lending solutions of all shapes and sizes. I also see technology playing a bigger role in our industry going forward; while we don’t yet fully understand the potential capabilities and impact of AI, we’re continuing to see software platforms that further integrate systems and improve monitoring/reporting capabilities (both for lenders and borrowers).
Tsitsos: I think we’ll see lenders look to carve out a niche and create loan products for previously underserved ABL markets because being specialized is a great way to stay relevant and in demand. As more capital flows into the private credit market over the next decade and competition to deploy capital increases, bank and non-bank ABL lenders will have to be thoughtful about who they decide to partner with and how it will provide a competitive advantage.
Cortes: Great question, but a tough one. I can’t predict how the industry will evolve, but we are seeing competition for ABL loans as competitive as ever, with both regulated and non-regulated institutions pushing into the space. Although this dynamic may look like a more permanent shift in the marketplace, the industry has seen this dynamic ebb and flow over previous economic cycles. And, while the market is becoming more active and there seems to be an uptick in opportunities to put capital to work, as traditional banks lean in to win business, we could see the dynamic shift back as drawn pricing spreads and loan structures might become more aggressive and it will be harder for non-regulated firms to win, given they traditionally have a higher cost of funds. Ultimately, what I do feel confident about is that ABL will remain an attractive alternative to companies looking for flexibility, ease of execution and competitively priced financing solutions.
Perer: Can you share any unique perceptions about today’s ABL market versus when you started your career?
Anderson: I started my career in 2015 when money was cheap, and times were good. The cost of borrowing is significantly higher in 2024 and has resulted in businesses making different decisions. Overall, borrowers have been more cautious about how much leverage they take on because the debt service can cripple what would be an otherwise healthy business.
Waggoner: The playbook is different. In today’s market, you can become a lender with nothing more than funding and the desire to do so. Some of the fintech platforms are great examples of the ability to build a $100 million-plus portfolio in a very short period of time – and most of them are doing it without deeply experienced secured lending professionals at the helm. This is not to say that it’s going to work out for everyone, but the barriers to entry are much lower today and private credit has never been more relevant in the capital markets.
Tsitsos: Given the number of new bank and non-bank ABL lenders in the market today versus when I started my career, I think it’s only gotten more competitive and it’s more difficult to stand out. That’s where having and maintaining strong relationships is critical for your deal flow and ultimately your success as a BDO.
Cortes: The main difference I have noticed has transpired over the last 18 months with companies having to come to terms with the cost of capital and accepting debt is not as easy, or cheap, as it has been over the past 15 years.
This article first appeared on ABL Advisor: https://www.abladvisor.com/articles/39070/2/next-generation-bdo-panel
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