IAM2119 – CEO Offers Business Funding Solutions to Small Business Owners

In this episode, we have Alex Shvarts, CEO of FundKite, a leading fintech funding platform serving over 200,000 small businesses across the country. Fundkite offers business funding solutions and has provided over 900 million in funding for small businesses.

Alex emphasized the human element in business and the importance of reading others' body language to make smart decisions with money.

He also shares his secret for success, which involves passion, knowledge, and the ability to quickly adapt to changes in the business landscape.

The conversation highlights the importance of understanding the team, controlling the narrative, and making work a fun environment.

Website: FundKite
LinkedIn: Alex Shvarts

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Full Interview:

Transcription:

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Alex Shvarts Teaser 00:00

I think where the difference between us and how we approach it. But we speak to every business owner. We want to understand what do they need the capital for? What are they going to do with it? How are they operating the business? It is a little time consuming, but we've got the process down. We can find the business as fast as the merchant or the business owner provides us the information we need. There's a really big human element in all of this.

Intro 00:27

Are you ready to hear business stories and learn effective ways to build relationships, generate sales, and level up your business from awesome CEOs, entrepreneurs, and founders without listening to a long, long, long interview? If so, you've come to the right place. Gresh values your time and is ready to share with you the valuable info you're in search of. This is the I AM CEO Podcast.

Gresham Harkless 00:54

Hello, Hello, Hello. This is Gresh from the I AM CEO Podcast and I have a very special guest on the show today. I have Alex Shvarts. Alex, excited to have you on the show.

Alex Shvarts 01:02

Thank you so much, good morning.

Gresham Harkless 01:03

Yes, absolutely excited to have you on and talk about all the awesome things that you're doing. And of course, before we do that, I have to read a little bit more about Alex so you can hear about some of those awesome things. And Alex is the CEO of FundKite, a leading fintech funding platform serving over 200,000 small businesses across the country. FundKite offers business funding solutions across a variety of industries and has a pulse on the small business needs, capital needs and amid an uncertain economic outlook. And FundKite, I was reading, takes pride in their straightforward, transparent approach that considers businesses big picture, not just their credit score. And one of the really cool things I saw that they've offered over 900 million in funding for small businesses across the nation.

And one of the really cool quotes I read from Alex is he said, business is never just about business. It's a people game. You need to be able to read others in their body language if you want to make smart decisions with your money. If you're considering investing in business, look beyond the company and into the industry and their employees. So Alex, excited to have you on the show. Are you ready to speak to the I AM CEO community?

Alex Shvarts 02:09

Absolutely.

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Gresham Harkless 02:10

Awesome. Let's get it started then. So to kick everything off, let's rewind the clock a little bit. Here a little bit more on how you got started, what I call your CEO story.

Alex Shvarts 02:13

Oh, so we, a few friends, we saw a really unique opportunity, going to be, I think, 9 years next month. We saw a unique opportunity where a new segment of the funding industry started to develop, which was called revenue-based finance. And we saw an opportunity for 2222 fold opportunity. One as a serial entrepreneur, there's always been this challenge of trying to get funding from a bank, getting a loan from a bank, it's hard, it's tough. So there was this new segment where it wasn't a bank loan and it involved tax to provide business funding, right, to small and medium-sized businesses.

And second, as any entrepreneur, you want to get into something with the hope of making money, right? So it was a two-fold thing, solving a problem, helping others, and while doing that, being able to make money doing it for simple terms, right? The industry, it's important to understand what we do and I'd like to get into it quickly. So what we do is, it's called revenue-based finance and we purchase a business's future account receivables. They're receivables, so they're future sales, right? And we provide a lump sum of money today to the business owner, and we're gonna collect the receivables we purchased over a period of time.

And the way that we collect those receivables that we purchased is based on the sales, right? So as the business generates sales, a portion of those sales will be remitted to us until we collect the receivables we purchased. Right. Now, how do we do that? That's important. We look at business cash flow. How does one operate a business? That's the most important thing to us. Right. So we don't work with startups because there's no historical sales. So we require at least 6 months in business. We're going to go through your bank statements, look at your cash flow. That's the most important thing to us. So how do you generate sales? How long you're in business? What industry you're in?

There are certain industries that are restricted for us because of the followed, but so we'll look at that credit is not important. It's not a deciding factor to us, right? So do look at some credit factors. That's not going to make our decision. In fact, most of the people that apply to us have sub-credit. It could be below 600 or around that range. And why do they come to us is because banks are purely credit driven, right? First of all, let's agree on one thing. I'm a little older than you, Gresham. And I remember a time when you knew your banker, right? Like you walk into your bank, good morning, Alex, how are you? And bankers were relationship driven, right? Today, bankers are banks are mostly run and operated by a much younger generation. They're not relationship driven. They're bookworms, right?

And they've been taught that you need to have this, this, this, and this, and there's a bunch of algorithms. It's like a credit card. You go and apply for a credit card. You put your information in, there's an algorithm. It spits out your approved for your decline and it's approved for how much. So that's all credit driven. That's not how you can underwrite or provide capital for a business. First, you got to look at the cash flow, how they operate in the business. We speak to every business owner. We want to understand what do they need the capital for? What are they going to do with it? How are they operating the business? It is a little time consuming, but we've got the process down. We can fund the business as fast as the merchant or the business owner provides us the information we need. There's a really big human element in all of this.

Gresham Harkless 05:56

Yeah, I appreciate you expounding upon that. I was going to ask you a little bit more about what I call your secret sauce could be for yourself individually, the business or a combination of both.

Alex Shvarts 06:04

Yes. So look, the passion is important. Knowledge is very important and then really breaking it down. To this day, we have a lot of employees here and developers and programmers, but to this day I'm very much involved in all of our algorithms and how we put this together to be able to review these applications much faster. I still write code every day and I'm very active with them. I'm one of those CEOs that gets in and first I'll go make the coffee in the kitchen, mop the floors, and I still do all of that. That hasn't changed. The secret sauce for me is having my pulse on what we do, interacting with every team member, department heads, and really being involved. And to this day, there's so many merchants that I will get on the phone to speak with their underwriting department.

My secret sauce is not giving up, just constantly at it, trial and error, keep looking at, okay, if something didn't work, why didn't it work? Trying to figure things out. While I rely on other people, I need to understand why. I ask the questions. I have these, I'm constantly talking to myself, right? What am I missing here? And research and stuff like that. So I am reading a lot of books now, but only because it's my leisure. I don't believe that at my stage and where I am, the books are going to give me the guidance that I need. It's more of what we're doing that's guiding me every step of the way.

Gresham Harkless 07:32

Yeah, that makes so much sense. So aligned into what you were talking about, I call it the CEO hack, which is the habit or book or software, whatever you lean on to make it more effective and efficient.

Alex Shvarts 07:43

So I will tell you what my, probably a part of my secret sauce is, it's the ability to quickly adapt to what's going on right now, right? The ability to change when I need to change and refold. And that's something that business owners need to do because you're not just making that cup of coffee. You're dealing with customers, quiet chain, the landlord, insurance companies, oh my God, I have no more sweets, the ability, and using a coffee shop, it's not easy to have a successful coffee shop, right? It's not like you're just pouring coffee, right? And the same way, let me go back a step. Let's talk about restaurants, right? People don't often understand the importance of busboys and waiters to me, they are just as important as the chef making the meal, right? I treat them equally with the same respect as I treat the chef. Why? Because that guy, man, if he brings that food 10 minutes later, it's cold. Don't matter how good the chef was, you're going to hate the food, right?

Every piece of a restaurant, the people that greet you at the front door and tell you goodbye, right? It's all of this really big puzzle to make it work. And that's in every business. That's how many experiences we had where we go to a business just because they're successful, they're obnoxious and rude or some really happening restaurant that you can't get a reservation and they're obnoxious. I've seen those fail. You can only ride that wave for so long before people get really, people remember. We have memories, right? You do wrong. We're going to remember, we're not going to come back to your place. And that's hard customer service for entrepreneurs because you're managing all these things to still have a smile and be happy every day. And that I try to do. Like I always jump around with my team. I goof around and try to lighten up the day because man, it gets intense.

Gresham Harkless 09:37

Yeah, let me ask you this because that made me think about, we call it a CEO nugget, which is a piece of advice you might give to a client. But I want to ask you from the time machine perspective, if you were to hop into a time machine, what might you tell your younger business self? What piece of advice would you say this is the thing that you should know?

Alex Shvarts 09:56

It's the knowledge. So I had to acquire a lot of this knowledge hands on. So time machine, go back to school and go to college and take that time. Cause I felt like I got to get into business and hustle and make money and going to be a roadblock. Why am I going to waste 4 years going back? I wish I did that. So I had to learn that. I had to learn all those things the hard way, right? I look I talk to people all the time that I consider way way smarter than me more knowledgeable professors Finance people and I pick their brain and I listen I ask a question I listen man. Sometimes they use words I don't even understand. Like I have to go home later and like, what the hell is that word? I gotta Google it. So that's part of the time machine. The other thing, the time machine I do wanna say is that if I look back, I should have spent more time trying to enjoy life.

So to have sanity as a good entrepreneur, you have to have balance. We get caught up in our everyday hustle and we don't spend enough time balancing it out. And I'm trying to do more and more of this now. When you're 55 and like, my God, less 30 years, I identify as a workaholic. I mean, you miss out on a lot. And so success, in the end, you're going to look at success, and it's not just going to be about what you did in business. It's going to be, I successfully climbed a hill. I successfully did 20 miles on a bike in 30 minutes. Things that, those are, I think they're important. So balance. I tell entrepreneurs, just, man, your mind's always going, I got to do this, I got to do that. Balance. Take care of yourself. Be kind. If you need some TLC, and you got to give yourself some deals, right?

Gresham Harkless 11:45

Yeah, nobody our families try my family's always dead like my wife do this relax do this no, no, I got it Saturday I'm on the office 08:00 in the morning. And Saturdays and Sundays are good days for me because most of the staff is not here so I can do things uninterrupted but yeah take care of yourself take care you know be hard on yourself but also pat yourself from the back sometimes, yeah that's powerful so let me ask you now my absolute favorite question the definition what it means to be a CEO. And our goals are different quote unquote CEOs on the show. So Alex, what does being a CEO mean to you?

Alex Shvarts 12:20

Most important, be able to understand the team you've built, right? You're only as good as your team. So build the team that you need, not always build the team that you want. Understand the team, listen to them, be able to control the narrative of the company where you're trying to go. Have fun, make it fun, make work also a fun environment. Yeah, that's probably where I do well with my team. Make it easier for them to come to me. But listen, there are times when I need to kick ass because that's what we CEOs do because we're thinking about everybody's livelihoods here, right? Whereas an employee is only thinking about so yeah, enjoy what you do. Being a good CEO means you got to enjoy what to do. I don't look, I don't wear any badges. CEO means nothing. It's just that title means you gotta, I gotta find the right way to break down CEO, right?

Because it's not cheap executive officer. It's more you're a slave to this company, right? You really are. Because you've got so much on your shoulders. You have to look out for employees, for your product, for everything that you do. And so look, I know some CEOs that work 6, 8 hours a week, and because I guess they've been able to build a company to that point where it's a title only. I'm a very involved, day-to-day active operative, so it's my thing. And I don't know how you can run a company not doing that. I don't know. Even though the bigger you get, you get really good people that like take on these things. But still, if you, especially in finance or in any business, the minute you start to take your hand off the pulse and chill a little too much, you start to really get chilled out, right?

So I think you have to, as a good CEO, you have to be involved and your hand on the pulse and stay with it. And look, the bigger the company grows, the more problems you have, right? The more tasks, the more departments that it's hard to keep track of it. So having a good team, trust your team, build a team you trust, hire people you can afford, but hire people that really understand what they're doing. Interviews don't mean anything, right? In every interview, everybody's great and you hire them and 2 weeks later, what the hell did I do?

So spend more time getting to know the person you're trying to hire as opposed to how great there's like a lot of gimmicks and interviews that people can do fly colors in the interview, right? So you gotta remember that. Why is this person looking for a job? Look, people do get laid off. Things happen. I'm not saying every interview is a bad interview, but identify that the person you're interviewing is really here for the right reason, right?

Gresham Harkless 15:27

Yeah, that makes a lot of sense. Alex, truly appreciate that definition. Of course, I appreciate your time even more. So what I want to do now is pass you the mic, so to speak, just to see if there's anything additional that you can let our readers and listeners know. And of course, how best we can get a hold of you, find out all the awesome things you and your team are working on.

Alex Shvarts 15:42

Yeah. So our company is called FundKite. FundKite.com. You're welcome to go take a look there. I try to keep my Instagram personal, so I don't have an Instagram, but it's private. So I hope all your dreams, whoever's listening, I hope all your dreams come true, even if you fall a lot of times on loop.

Gresham Harkless 16:00

Absolutely, well, I truly appreciate that, Alex. Of course, to make everything easier, we're having links and information in the show notes as well too, so that everybody can follow up with you, find out about all the awesome things your team are working on, if they need funding, any of those things as well too. So thank you so much for fueling so many of those dreams and giving us so much information and knowledge today.

Alex Shvarts 16:17

Thank you so much for the opportunity.

Outro 16:19

Thank you for listening to the I AM CEO Podcast powered by CBNation and Blue16 Media. Tune in next time and visit us at iamceo.co. I AM CEO is not just a phrase, it's a community. Be sure to follow us on social media and subscribe to our podcast on Apple Podcast, Spotify, Google Podcast, and everywhere you listen to podcasts. Subscribe and leave us a 5-star rating. This has been the I AM CEO Podcast with Gresham Harkless, Jr. Thank you for listening.

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