Kevin Wood and Flexent interviewed by ProactiveNY

Chesapeake Financial Shares’ Kevin Wood joined Proactive TV in New York to speak about the group’s newly rebranded division named Flexent, which offers factoring and asset-based lending to small to medium businesses, to help groups finance their growth.

CHRISTINE CORRADO
Hello and welcome back to Proactive, New York. Joining us from Chesapeake Bank is Kevin Wood. He’s the Managing Director of Flexent, which is a division of Chesapeake Bank. Kevin, it’s great to meet you! How are you?

KEVIN WOOD
Doing well, thank you. 

CHRISTINE CORRADO
So, Kevin, from my understanding, Chesapeake has rebranded Flexent from what it was formerly called, as “Cash Flow.” Tell us a bot about Flexent and what it does.

KEVIN WOOD
Flexent is a division of Chesapeake Bank that offers factoring and asset-based lending to small and medium-sized companies throughout the country. What we’ve found is a lot of banks no longer offer receivables type financing so we have been able to offer this to a number of companies to really help them finance their growth. 

CHRISTINE CORRADO
So why have you gone through the rebrand from “Cash Flow?“

KEVIN WOOD
Well, what we’ve found in our attempts to expand our digital marketing that Cash Flow was non ‘trade-markable.’ So we worked with a branding firm and they actually made up the name “Flexent.” Because the feedback they got from our clients was that we were very flexible in helping companies grow their business and be as accommodating as possible to meet their needs. And so the term is totally made up but it’s very applicable to who we are what we do. 

CHRISTINE CORRADO
Right. Yep. Definitely makes sense. So, who should be using this service? Who should be taking advantage of Flexent?

KEVIN WOOD
So, it depends on who you who you talk to, but 15 to 20% of small to medium sized businesses in the marketplace don’t really fit traditional lending models. Either their growth rate is too high or they work with very slow-paying customers [like] Fortune 500 type-companies. They also might have a challenged balance-sheet for whatever reason. So, those are companies that really can benefit from cash flow… next day cash flow. But they just don’t fit the traditional bank models. Those are our best fits. 

CHRISTINE CORRADO
So two of your primary products are accounts receivable financing and asset-based lending. What are the benefits of each?

KEVIN WOOD
So, an asset-based lending, where we focus is the smaller ticket market. Typically the large backs like deals like $5 million and higher. We generally only work with $5 million and lower. And what we do is we leverage their accounts receivable and their inventory to be able to give them a true borrowing base product.

On the Flexent factoring product, what we do is provide next-day cash flow for companies. So, if they invoice… a large customer today, rather than wait 30-60-90-120 days to get paid we can give them cash that next day they can pay their suppliers … pay their employees … keep moving on to the next job, and we’ll turn around and wait… at a very reasonable rate of cost. 

CHRISTINE CORRADO
So what is your outlook on how this type of alternative financing will grow?

KEVIN WOOD
I have been doing this for about 25 years, and our trajectory has historically been moving upward. However, the pandemic … last year really hurt our industry. So if you look at the industry-wide statistics, most companies were down 30 to 50% or more. We were down about 30%. It was a combination of companies not being able to do their services… the supply chain disruptions… and the government money … the PPP money and the EIDL loans… they supplanted what we do.

So, the whole industry has been down approximately 30%. However… in these last few months, we have seen a significant uptick in business. And I anticipate 2021 fourth-quarter and all of 2022 to be pretty strong because balance sheets are not going to look as good as they did going into the pandemic needs are going to be greater.

CHRISTINE CORRADO
And there was a recent article this week in American Banker Magazine that said traditional banks are doing less and less commercial and industrial (C&I) lending and we kinda fall into that bucket. 

KEVIN WOOD
Non-bank entities — and we are a bank-owned — but we compete with the non-bank entities is equal to bank-owned C&I lending currently. 

CHRISTINE CORRADO
So you are seeing more businesses taking advantage of these services?

KEVIN WOOD
In the last 2-3 months we have seen a significant up-tick back to more normal levels. 

CHRISTINE CORRADO
And just before I let you go, just give us a sense of why businesses should choose this service versus perhaps other bank services.

KEVIN WOOD
Well, again, the traditional fit of the receivables financing and ABL, we fill a niche that is just really not offered by the majority of the banks in the country. Then a lot of companies are left looking at non-bank entities. You know, online lenders equity firms… different things like that. So what we’ve tried to do is create a bridge where you can work with a bank that’s a state-chartered FDIC insured bank … all the safety, security and soundness of that. Along with offering these unique products that are just not available in the marketplace.

So, what we’ve tried to do is give a low-cost solution to a company to help them meet a need. And we’ve had … helped thousands of companies over the years and they’re all very appreciative and thankful that we exist, because there are not a lot of options out there. 

CHRISTINE CORRADO
Definitely. Kevin — really good to learn more about Flexent. Thank you so much for the time. 

KEVIN WOOD
Thank you! I appreciate your time.