© The Secured Lender 2010
“I’m your MotherFunder” Excuse me?
You read correctly. With a name and marketing slogan sure to catch everyone’s eye, MotherFund offers merchant advances and financing to allow firms to have access to a consistently available source of funds that keeps businesses growing. Several of MotherFund’s products are based on accounts receivable financing or factoring.
The company name was coined in 2007. Jason Bishop, CEO, had been commuting every week to New York City from Texas from 2005-07, working on the founding team of Strategic Funding Source. The travel took a toll on his family and eventually they decided to start a company closer to home, in Rockwall, TX.
“We started the company as Rockwall Capital, LLC and the name was a little boring,” admitted Bishop. “There were competitors and brokers springing up that used a handful of the same names mixed together to mimic AdvanceMe and AmeriMerchant, so we really wanted to use something that would separate us and make us memorable to merchants. As we were playing with names, MotherFund came up and we couldn’t stop laughing as we toyed with the marketing potential of it. We now incorporate “I’m your MotherFunder” onto t-shirts and business cards. We really feel that it hit spot-on to demonstrate a young, aggressive company that makes doing business enjoyable.”
Despite being founded right before the onset of the economic crisis, MotherFund hasn’t felt the effects as much as others, Bishop noted. Although it’s a young company, its management team and board have 60 years’ experience in specialty finance to restaurants and retailers.
“We stayed away from low-margin businesses, we backed away from super high-end stores and plowed money into mid-range retailers and restaurants,” Bishop said. “We knew that people were still going to go out to eat, but they might pick Chili’s, for example, rather than a S70 steak house. The biggest challenge that we have faced is the availability of affordable capital. My former company raised S8 million in equity and S50 million in debt, priced very fairly. We thought that we could do the same at MotherFund, but, after our first 12 months when looking for a hedge fund partner, most of the numbers we called were disconnected. After working almost full time on fundraising and finding very little interest, we had to face the reality that it was time to buckle down and make a great company with the small amount of capital we had. We also realized that, until we reached critical mass, we were not going to locate cheaper sources of capital, and had to figure out a growth strategy while paying 18% interest for our debt lines. We still have not figured out the solution to maximize profits by finding the right financial partners, so we are very careful when adding expenses to make sure that every activity pays for itself. Eventually, if things continue like they are, we will be throwing off all the growth capital that we need while maintaining our equity positions.”
Primarily serving the retail sector, MotherFund has found that, while everyone is suffering to some degree, the merchants with good fundamentals prior to the recession are still able to make a profit with their business, while those that were having trouble before the recession have failed.
“This has created an environment where the credits that we look at now are of a better quality than those we saw five years ago,” he said.
MotherFund, which serves start-ups less than a year in business, is seeing new businesses opening daily across all of the major markets. It plans to continue to polish and expand its marketing efforts and add complimentary products to its offerings.
“Most of the operators have gone into business with a more conservative plan that has allowed them to keep their businesses going and some are doing extremely well,” Bishop added. “We also fund some online businesses, and while it’s more difficult to get a handle on predicting their future sales volume, we have seen an incredible spike in consumers using the Web to cover more ground while searching for bargains.”