Uncle Sam's Secret Sauce
Uncle Sam's Secret Sauce

Episode · 4 days ago

Carving Your Own Path as a Business Owner with Chris Hurn


Chris Hurn is the Founder and CEO of Fountainhead, one of out only 14 non-bank direct commercial lending firms licensed by the SBA. Fountainhead’s leadership has a combined 300+ years of commercial lending experience and to date, the firm has financed over $28 billion in projects.

Chris joins the show to share his secret sauce for success that he has developed throughout his career journey, how he founded and led Fountainhead to massive success, even amidst the pandemic and working through labor shortages.

In this episode we discuss:

  • The need to support the entrepreneurial community
  • The importance of finding the right people and putting them in the right places
  • The limits of scaling as a one-man operation
  • How to develop an unconventional approach in your business and carve your own path

Uncle Sam’s Secret Sauce is hosted by Rafael Marrero, Founder and CEO of Rafael Marrero & Company, which helps small companies do business with the world’s biggest customer: the U.S. Federal Government.

You're listening to Uncle Sam's secret sauce, a Raphael Morrero and company podcast. This is a show for US small business owners and decision makers looking to grow their business. You're about to hear a conversation with successful entrepreneurs in the fields of construction, janitorial, cybersecurity and more. Here you'll learn how to sell to the government and what this secret ingredients are for effective marketing for small businesses. Let's get into the show and we're live with Uncle Sam's secret sauce, and today we have a very special guest. We have our good man Chris hearn, founder and CEO of Fountain head. Chris has more than twenty three years of leadership experience and commercial lending, specifically with SBA programs, and that's why he's here with us today, because our firm specializes in everything that's s b a related for government contracting in small business concerns. For those of you just tuning in, Fountain head is an nationwide non bank direct commercial lending firm. It's one of fourteen licensed nationwide by the SBA. That's a very, very prestigious designation, and Chris's firm specializes in providing growth financing for business owners and they offered S B a seven a loans, SBA five Oh four loans and most recently they were also heavily involved with the paycheck protection program loans. His firm, Fountain head has been named by the SBA of one of the top one most active SBA lenders in fiscal years one and they've also been honored as one of the SBA's preferred lending partners, P LPS, with designated approval authority. So, Chris, welcome to the show. Thanks for having you. Know, I've been inspired in following you on Linkedin and you're very active individual. You do a lot of outreach and education for small business concerns. Tell us about some of the numbers that were addressing here. How much did found to had close in terms of projects, and give us a little bit more detail and some of the metrics regarding the loans that your company has been involved? Sure. Yeah. So our leadership team has over three hundred years of commercial and the experience, most of which is in the SPA world. We've now done collectively. We addited it up a couple of months ago and we're over twenty eight billion projects that we've financed. We did just under five billion of PPP over the last two years. Almost three hundred thousand of those loans. We've closed loans in all fifty states and six territories. I'd like to think that we've almost seen it all, every possible scenario. Now that I've said that, I'm sure I'll jinx myself and we'll have some crazy thing come in tomorrow or something. But yeah, we're pretty experienced team. We love what we do. We're very passionate about it. We exist to help small businesses grow and increase prosperity for everybody. So it's pretty exciting that we have that opportunity to do that. And growth you've seen, because you are on the INC five thousand list of the fastest growing company in America for three consecutive years and you're actually the second fastest growing company in Central Florida and Orlando for that's right. Yeah, and wait till you see our numbers for this year. Fantastic, fantastic. I'm thinking we'll crack the top hundred, but we'll see. Well, your growth is our growth. We're in five hundred honorees and uh, we're recently part of eight masters. So we became officially inducted into that and we want to go ahead and grow with you because you are our partner where your partners in south Florida and working with small business concerns. So I know that you're heavily involved with advocacy on behalf of small business owners and you know your advocacy has included several stints delivering testimony to the U S Senate Committee on Small Business and Entrepreneurship as well as the House of Representative Small Business Committee. Can you tell us a little bit about that experience? Yeah, I mean it's been a little while since I've done it. I mean I think it's ten years actually, but these days I probably helped influence...

...educated never resource sort of behind the scenes. I'm sure I'll test I get at some point the future, but I know a lot of the folks on the Senate Small Business Committee staff, a number of the senators. Same on the house side. Obviously. Um, when PPP kicked off it helped that. You know, one of our two senators in Florida was the chairman of the Senate Small Business Committee, Senator Rubio. He and I have talked many, many times, including his staff, about how to do paycheck protection program loans, some of which they listened to me about, some of which they didn't, but that's okay, that's how that's how the sausage is made. But yeah, I spent a lot of time working on the legislative side of public policy, but even on the regulatory side of public policy. So I worked a lot with virtually all branches of government over the last couple of years, and you've also regularly appeared in national outlets such as the American business journals, CNBC, Bloomberg, CNN, Fox business and the Wall Street journals. So we appreciate your participation in today's podcast, bringing your expertise to small business. This concerns through Uncle Sam's secret sauce. My pleasure. Okay, so let's jump right in and talk about I want to get to know I want our listeners to know more about you, Chris Hern, the entrepreneur. Tell us about your family origins and your professional career. What makes Chris Hern Tick? It's a great question. I'm not sure I could fully answer it, but I can tell you that I've been working since I was eight. I grew up in the Midwest outside of Peoria, Illinois. Back then, I think we called it lawn maintenance business. You know, you shovel snow in the winter, you rake leaves in the fall and you cut grass in the spring and summer. But that really launched me into a bunch of different other areas. I had a t shirt business when I was in college. I started my first company back in two thousand two, so twenty years ago. My mother by I was raised by a single mom and she was a chocolate tear of all things fel okay, I know she violated every code there is because we were making it out of our house. You know, I learned a lot about sort of assembly line manufacturing. I learned a lot about sales and marketing with that experience, so that I really was working with her and that from pretty much about the same age, eight onward until I left for College. But yeah, it's just I'm very fortunate to have fallen into this role. I think it's my calling to try and help finance small businesses. It's something that now I've been doing for, as you said, twenty three years at this point. Obviously I worked for some other firms before I started out of my own. I did sell my first firm in this industry and then started up fountain head and I sold it in two thousand and ten. That my old company is called Birk Ntil. Sold it to a bank in two thousand and ten and then stuck around for almost four years and then launched fountain head in early two thousand and fifteen. Were much bigger than my first firm, but it is my second time around in the industry doing this. Well, you're crushing it, my friends, and that's for sure. Congratulations on that. You have a very, very good team and you have a good you know it. Don't start at the top, right, and no doubt you have that Midway Western work ethic which is evident. That comes across clearly. So tell us what made you strike out on your own rather than working for someone else, because someone in your capacity works very well as an individual contributor, as a member of a team, but you have the entrepreneurial vein. Since you were a kid. You worked with your mom and you were a chocolate teer or an inspiry chocolate teer with your mom. Right, I think I was a Dittrit servant, but that's great. So tell us what made you launch your own firm rather than staying working for somebody else again. What makes Chris Firm Tick? Well, I mean look in nineteen nineties seven I was recruited out of high tech startup that I worked in in northern Virginia. I'd moved there after Grad School in the DC area before that was trendy, and recruiter came reached out to me and ultimately I joined g capital, which was, at the time, I'm the largest non bank lender in...

...the world. About six months later they offered to move my wife and I to Charlotte, North Carolina, Denver, Colorado, Orlando, Florida, and I think we took two vacations when I was a kid. We drove to them. One we drove to Colorado, the other we drove to Florida, to Orlando, and I fell in love with Orlando. And I oftentimes call people like myself enlightened midwesterners. We've realized we don't want to shovel snow anymore and we want to get to where the climates much, much better and tax rates are better and you know, people are very welcoming and the economy is booming. So that's where I started. I've now been down there for twenty four years. But I mean it's just, I think, to your point. I've been in large corporations, but you know, large corporations they have some pluses and some minuses and unfortunately in the lending world one of the minuses is they are hyper fixated on concentrations of risk, oftentimes industry concentrations, and I found that to be a little frustrating when it was the financial metrics are identical on two different deals, but the second one happens to be in an industry that we're no longer very interested in for a variety of reasons that probably have nothing to do with this particular credit. To turn it down, I think, is is is a little silly, as a little short sighted, so that I got a little soured, to be honest with you. Happens all the time, I suppose, with folks have become entrepreneurs. They don't like how things are, so they want to go and change it and do it differently, and so ultimately that's what I did. I left jeep capital. I was hired away to join hell or financial, which at the time was the second largest non bank lender of the world, and then, of course, g bought them and I used to joke with my old boss. All you had to do was get rid of the salary cap. You know, I would have been a lot cheaper than spending billions of dollars by Howard, but regardless. So I was there for a little bit. Then I left and I was a management consultant for a couple of years and frankly, I had kind of a life changing event which probably could have shocked you or some of the listeners. Nine eleven happened and my baby girl had just been born eleven days before that, and so I was not traveling. My wife had told me I couldn't travel in her last trimester. At the time. I was working for Marsha mclinton as a consultant doing insurance capital credit enhancements and I was supposed to have been in a tower one. It kind of shook me to my core a little bit. It's a really rough few days watching all that tragedy and holding my daughter and thinking about what I want to do and and ultimately I decided I wanted to be in control. I didn't want to be, you know, at the whims of some grizzled chief cred officer who remembers the deal that went bad in nineteen seventy seven and therefore, you know, has implications to the day. So yeah, I I kind of used that as a springboard. I thought life is short and precious and if I'm going to do this and do it right, then there's an opportunity for you to go out and do it my way and make a name for myself, and the rest is history. Very, very powerful words, Chris, and thank you for the candor and for the direct speak. You know, sometimes you ask people these very pointed questions and they tippy toll around that. You took it head on and that's what makes you, Chris Hern, and, quite frankly, you've built a better mouse trap. Tell us what do you specialize in at Fountain Head and What Sets Fountain head aside from the rest of the pack, because I know you guys are different, but please explain it to me, Ricky. Right. So, Um, at the moment we have three core products. We do the S B a seven a, which is probably the most versatile of all the lending products that are out there. We do sp a five o four and, frankly, I'm probably one of the more well known people in that space nationally. That's how I made a name for myself in the industry. And then we have our own proprietary conventional product, which is some folks call it five o four light. It's basically just like a five o four in terms of underwriting and qualifications. We just make a loyal TV conventional loan firstly, as opposed to having we're in a debt behind us like in a five o four structure. And then, of course, you know, last couple of years during the pandemic, we...

...were a very active PPP lender. We were the sixth most active actually in twenty one. And we'll have some new, you know, line extensions, product line extensions that we're going to announce later this year, also spa related, but allowing us to help additional small business owners, you know, for situations that are beyond just our three core low programs. But that's what we do, what makes us different. I used to call it the three SS Raphael, but now I'm up to four S is, and basically it's speed, service, specialization and sincerity. That's my fourth s and what I mean by that is, you know, in the financial services industry, specifically commercial lending, most lenders are not exactly known for their speed and it's something that's become a hallmark of ours. We try to decision loans usually within twenty four to thirty six hours, which is lightning fast in our space, and we're trying to get faster. We're not going to rest on our laurels. We're trying to expedite it even more service. We take what we do very serious. What we do fundamentally make some massive impact in our borrowers lives, sometimes has generational impacts, and this is oftentimes the largest purchase or transaction for our borrowers in their lifetime, and so they need an extra level of service. They oftentimes they need some handholding. They're not as comfortable with all the different intricacies of commercial lending as we are, of course, and so we take that very, very seriously and provide a very high level of service compared to a lot of our competition out there. The Third S is specialization. I mean, as I just said, we just have these three products. We're not trying to get people to to move their payroll processing to US or their commercial insurance to us, or open a couple of new accounts or, you know, all the other things that a lot of the banks and credits compete against. They try to be all things to all people and I've often time said it's makes a lot more sense to pick a niche and be the best at your niche as opposed to being a generalist. So that's where specialist station comes in. And then the last one I've I've alluded to it, which is sincerity, which is for myself and for the folks that work had found head our tomb is focused on our mission. It's not just about people getting a paycheck, you know, every compensation. It's also about how we do things, how we go about doing things for people. You know, are focused on trying to build up the entrepreneurial community and help them grow, sometimes acquire other businesses, create wealth through commercial real estate ownership, et CETERA. But all these ways increase prosperity, which is terrific for our society because this, you know, we need people who are willing to get out there and do these things to try and to grow prosperity because it helps everybody. The rising tide lists all boats, as they say, and we feel like we're a pretty powerful piece of all that. That's great. So can you share with us? Are you at liberty to share some of the names of the companies that you've worked with in the last few years or maybe some success stories. I don't know if I can share too many names. I mean I can give you various situations that we've been a part of. I mean we've done a tremendous amount of business acquisition financing over the last few years. I think that's going to stay with us for a while. There's demographic called baby boomers and about nine thousand of them are retiring every single day. So they own fifty six of all small businesses in America. Guess what, they're probably not gonna want to just shut the doors and get nothing for the business. They're much rather prefer to sell the business. So I think there's gonna be a tremendous amount of business acquisition transactions. Over the years. We've gotten into different sub niches. I guess within our Niche we've done a lot of financing of daycares over the years. We've done a lot of financing and hospitality space. You know, whether it's been breakfasts or limited service flagged hotels. We lately, I'm not sure how it's come about. Maybe it's my marketing folks or my underwriters. We we've seem to do a lot of breweries discoveries these days. I have a feeling they're getting examples. Maybe that's what's terms some good here eggs. Actually, those are some examples. and May we do...

...a lot of work with all types of physicians. We've been doing a lot of e commerce business financing over the last few years. That's obviously been a pretty hot area. Still doing a fair amount of office warehouse financing. Again, warehouse financing relating to the e commerce space. Of course, there's a variety of different things. I mean it's that's what makes it fun. A big piece of what makes it fun of what we do, which is we don't really have any strict filters in terms of saying we don't like this industry or we can't stand that industry, what have you. We're pretty agnostic. So long as it's eligible and the business is healthy, we're going to be very interested in doing a transaction with those business owners. So has your organization been impacted at all by the existing supply chain issues or any some of your clients we're experiencing backlogs and supply chain constraints and labor constraints throughout the country. Is this? Has this been a factor with some of your clients? It certainly has. Yeah, we hear about it from time to time. I also think you know labors where it hasn't been a big problem. Of course, a really bizarre thing maybe to your listeners. We've actually been impacted, much like everyone has in the commercial ending space, although I don't know that it's been publicly talked about much in our world. We have to verify the tax returns that were given from the business or the individuals, and the I R S has been so backlogged coming out of the pandemic for a variety of reasons, understaffed and underfunded among other things, that we are having, you know, multi week, sometimes multi month delays and getting tax trans groups to verify the returns we were given are the same ones of the I R S was given. It is festering problem that's been happening for a good year and a half or so and it's caused closings to take longer, just to be delayed, and it's it's a little frustrating, but you know, all these things, I guess, are outcroppings of the pandemic you know, whether it's supply chain issues. There's a lot of demand and not a supply. Of course, that we've had a lot of money for at it in the market, which has caused inflation. Now we've got a war. I mean there's just a lot of stuff that we've all had to digest over the last two or three years. It sure makes me wish sometimes all over again, because those days we're pretty easy by comparison. Absolutely, and so looking at some of the problems and challenges that we have in our national economy right now, you're a financier, you're in the lending space, but you're a man of finance and you have a strong background in economics and marketing because you're working with small medium sized businesses. What are some of the remediations? What are some of the fixes that Chris hearn would recommend in terms of corrective actions needed to get the economy back on its rails? That's a good question. I think unfortunately, the Federal Reserve created some of the problem that we're in, which means they need to continue on their path of bumping rates so they can, you know, sort of take the punch away at the party a little bit and so they're definitely on a path to doing that. You know, I'd like to see us continue to onshore manufacturer. I think it's painfully obvious during the pandemic when China was shut down, China being the biggest recipient of a lot of our offshoring of, say, pharmaceutical manufacturing, for instance, and I think the dynamics are not quite what they once were. The costs to ship inventory to Southeast Asia only to be assembled, to turn around and ship it back to us. It doesn't make as economic sense as it once did, and so I think you're going to see more and more US manufacturers keep their business operations here, particularly as things get more automated, whether it's robots or or ai or what have you. So I think that's a positive trend that we're headed towards. We got little issues all over the place, Raphael, I mean I'd like to see our politicians finally address retirement issues, raising the age to get your social security, for instance. When that program was enacted, I believe the life expectancy of someone, I think it was under sixty five years, and now life expectancy is like seventy six years, and...

...yet we haven't changed anything and we have more and more people living to their nineties or their hundreds, and that will continue, by the way, with medical innovations. So I think that would be something that we need to address. Of course, the politicians have been very scared to go there because, you know, there's pretty hardcore partisans on either side of of these issues and I think we need to do a better job of supporting the entrepreneurial community. We do a lot of talking about it. There's a tremendous amount of rhetoric over the last twenty years that I've been doing this. Nobody had an entrepreneurial degree in most colleges and universities years ago and now they're everywhere. But I'm not so sure it's something that's is teachable, perhaps as as some of these academics think it is. So I think there needs to be much more support for business startups. I was talking to somebody in central Florida about this a couple of months ago who's I'm very involved in the Entrepreneur Alliance of Orlando and you know, we were talking and I told him I said, you know, I was recently at a baby shower. It was great, right, you know, and everybody brings gifts and they have a great time. I said, why don't we have a startup showers? And he's like, what do you mean? I said, when someone starts a business, why do we not throw a party and go and support that entrepreneur? Because it takes a tremendous amount of courage to go out on your own, to start your own business and we should be supportive of them. And he said, you know, that's a great idea, and then I said well, and then on the other side, I think we should have some sort of a service if there's been a business failure. You know, they tried hard but they screwed up. Whatever didn't work out. Okay, let's throw a party, a service, let's bury it metaphorically, so that they can, you know, close the loop and move forward. So these are a couple of things I think we're going to start doing. You'RE gonna see more of US doing this in Orlando, just as a way to support the community, but just little things like that. I mean, I don't know how much time you want me to go on about this. Ploceleyeah, I'm interested. We got to fix but those are, you off top of my head. So how have you been able to scale your business fountainhead? Tell us about the growth strategy. Obviously you've been one of America's fastest growing privately held firms for multiple years. You at the very top of the list. Tell us about your secret sauce and the Strategies for growth at Fountain head. Well, I mean, I think it's no huge secret. You've got to find the right people and you've got to put them in the right places, turn them loose and have confidence. I see this all the time with entrepreneurs. They hang on to everything, they white knucklet and they're really hesitant to delegate to somebody else because that's somebody else maybe can only do it whatever as good as they can. Well, that's fine, but we've all as entrepreneurs who've got to understand that there's a certain level that's good enough and if you want to scale your business, you can't do it as a sole proprietor. There's only so high you can scale on your own. You're gonna have to bring you in a team to help you. Frankly, when you're starting off, most entrepreneurs are in every box of the ORC chart. But you know the goal over time is to get yourself out of the vast majority of those boxes on the old chart. So that's part of it. It helps to be very, very intentional about your industry, your space in your industry and how you want to go about it. You know somebody who wants to start a business, you know, spray and prey, be a generalist. It's just that's not going to work as well. We are a society that appreciates expertise and it's focused on specialization all over the place, and so people need to position themselves into that rather than trying to be all things to all people. And I know that's tough because I got a lot of sales people who work for me. You know, I was a salesman personal one time, a long time ago, and salespeople are notorious for it's an opportunity. It's not quite what they should be doing, but it's close and so therefore they want to pursue it and it just sucks up a ton of their time and energy and I've rarely seen those situations turn out well. So it's a little counterintuitive. But if you learn to say no more often, I think you position yourself to excel...

...in your niche much more so. So. So those are some of the things. I mean you've got to be supportive of your people. You've got to be willing to do things a little unconventional. You know, that's one of the things I've always done and my businesses is kind of look around at what everybody else is doing and try to do about a hundred eighty degrees opposite, because you know, there's this interesting thing and statistics called, you know, aggression to the mean, and that's everybody else doing the same thing. And we see it in all industries, you know, all sorts of businesses. Big businesses especially are notorious for this, but you know, when they were much smaller, they probably did something much more innovative and they didn't follow the well worn path of all their competitors. I mean, if you do that, you're just going to be in the middle of a bunch of more people that you compete against. If you can go the other direction, there may not be as many people there. So I think those are some of the things to think about as philosophically as you're trying to grow your business. You know, you've got to be willing to do things that other people are going to say that you're cre easy for doing. And the cool thing is most of our clients have had some of these experiences, you know, where they had the friends and family who told them, when they were going to go start their business, that they're crazy and they shouldn't do it. It's too much risk and you're gonna risk all your savings and your family is not going to be able to have food on the table, all these types of things, and yet they still did it and by the time they're talking to me they probably have some level of success. And I go to great blanks to explain sort of these narratives to my folks and they get it, and that's why I think we're as passionate about what we do is you know how we do it day to day. Chris, it's been a pleasure having you on Uncle Sam's secret sauce. It's been a great conversation and I'm sure that our listeners have benefited tremendously from your sage advice. I like to have you back on the show when you launch your new products so that we can discuss these with our listeners, especially since we work with a lot of small businesses that are in government contracting and that are looking at SBA loans and there's only one for that. It's called Fountain head. What's the best way to reach you, your team and your website, if you want to give us the details so that we can make those publics to our audience. Sure, sure, so. Our website is fountain heads CC DOT Com. So fo U N T A I, N H G A D C C DOT COM. You can also drop us an email at Info I N F O at Fountain at CC DOT Com. Google US look us up online. You know any of the social media is. We're all over the place. So reach out to us, follow us, subscribe to our podcast, but, most importantly, just reach out and let us know how we can help. Absolutely and we're gonna BE FEATURING CHRISS information his company's information on our teammates website at Rafael Morrero dot com, since we are strategic partners with Fountain head. And if anyone else needs additional information on Chris hearn's products and services, feel free to reach us at Info at Rafael Merrero Dot Com and also visiting our website, Rafael Marrero Dot Com. Chris, thank you once again. It's been a great conversation. We look forward to having used back soon. Thanks, Rafael. Appreciate it. Based in Miami, Florida, Raphael Morrero in company is a management consultancy founded in two thousand and eight by Dr Raphael Morrero. The firm helps other veteran owned, minority, women and small businesses break into the federal marketplace and do business with the world's richest and most powerful client, the US federal government. To learn more, visit Raphael Marrero Dot Com. You've been listening to Uncle Sam's secret sauce, a Rafael Morrero and company podcast. Keep connected with us by subscribing to the show in your favorite podcast player and giving us a rating. That helps us to keep delivering the latest in business growth strategies and, ultimately, learn what Uncle Sam's secret ingredients are. Thanks...

...for listening. Until next time, M.

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