C Michael Exteriors is a family-owned home improvement contracting business run by Bill and Cyndy Bergmann in Missouri. They have a long history in the industry and are dedicated to running their business the right way. Sarah (Marketing) and Tim (Sales) from Medallion Bank sat down with them to discuss their business history, their experience with financing (in good times and bad), and what sets them apart from their competitors.
Sarah: We’d love to hear more about your tenure in the industry, how you sell financing, and how you view us as a financing partner. Can you both tell us a little more about the history of C Michael and how you got into the business?
Bill: Well, we were in the pool business most of my adult life. But when 2008 came around, all of the financing for above-ground pools died. We made the conversion to home improvement primarily because we had a lot of contacts with home improvement companies, and felt we did enough of the business to make the transition, and you know—made the transition.
Tim: Sales financing – not only a critical element in your pool sales but also in your home improvement sales?
Bill: Without it, we wouldn’t be in business.
Tim: Back in the day, were you doing any indirect secured lending?
Bill: We were doing some. I would have to say that, by the time it ended, most of the lending was unsecured, but we still had 1-2 banks that we did some secured lending with.
Tim: Nowadays, there a ton of folks out there charging 5, 10, 15 percent plus for your prime credit deals to get bought. Back in the day, as opposed to paying a discount on your finance business, was it more of a case of looking for participation if at all possible?
Bill: Certainly things have completely turned upside down. Going back in the day (if you would), banks would come to us and basically offer all kinds of spiffs to get our business. Nowadays, it’s turned out where we’re lucky to have financing that we can use.
Sarah: On that note, can you talk a little more about the importance of sustainability in your lenders? What was the experience like when, as you say, a lot of the financing companies up-and-left when 2008 hit? What was the impact of that on your business?
Bill: Well, it ended it. We made one strong attempt to limp along with a couple of frankly half-baked banks that couldn’t really do the job and finally realized that the ship was sinking, put our life jackets on, and dove in the water. Scary times, to answer your question.
Sarah: What percentage of your business at that time was financed, and has that changed at all, going through that experience where you had to basically move on from your business since your financing sources dried up?
Bill: In the above-ground pool business, something like 90% of our business was financed. In the home improvement business, I would say the percentage is more like 65-70%, the rest being in cash.
Tim: I don’t know if you know, but you’re still well ahead of the industry standard. 10 years ago, before the market crashed, there would have been many more people in that “65-70%” boat. It’s kind of crazy, but there are a lot of big shops out there that are well below 50%. So kudos to you guys.
Sarah: You’ve touched on a couple of changes in sales finance then vs. now, things like participation and the number of unsecured lenders in the marketplace. What are some of the other changes you’ve seen?
Bill: The dehumanization of banking. When you talk about the largest players in the market, you might as well be talking to a computer there. You really have no significant appeal process or discussion about any business. They are unpredictable in the sense that you can’t go by credit score, you can’t go by payment history. They approve some deals that you never thought they would, and they decline others that you were certain they would approve. So it’s very, very, very difficult. I would say that Medallion is really the easiest Bank to deal with in the sense that you define your parameters very well so that we know whether or not a particular customer is a good candidate for Medallion or not. It saves us time and it saves you time also.
Sarah: So in addition to having a little more transparency around the underwriting criteria, what’s the value in actually getting to call in and speak with an underwriter who you know the name of and have a relationship with?
Cyndy: First of all, it amazes me that Medallion hasn’t put everyone else out of business. I can call at any time and they will accommodate me, whether it’s 10am or 10pm. If I need something they will literally go and grab the paperwork for me, call me back and tell me the answer directly or send me an email. I have never in my life worked with any group of people that are as nice and easy to work with as the people at Medallion Bank.
Sarah: Thank you so much. There’s a real comradery here – we do have a smaller team, so our funding, underwriting, and customer service people are constantly communicating. Everyone is sitting on the same floor, and I think that allows for what you, Cyndy, really appreciate – those really quick answers. As soon as you’re on hold, you’re not just sitting on hold while the computer is thinking. You’re sitting on hold while everyone is interacting with each other and figuring out what we need to do to get the answer you need.
Cyndy: And you always do make it right for us. Always.
Tim: You are a family-owned business. Does each one of you wear multiple hats during the course of a work day and work week? Bill, aside from running the ship, what kinds of things do you do that might surprise someone?
Bill: Well, tomorrow I’m doing some work on one of our current jobs. In other words, I’m a hands-on guy and I expedite some of the jobs, talk with the customers, work with the salesmen – I don’t think any of that is particularly surprising.
Cyndy: And he also drives the canvasses around at night. We both work 10-12 hour days. In addition to all of the financing, I also work our lead room & all of the shows & fairs.
Tune in next week for PART TWO of this interview with Bill & Cyndy!