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Geof Longstaff, chairman of Mercantile Commercial Capital, LLC, which will be a division of the new bank, said Jim Lane has been appointed to Emergent National Bank’s (proposed) board of directors. Lane is a former senior partner at Price Waterhouse Coopers, Longstaff said.

Dwayne Hamner was appointed executive vice president and senior lender at Emergent National Bank (proposed), Longstaff said. Hamner, a former executive at SunTrust Banks and First Mercantile National Bank, most recently served as a development partner with Sumner Kramer of Winter Park.

“Now is probably the best time to start a bank, as the bank will search out new customers and new relationships, many of which will feel underserved by their banks who are at the present time dealing with the problems that financial institutions are experiencing,” Longstaff explained.

Bank directors have already applied for a charter and plan to lease a 16,000 square foot office building at 501 New York Ave. in Winter Park as the bank’s headquarters.

Opening date is set for Dec. 1, Longstaff said.

Geof Longstaff, chairman of Mercantile Commercial Capital, said first quarter loans included three hotel properties valued at $14.2 million. Two of those hotels are located in Texas and one in Louisiana.

Christopher Hurn, president of Mercantile Commercial Capital said the first quarter loans funded projects in five states, including Florida. Altogether, Mercantile’s net income during the first quarter is up more than 38 percent over the same period last year.

Mercantile Commercial Capital’s first quarter loans helped to create 119 new jobs, Hurn said.

In 2007, Mercantile Commercial Capital closed on 48 loans for projects that totaled more than $102 million.

For more information please contact
Chris Hurn, Mercantile Commercial Capital, LLC 407-786-5040
Geof Longstaff, Mercantile Commercial Capital, LLC 407-786-5040
Larry Vershel or Beth Payan, LV Communications, 407-644-4142

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Certified Commercial Investment Member (CCIM)

Florida Hospital Foundation

Greater Orlando Regional Chamber of Commerce

National Association of Development Company (NADCO)

National Federation of Independent Business (NFIB)

Orlando Sanford International Aviation Authority Board

Sales Centre at Ohio University

Seminole County Chamber of Commerce

Past Involvment

Association for Corporate Growth (ACG) Orlando Chapter

Financial Executives International (FEI) Orlando Chapter

Leadership Council of AEA’s Florida Chapter

Metro Orlando Economic Development Commission’s Technology Industry Advisory Board

National Association of Industrial and Office Property (NAIOP)

Briefly . . .

Mercantile Commercial Capital LLC in Altamonte Springs raised $6,410 for its charity partner; the Florida Hospital Foundation, at its Fifth Anniversary Mardi Gras Bash on Feb. 21. The company gave away 100 percent of the admission fees that the more than 200 guests paid to attend . . .

Giving Orlando Sentinel- April 14, 2008

Financing

Mercantile Commercial Capital LLC, which specializes in U.S. Small Business Administration loans for small business owners, has closed on eight commercial property loans since the first of the year for projects that total more than $20.5 million. Christopher G. Hurn, president and chief executive officer of the Orlando company, said the loans included $2 million for Sun-Tek Industries LP of Orlando to refinance its 64,000 square-foot warehouse, and $1.65 million to Peyton Place LLC and Logic Systems Services, Inc. in Orlando to acquire a 6,300 square-foot office in downtown Orlando.

Orlando Sentinel- April 14, 2008 Orlando Sentinel- March 31, 2008

info@mercantilecc.com

Phone: 407.786.5040
Toll Free: 1.866.622.4504
Fax: 407.682.1632

For the past few years our staff has decided that it’s better to give than receive, so we’re pooled our personal and corporate gift money and chosen a worthy charity — one giving a “hand-up” rather than a “hand-out.” The Intrepid Fallen Heroes Fund provides help to U.S. military personnel who have been wounded in the line of duty and also for their families.

It turns out that this organization holds a special place in Piers’ heart — his brother has served two tours of duty in Iraq, and his brother-in-law has served two tours in Afghanistan.

We, too, try to do our part and were honored with a commemorative medallion, a special listing in their hard back book and a special title placed near the entrance to the Center for the Intrepid, the National Armed Forces Physical Rehabilitation Center.

Believe it or not, Tony and Nick were at a tradeshow in San Antonio a couple weeks ago and happened to visit the Fund’s state-of-the-art physical rehabilitation facility . . . the very next day after Piers won his Apprentice job! Of course, it was the same facility that appeared in the final episode of Celebrity Apprentice and that we helped build.

Congratulations to Piers, and our many thanks to the Intrepid Fallen Heroes Fund for the help they provide to our brave soldiers and their families.

If you would like to join us in making a donation, you can visit www.fallenheroesfund.org

Mercantile Commercial Capital, LLC closed on a $5 million loan to R.D. Hospitality LLC to acquire the 67-unit Sleep Inn and Suites in Lake Charles, La. MCC also closed a $4.9 million loan to Radiant Properties LLC to acquire and renovate a 145-unit Days Inn Crossroads in Austin, Texas, and a $4.1 million loan to Khattra Hospitality LLC to acquire an 80-unit Days Inn Hotel and Suites in Marshall, Texas. Peyton Place LLC and Logic Systems Services Inc. got a $1.6 million loan through MCC to acquire a $1.6 million loan through MCC to acquire a 6,300 square foot office building in downtown Orlando.

Mercantile Commercial Capital, LLC closed on a $5 million loan to R.D. Hospitality LLC Orlando Business Journal- March 28, 2008

Capital and cash-flow are king for business owners, but even the most well-intentioned forget it. A former Client of mine (very briefly) started a food preparation business for busy families. While there are plenty of these concepts in franchised form, she wanted to start it from scratch. Since she was just beginning, it made no sense to purchase her property, so she rented her facility. Her banker didn’t really like the kitchen equipment and other leasehold improvements as collateral, but rather than searching for other options, she plowed most of her cash into paying for these things. Strapped for capital to operate and market her business, she closed down not quite six months later and went back to work for someone else, instead of realizing her dreams. Sad. Truly sad on many levels. So what should she have done? She should have gone to another banker and gotten an SBA 7(a) start-up loan with terms that would have allowed her to stretch her dollars. She would then have had the capital to operate effectively and market her business in order to establish it in the marketplace. Years later, she would then have needed to buy her commercial property to create additional wealth from her business (not through operating it, but through converting her rental payments into an income-produced mortgage payment on an appreciable asset like commercial real estate) with cash-flow sensitive financing — meaning longer terms and half as much cash down. But now, her dreams are shattered. This is exactly why, in good times and bad, I’ve always advocated putting as little cash down as possible — to be like all the other smart investors who always try to get the greatest return from their investments, not merely to appease the first banker they speak to. It’s also why getting longer terms with real estate financing makes so much sense — you stretch your payments so you can weather the cycles and worry less, but always have the ability to prepay when you’re in great times. It’s like having your cake and eating it, too. But no matter how many times I’ve stated this over the years, many people think the good times will always continue when we’re in one, and they preserve virtually nothing for when times get tough. Well-intentioned is nice, but it often doesn’t produce the results we need. As a fellow business owner myself, I KNOW (certainly more than employee-bankers telling people, “now isn’t a good time to buy”) that preserving cash is a regular balancing act for entrepreneurs. Why anyone willingly increases the risks to their business to put down two to three times the capital that’s needed for their bank when our SmartChoice™ Commercial Loan is readily available is beyond me. Why anyone would accept a 15-year amortization on a commercial loan that ends up pinching your monthly cash-flow when 25-year and 30-year terms are available from us is beyond me. Why anyone would continue leasing their property after they’ve established themselves in their marketplace, just making their landlord wealthy is beyond me. Why anyone would work with an ordinary banker, instead of an entrepreneurial one (not an oxymoronic statement in our case) is truly beyond me! Perhaps it’s time we chat.

This is THE place to get smart information on how to best produce wealth and better grow your business. Don’t be like the lady in the story above OR let your clients be like her. This is the ONLY place to get truly useful information on ways to grow your business better AND learn of the smartest financing options for business owners and entrepreneurs ready to produce additional wealth from their businesses. Now go pass it on . . . and do your small part in our economic recovery. The sky isn’t falling. There are blue skies ahead and bigger and better days, too. Now TAKE ACTION and right your ship! I wish you, your Clients, and those you know success and prosperity . . . regardless of current economic conditions.

Biz Watch

Day care gets loan

EDGEWATER – Mercantile Commercial Capital, which specializes in the U.S. Small Business Administration 504 loans, said it made a $135,000 loan for Leaps and Bounds of Edgewater to acquire a 915 square foot child day-care facility.

The acquisition is the fourth Mercantile has financed for Leaps and Bounds. Mercantile reported closing on eight commercial property loans for projects that total more than $20.5 million since Jan. 1.

- Staff, Wire Report

Day Care Gets Loan The Daytona Beach News Journal- March 26, 2008

Business Briefcase

Mercantile to Start Bank

Mercantile Commercial Capital LLC of Altamonte Springs, which specializes in U.S. Small Business Administration 504 loans for small-business owners, plans to launch Emergent National Bank late this year.

“This is the natural extension for Mercantile Commercial Capital,” said Mercantile Commercial Capital chairman Geof Longstaff. “This will solidify our place as one of the nation’s leading SVA 504 lenders and give the bank a real ‘head start’ by merging Mercantile’s loan portfolio and operations into the bank.”

Shannon Marks, who has 20 years of banking experience, will serve as president and chief executive officer of the bank. Christopher G. Hurn, president of Mercantile Commercial Capital, will be senior executive vice president and run the government lending division as well as the combined entity’s marketing strategies.

Longstaff, who will be chairman of the new bank, has more than 38 years of experience in banking and has been president of four national banks. He said the bank will focus on real-estate lending and small business loans.

The bank will be based in Winter Park.

Mercantile to Start BankSunday Seminole- 03/08

Mercantile Arranges $22.6M in Loans

Altamonte Springs – Mercantile Commercial Capital, LLC closed on eight commercial loans recently that totaled more than $22.6 million in project costs.

The new loans include:

• $1,882,215 to Bob Bickhaus Motors Inc., Macon, MO, to build a 19,959 SF Bentz GM Country automobile dealership with a 25-year, fully amortizing term with a five-year fixed interest rate and 90% loan-to-value financing. Total project cost is $2,090,350.
• $3,718,000 to Atserv Group Inc. to develop an 18,000 SF multipurpose community facility in Waukegan, IL. Mercantile arranged a 25-year, fully amortizing loan with a five-year fixed interest rate and 85%loan-to-value financing. Pawl Janowicz of Gateway Mortgage Group in Chicago participated in the transaction as a referring agent.
• $1,935,000 to Claddagh Corp. of Heathrow Inc. (Olde Hearth Bread Company), an artisan bakery that supplies hotels, restaurants and theme parks, to build a 7,250 SF multiuse facility in Casselberry. Mercantile arranged a 25-year, fully amortizing term with a five-year fixed interest rate and 90% loan-to-value financing. Michael Heidrich, principal at NAI Realvest in Maitland, participated in the transaction as a referring agent.
• $336,600 to Adept Retirement Inc. to acquire a 2,734 SF assisted living facility in Clearwater with a 25-year, fully amortizing term, a five-year fixed interest rate and 85% loan-to-value financing. Bob Simmons, Mercantile’s correspondent in North Tampa, participated in the transaction as a referring agent.
• $5,077,000 to PJAB Enterprises Ltd. (Baillios Inc.), an Albuquerque, NM, electronics store, to provide long-term refinancing for an 84,000 SF warehouse facility with a 25-year, fully amortizing term and a five-year fixed interest rate.
• $2,409,750 to IE Real Estate Group, LLC, a Fenton, MO, manufacturer of renewable energy equipment, to acquire a 63,500SF office/warehouse in Fenton. The loan has a 30-year, fully amortizing term, a 30-year fixed interest rate and 85% loan-to-cost financing. Scott Schlote, Mercantile’s correspondent in Sunset Hills, MO participated in the transaction as a referring agent.
• $331,500 to Coleman’s Music Company (C&R Games Inc.) of Jacksonville to provide long-term refinancing for a 10,414 SF building in Jacksonville with a 30-year, fully amortizing term and five-year fixed interest rate. Dave Lewis of Liberty Mortgage in Jacksonville participated in the transaction as referring agent.
• $5,554,000 to SFMRJ LLC of Santa Fe, NM to provide long-term refinancing for a 43,000 SF warehouse facility in Santa Fe with a 25-year, fully amortizing term an da five-year fixed interest rate. The warehouse facility will serve Baillos Inc.

Mercantile Arranges $22.6M in LoansFlorida Real Estate Journal- 03/08

Christopher G. Hurn, president and chief executive officer of Mercantile Commercial Capital LLC., said the loans include:

• $135,000 to Leaps and Bounds, LLC of Edgewater, Fla. to acquire a 915 square foot child daycare facility in Edgewater. The acquisition is the fourth Mercantile Commercial Capital has financed for Leaps and Bounds, LLC;
• $2,000,000 to Sun-Tek Industries, L.P. of Orlando to refinance its 64,000 square foot office warehouse facility in Orlando with a 30 year term and 30 year fixed interest rate;
• $2,137,000 to the Serene Center of Long Beach, Calif. to acquire a 9,996 square foot rehabilitation center in Long Beach;
• $4,100,000 to Khattra Hospitality, LLC to acquire the 80 unit Days Inn Hotel and Suites in Marshall, Texas;
• $495,000 to Helms Lawn and Landscaping Service, Inc., in Lyons, Ill., to acquire a 9,450 square foot commercial building in Lyons;
• $4,992,525 to Radiant Properties, LLC to acquire and renovate the 145 unit Days Inn Crossroads in Austin, Texas;
• $5,048,000 to R.D. Hospitality, LLC, to acquire the 67-unit Sleep Inn and Suites in Lake Charles, LA.;
• $1,651,000 to Peyton Place, LLC and Logic Systems Services, Inc., a three-year-old construction consulting company in Orlando, to acquire a 6,300 square foot office building in downtown Orlando.

For more information, please visit http://www.504experts.com.

For more information please contact
Chris Hurn, Mercantile Commercial Capital, LLC 407-786-5040
Geof Longstaff, Mercantile Commercial Capital, LLC 407-786-5040
Larry Vershel or Beth Payan, LV Communications, 407-644-4142

Mercantile Commercial Capital Closed Eight Commercial Loans On Projects Worth More Than $20.5 Million in January and February Orlando Sentinel- 03/21/2008

Geof Longstaff, chairman of Mercantile Commercial Capital, said he and an organizing group recently filed an application to form a national bank. He expects to open the new bank in the fourth quarter of 2008. The application includes plans to acquire Mercantile Commercial Capital, LLC as part of the chartering process.

“This is the natural extension for Mercantile Commercial Capital,” said Longstaff. “This will solidify our place as one of the nation’s leading SBA 504 lenders and give the bank a real ‘head start’ by merging Mercantile’s loan portfolio and operations into the bank.”

Shannon Marks, who has 20 years of banking experience, will serve as president and chief executive officer of the bank, Longstaff said. Christopher G. Hurn, president of Mercantile Commercial Capital, will serve as senior executive vice president and run the government lending division as well as the combined entity’s marketing strategies.

Directors of the new bank include Longstaff, Marks and Hurn, along with Timothy Bailey, a Lake County real estate developer; Gene Joseph, a former IBM executive and high-tech entrepreneur; Steve Podolsky, a Chicago investor and longtime Orlando commercial developers Howard Shieferdecker and Howard Lefkowitz.

Longstaff, who will serve as chairman of the new bank, has more than 38 years of experience in banking and has been president of four national banks. He said the bank will focus on real estate lending and small business loans.

The bank directors have secured a lease on a 16,000 square foot office building at 501 N. New York Ave. in Winter Park to serve as the bank’s headquarters.

Mercantile Commercial Capital celebrated its fifth anniversary in February and according to Longstaff has closed on some $200 million in loans, creating some 1,700 jobs.

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Lender files papers to start up bank based in Winter Park

In a novel multimillion-dollar deal, small-business lender Mercantile Commercial Capital is morphing into a new startup community bank, company executives said Thursday.

Mercantile Commercial’s senior management team — which includes several veteran local bankers — has filed a petition with federal regulators to establish Emergent National Bank, which will be based in Winter Park, organizers said.

They plan to raise $37 million in startup capital to launch Emergent, which will then acquire Altamonte Springs-based Mercantile Commercial for $9 million in stock and $2 million in cash, said Geoff Longstaff, Mercantile’s chairman and future chairman of Emergent National. Officials hope to get the charter approval and open by year’s end.

Longstaff said the move is designed to help fuel Mercantile Commercial’s fast-growing business, which focuses on SBA-backed loans to small businesses that are expanding or acquiring their own facilities. Mercantile is a national player in the SBA’s 504 loans, which bank regulators consider lower risk and high credit quality.

“That’s one of the things we feel gives us a leg up on the typical startup,” Longstaff said. “We will start out with a
loan portfolio of almost $20 million that will already be producing revenues.”

Emergent is the latest in a string of new Central Florida banks launched
amid turbulence in the financial sector. It is the fourth bank to organize since last November, including New Traditions National Bank in Orlando, Reunion Bank in Tavares and MidFlorida Bank in Maitland.

Despite stress of the financial crisis, industry experts say startup entrepreneurs see opportunity, and wealthy investors see safety in the formation of de novo banks (Latin for “from the beginning). New banks begin with a “clean slate,” i.e., without certain suspect loans that may have been affected by the housing slump, experts say.

Also, experienced bankers such as those involved in the Emergent-Mercantile Commercial deal have a good shot at capturing market share, said Randy O. Burden, a veteran banking entrepreneur and consulting executive for M&I Bank in Central Florida.

“They’re basically taking a commercial finance company and turning it into a bank. It’s an approach I’ve heard of before but not around here,” he said. “It does make sense, though. They’ll immediately have a book of business and that should help them come out of the box right away in good shape.”
Mercantile Commercial’s loan volume and revenues have grown at a double-digit pace in recent years, and the demand for small-business financing remains strong, according to Longstaff. But in the nation’s current credit crunch, meeting that demand has become a major challenge.

“Funding sources for the loans have been increasingly difficult to find,” Long-staff said. “We knew we either had to go to Wall Street to raise money or form a community bank to create funding for the loan growth.”
Company officials chose the familiar option of banking over the uncertainty of Wall Street, he said.

Longstaff is a longtime Central Florida banker and former executive with Regions Bank and First National Bank of Central Florida, among others. Developer Shannon Marks, a well-known local banker in the past, will be president of Emergent. Christopher Hurn, Mercantile Commercial’s CEO, will be executive vice president of the new bank.

Organizers are recruiting other local community bankers to join the new team.

“This bank will acquire an operating business with a very successful five-year track record,” said Jack Greeley, an Orlando banking lawyer who represents the organizers. “This type of small-business lending is very consistent with what community banks historically provide to their markets.”

Richard Burnett can be reached at rburnett@ orlandosentinel.com or 407-420-5256.

Lender files papers to start up bank based in Winter ParkOrlando Sentinel- March 14, 2008

Mercantile Commercial Capital Starts its Own Bank

Orlando SBA lender already has $21M committed toward its $37M goal.

by Tiffany beck | StAff WRiteR

Mercantile Commercial Capital is submitting an application this week to start up Emergent National Bank.

The new community bank will open its headquarters in 16,000 square feet at 501 N. New York Ave. in Winter Park in the fall. The location also will house Orlando-based Mercantile Commercial Capital, which will retain its name and become a division within the bank.

Emergent National Bank plans to raise $37 million in initial capital, of which $20 million to $28 million will be cash. That process will begin formally in the second quarter, but the bank already has soft commitments of about $21 million.

About $9 million will be raised through the acquisition of Mercantile Commercial Capital. Mercantile’s current investors will receive $9 million in bank stock and $2 million in cash as part of that transaction.

“The fact that we have no problem raising capital is a testament to our business plan,” says Chris Hurn, president and CEO of Mercantile Commercial Capital.

The bank plans to have five locations within three years of launch, says Hurn.

The combined companies will start out with 30-plus employees.

Premier Small Business Bank
Five-year-old Mercantile Commercial Capital, which specializes in Small Business Administration 504 loans to small and midsize businesses, decided to start a bank after realizing it refers many of its customers to area community banks for other financial services.

In addition, creating the bank will help the SBA lender become more profitable through funding loans with deposits rather than through commercial warehouse lenders. Warehouse lenders provide interim financing until a mortgage is sold to a permanent investor.

The goal is to position Emergent National as the premier small business bank, says Shannon Marks, who will be president and CEO of the new bank.

Emergent National Bank primarily will serve Orange, Seminole and Lake counties, but also will provide some banking services to clients nationwide, as well, he says.

“[Mercantile Commercial’s] business is compatible with what community banks do,” says Jack Greeley, an attorney with Smith Mackinnon PA who is working with the new bank on its startup plans.

Key Positions Filled
Eight directors currently have signed on to be part of Emergent National Bank. The primary positions will be filled by:
• G. Geoffrey Longstaff, who will serve as chairman. He’s chairman and a co-founder of Mercantile Commercial Capital. He is also a principal of Small Bay Partners LLC and the president of NAI Realvest Partners’ title company, Corporate Title Services LLC. Longstaff has more than 27 years of banking experience in Central Florida, including founding First Mercantile National Bank, which sold to Regions Bank in 1997.

• Marks, the new bank’s president, also owns Shannon D. Marks & Associates LLC, a real estate development company. He has 19 years of banking experience, most recently as senior MARKS vice president, senior lender and manager of commercial lending and residential real estate lending at First National Bank of Central Florida.

• Hurn, who co-founded Mercantile Commercial Capital, will serve as executive vice president of the bank. “We’re all entrepreneurs, and that resonates with our core our core clientele.” he says.

And while most new banks take at least three years to become profitable,
Longstaff believes Emergent National Bank will be profitable in two, thanks to being a “product of success” with ties to Mercantile Commercial Capital.

In fact, that ability to start off with an existing client base should help grow the new bank, says Rod Jones, a partner in Shutts & Bowen LLP in Orlando who specializes in bank regulatory matters, but does not represent Emergent. “New community banks rely heavily on pre-existing relationships with customers, and on their directors and investors to bring in business to a new bank,” Jones says.

Tiffany Beck can be reached at (407) 241-2894 or via e-mail at tbeck@bizjournals.com.

Mercantile Commercial Capital Starts its Own BankOrlando Business Journal- March 14, 2008

info@mercantilecc.com

Phone: 407.786.5040
Toll Free: 1.866.622.4504
Fax: 407.682.1632

info@mercantilecc.com

Phone: 407.786.5040
Toll Free: 1.866.622.4504
Fax: 407.682.1632

info@mercantilecc.com

Phone: 407.786.5040
Toll Free: 1.866.622.4504
Fax: 407.682.1632

World Headquarters (Orlando)
Mercantile Commercial Capital, LLC
940 Centre Circle, Suite 3006
Altamonte Springs, FL 32714

info@mercantilecc.com

Phone: 407.786.5040
Toll Free: 1.866.622.4504
Fax: 407.682.1632

Christopher G. Hurn, president and chief executive officer of Mercantile Commercial Capital, said the event celebrated more than his company’s meteoric growth—participants contributed more than $6,500 for the Florida Hospital Foundation.

It was a panel of misfits: four guys who couldn’t stand working for someone else and were arrogant enough to think they knew a better way to build both a business and a workplace.

But here’s the rub: The four Florida businessmen who spoke Wednesday to a sold-out audience of 140 people at the University of Tampa were right. Their companies’ revenues have grown from 900 to more than 2,600 percent over the past three years, earning them a place on Inc. magazine’s 2007 list of the nation’s fastest-growing businesses.

Marcus Adolfsson, 26, is the president and founder of Smartphone Experts, the company ringing up the highest growth rate of the group. He started the business in his dorm room at the University of Florida in 2002, selling Treos and accessories online. The self-described gadget freak now runs a $20-million retail business based in Inverness.

Brian Blackburn, 53, was looking for fun when he started Xymogen, a nutraceuticals distributor in Orlando in 2002. “We’re dedicated to each other first, the customer comes second,” he said of his work force of 62. “It’s amazing the talent we attract.”

Though each of the speakers at the event sponsored by UT’s Florida Entrepreneur and Family Business Center exuded confidence, it didn’t take much scratching beneath the surface for the nerves to appear. Robert Byrne, 46, had worked in venture capital and telecommunications when he realized there was a market for someone to service retailers and cell towers’ giant power generators. So he hung a shingle out of a home office and began pounding on doors. His Maitland company, Power Pro-Tech Services, soon won such “elephant” accounts as Publix and AT&T, but the money didn’t come as quickly. “I spent many a day looking down the barrel of a gun,” he said of pressure from creditors early on. “I broke all the rules.”

Chris Hurn, 35, started a company making real estate loans to small-business owners. His first criteria for employees of Mercantile Commercial Capital in Altamonte Springs: no banking experience. “I didn’t want the baggage,” he said.

Hurn advised would-be entrepreneurs to do likewise. “Be like the Vikings, who burned their boats behind them,” he said. “You have to believe in your business 100 percent. Failure is not an option.”

©2007 * All Rights Reserved * St. Petersburg Times
490 First Avenue South * St. Petersburg, FL 33701 * 727-893-8111

02/28/2008

Startup CEOs Reveal Success Secrets St. Pete Times- 02/08

SBA Lending may Increase and Loans Closed in 2007 Orlando Business Journal- 02/08

MCC’s 5th Anniversary and Loans Closed 2007 Orlando Business Journal- 02/08

Mercantile sees more loans, offices in 2007

ALTAMONTE SPRINGS – Mercantile Commercial Capital LLC reported its 2007 commercial loan volume was up more than 22% over 2006.

The firm closed on 47 commercial loans that totaled more than $101 million from Jan. 1 through Nov. 30. Mercantile’s SBA 504 loans have helped create 761 new jobs.

In 2006, Mercantile Commercial Capital launched a major expansion of its correspondent program. In 2007, Mercantile Commercial Capital added 14 correspondent office, including Seattle, San Antonio, Wichita, Phoenix, Sacramento, Dallas, St. Louis and Cape Cod. The firm now boasts 32 correspondent office nationwide.

MCC Reports 2007 Commercial Loan Volume Up Florida Real Estate Journal- 02/08

Altamonte Springs – Mercantile Commercial Capital, LLC recently closed on nine commercial loans for projects worth more than $23.7 million. Mercantile specializes in Small Business Administration 504 loans to small business owners who want to acquire or own facilities.

Mercantile Commercial Capital’s Recently Closed Loans Connect Magazine- 02/08

What Business Are You In?
Lending, or Marketing the SBA 504 Loan

KEY WEST, January 17 – It’s not often that change agents – especially effective change agents – come along to entrenched industries like SBA commercial loans. “You have to answer the question of what business you are really in,” Chris Hurn challenged the executive SBA lenders attending Coleman’s Executive Management Retreat in Key West.

Hurn, the president and CEO of Mercantile Commercial Capital, discussed the factors behind the numbers – 189 SBA 504 loans worth $303 million – in less than five years.

“I’m not in the commercial real estate lending business. I’m in the business of advertising, marketing and selling commercial real estate loans.”

Quoting Michael Gerber’s The E-Myth, Hurn said, “The first quantum leap occurs when you decide you are not in your business, but in the business of marketing your business.”

“The second quantum leap is to say to yourself – since that is the business I’m really in, whether that was my intent or not, I’d better focus on it, and I’d better get good at it!”

“I spend 85% of my time thinking about marketing,” he told the group.

“Oh, I know how to do the other stuff, I have expertise – but underwriting and administrative tasks are just not the most effective use of my time. I hire other people to do those things.”

With a string of honors to his credit, including being named the Orlando Business Journal’s “Most Respected Executive in Central Florida,” “Top Ten Most Influential Men to Watch” and Coleman Publishing’s “2007 Marketing Guru of the Year,” Hurn has guided his Inc. 500 company to a position of prominence as a leading SBA 504 lender.

Ignoring the BDO Model

When the discussion turned to how the company generates its loans – in other words its income – heads turned as Hurn announced, “We don’t use business development officers – 100% of our business is marketing driven.”

This model eliminates the things business owners, entrepreneurs and sales professionals hate:
• Cold-call grunt work
• Wasting time with prospects who cannot buy or will not buy now
• Price resistance and objections
• Rejection

Targeted Marketing

The solution?

Narrow, precision-targeted marketing that offers immediate quantifiable returns.

“Unless you are a major company like UPS Capital, it doesn’t make sense to use branding type campaigns.”

“I want an identifiable return on every marketing campaign – I want to see deal flow from it” Hurn said.

Each month Mercantile produces a glossy 16-page newsletter full of borrower success stories and campy slogans.

And it works. The 70,000-piece mailing, at a cost of $50,000, generates immediate deal flow – between two and four deals a month – a nice return on investment.

Examples of Past Targeted Marketing Campaigns
• Celebrity Voice Broadcasts (Santa Claus, Leprechaun)
• Hollywood Themed Postcards (DaVinci 504 Code, 24 hours)
• Holiday Cards
• Advertorials
• Email
• Fax
• Public Relations
• Direct Mail
• Unique Direct Mail Products – Prescription Bottles, Bank Deposit Bags, Tubes

So, How Do We Do It?!?

1. Identify a small, manageable number/group of good referral prospects and sources (Market).
2. Design a “story” and an offer attractive to them (Message).
3. Put those in front of them repeatedly over a short period of time using direct mail and other types of “touches” (Media).
4. Continue to “drip” on them until they buy, die or beg to be left alone.

Market more comprehensively and intensely to a smaller, more select number so you can have a real impact . . . instead of spitting in the ocean.

From Annoying Pest to Welcome Guest
Permission Marketing
Push vs. Pull Marketing
Pursuit vs. Attraction Marketing
Positioning, Not Prospecting

. . . all ways of saying the same thing.

Attempting to force yourself on disinterested people is an ugly, unpleasant, uphill battle.

It is better to ATTRACT an already INTERESTED prospect who INVITES you to sell to him.

This is why we don’t cold call - - we take inbound calls only. It’s also why we really haven’t had dedicated external loan officers “pounding the pavement” . . . YET we’ve closed more commercial loans in 53 months than most brokers/loan officers/bankers close in 10 years.

How Mercantile Commercial Capital Does Business
Ignoring the Traditional BDO Model

Coleman: What is Mercantile Commercial Capital?

Hurn: We’re predominately a 504 lender. We like to think of ourselves as the nation’s experts at providing 504 financing for small business owners and entrepreneurs. We always lead with the 504 loan.

Coleman: How do you get your business?

Hurn: One of our methods is to work with brokers throughout the country. We call it our Area Correspondent Exclusives or ACE for short. It’s our way of creating a nationwide network of correspondents.

Coleman: And a correspondent is?

Hurn: A correspondent is someone who represents us – Mercantile Commercial Capital – in a geographic area.

Coleman: Exclusively?

Hurn: Exclusively.

Coleman: What type of person are you looking for to be an ACE Correspondent?

Hurn: The program is only about a year old. We have about 30 correspondents representing us around the country. There are another 130 areas around the country that I’ve carved out where we’d like to put people.

Historically, it’s been residential mortgage brokers trying to get into commercial mortgages – which I know a lot of people aren’t in favor of. But my feeling is that these folks have had a tough time on the residential side for the last 18 months or so and at least they’re smart enough to realize they can’t just keep doing what they’ve always done.

We train them extensively in all our programs, and we have ongoing training, monthly and weekly.

They’re basically our eyes and ears selling in their areas. We take everything else off them – the back office work, we do all the underwriting, the funding and the closings.

We do all the marketing for them as well, so they’re really just our representatives out in their geographic territories selling the products we have.

Coleman: How much SBA experience do they need to have?

Hurn: Quite frankly, we’d prefer that they don’t have any.

Having said that, I think the reason we’re having this conversation is that there are a lot of SBA lenders who have been in the industry for a long time, and who are going to see their compensation plans cut within the next year or two.

Coleman: How much work does an ACE have to do to give you a referral?

Hurn: Some of that depends on their experience.

If you’re an SBA/BDO working for some bank and you’ve done this for a while, you’re going to know how to look at cash flows and determine if it is a deal that will fit within our parameters.

If you’re a residential mortgage broker and you’ve never done a commercial deal at all, the first few times you’ll probably want to have a conference call with one of our staff members and your customer.

Usually all we like to do up front is take a name and a number from you, and we take it and run with it.

We’ve closed loans in 26 states around the country.

In 25 of those states we’ve never met the borrower, and that’s because we are extraordinarily competent working by phone, FAX, and email – we’ve proven ourselves – even with distance with our prospects and clients.

Coleman: You also say your company is a little bit different: you lead with 504s. Do you do any 7(a) at all?

Hurn: No, no 7(a) at all. We refer all the 7(a)s out.

We do this because it’s easier to sell 504 as the best program – there aren’t any conflicts with us.

Coleman: Now the key thing on this that will get some people’s attention is compensation. Tell me about that.

Hurn: Our play is not as a portfolio lender. We sell to the secondary market. We take all the premium income we earn and put it into a pool that we split with our ACEs.

The ACE gets 40% of the premium income for the first tier of sales volume. With the second tier they get 50% of the premium income. And they’re fairly reasonable tiers – up to $2 million for the first tier, and $4 million for the second tier.

In most cases a current SBA lending BDO will double or triple their income if they become an ACE for us.

Coleman: On an average sized deal, with competitive pricing, how much would the ACE make?

Hurn: Our average deal is an $858,000 loan which earns us a little over $54,000 in total compensation.

A 40% piece of that would earn you about $22,000 and up to $26,000 depending upon where you are in the volume tier.

Coleman: In the rest of the market the premiums have been decreasing; how can you say premiums are increasing for you?

Hurn: Quite frankly, because we’re the best at what we do.

We know how to sell. And, we train our ACEs how to sell.

Coleman: Talk to me about territories. How do you structure that? Do your correspondents compete with each other?

Hurn: No, we protect the territories.

The way I break up the territories is by making each territory at least a million people with at least 20,000 small to mid-sized businesses that meet our parameters.

To give you an example, Chicago has three territories. Philadelphia has 3 areas. Montana would be one area, naturally. Idaho has one.

You can extrapolate from there.

For more information go to www.ace-report.com.
Chris Hurn can be reached at churn@mercantilecc.com.

©2008 All Rights Reserved by Coleman (818) 790-4591

Mercantile Commercial Capital Featured in Coleman Report Coleman Report- 01/08

Marketing Associate Appointed Orlando Sentinel- 01/08

Specifically, Hurn indicates that the current bills before the U.S. Congress (H.R. 1332, S. 1256 and S. 2612) would exacerbate the existing problem of competition between the SBA’s two primary lending programs for small businesses. As it currently stands, private sector banks and lenders prefer to offer SBA 7(a) program loans over the agency’s 504 program loans because they can earn larger profits and fees with the 7(a). The current bills would make this profit disparity between the two loan programs even greater, so lenders will be less likely to recommend the 504 over the 7(a) even for commercial real estate acquisitions, for which the 504 was created to offer borrowers significantly better terms and rates than the 7(a).

“I’m writing Sen. John Kerry and the other congressional leaders behind the current bills to recommend a different set of reforms focusing on eliminating the competition between the SBA’s two largest lending programs,” said Hurn. “These reforms would entail making the 504 loan program the exclusive option for commercial real estate loans from the agency and enabling 504 loans to be offered for the refinancing of commercial property loans.”
According to Hurn, the 504 loan program is the most efficient job-creation program that the SBA offers, but it remains underutilized.

Hurn indicates that the reforms he proposes would boost the U.S. economy by helping small businesses to grow and add jobs without the creation of new programs or allocation of additional federal funds. He also believes that the changes would complement the recently enacted small business economic stimulus measures that allow investments in tangible property by businesses to be more speedily depreciated.

“With the declines in the housing market, small-business owners are now considering investments in commercial property for their businesses as opposed to risky investments in residential real estate,” said Hurn. “The changes that I suggest for the 504 loan program will work in conjunction with the recent tax breaks to create incentives for small businesses to acquire or develop their own facilities.”

Hurn also points out that allowing businesses to refinance their existing commercial property loan with a 504 loan would give thousands of businesses a new option that could significantly lower their monthly property payment, which would enable many to hire more employees or invest in growing their enterprise.

The 504 loan program is the primary economic-development and job-creation program of the SBA. The portion of each 504 loan funded by the government represents the least expensive financing option that is available for businesses.

Recently named to the Inc. 500 list of America’s Fastest Growing Companies, Mercantile Commercial Capital has been called the “Fastest Growing Commercial Lender in America,” the “most unique and entrepreneurial bankers around,” and the “fun bankers.” From its start in 2003, MCC has focused on providing SBA 504 loans for small business owners to acquire or enhance their own facilities. The company was named “Best Place to Work” by the Orlando Business Journal in 2005, 2006 and 2007.
Additional information on MCC and its loan offerings is available at www.504Experts.com or by calling (866) 622-4504 (toll free).

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