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The Most Thankless Job in ABL: National Sales Manager

Date: Feb 06, 2020 @ 05:00 AM

Sales Managers in asset-based lending (ABL) have the most thankless job – part sales, part psychology, heavy administration, always on the go covering markets and trying to meet ever-increasing quotas. Talk to any National or Regional Sales Manager and they will tell you what it’s like trying to a hire a team – let alone an all-star team – train them, achieve quotas, deal with human resource issues and battle credit. All the while, you rarely set foot on the actual proverbial baseball field. You typically don’t get to the level of sales manager without knowing how to compete and that adrenaline never goes away. However, it’s an entirely different game when you become manager of the baseball team rather than a player on the field.

Similar to the manager position in the game of baseball, the business of ABL seems to see a lot of change at the sales manager level, especially on the bank-ABL side, but it is pervasive on both bank and non-bank. This is evidenced by an epidemic as of late of NSMs either leaving to go the non-bank route or going back in the field. The off-the-record sentiment among current and former NSMs is that it can be very frustrating to intimately know each region and staff it, but have limited ability to control anything. Also, of note, many times NSMs inherit underperforming BDOs from prior managers that create a difficult dynamic between feeding them leads or letting them fail. It is almost impossible to build and keep a cohesive team from coast-to-coast, especially in bank ABL when regulations and bureaucracy make it harder to compete.

Bank ABL quotas seem to go up regardless of where we are in the cycle, yet at the same time bank C&I portfolios are generally clean. This is pushing bank ABLs to try to poach from other banks who also probably have somewhat clean portfolios. It’s a vicious cycle with banks having clean portfolios yet still expect growth from their ABL groups. The quotas typically do not get reduced, even if people leave, meaning fewer people are forced to do more. This topic is a very fun debate amongst sales managers around the country as they get penalized for not being able to hold onto talent based on a compensation program they did not design or credit process they do not control.

Managing BDOs deserves an entire article by itself. Rainmaker BDOs are almost impossible to find and in general BDOs can range from just getting started, inherited, experienced and nearing retirement – it’s a wide range. Some just get tough markets to cover like when another bank has a controlling market share. Alternatively, some just aren’t great fits. Managing and working with people in an intense deal- and time-driven product like ABL takes its toll as, unlike traditional C&I lending, ABL can be a sprint to the finish line business. Now multiply this across all markets all the time. National sales managers need to get team feedback, paint the best picture in front of credit committees, and, of course, know when to buttonhole credit. It’s playoff time all the time when leading the sales function in the banking world.

The analogies to being a baseball manager are there – team sport with individual metrics in different parts of the field. Now replace the field with the entire country and the manager needs to know each region. The travel is non-stop and the markets can vary greatly as too much focus on national economic data does not tell the story region by region. The sales manager has no choice but to learn each market as it is only inevitable that at some point, they will be player-coach in a market given the performance demands instituted by banks and non-banks.

Underwriting and credit play real roles as these functions are typically centralized whereas the sales team and deal flow are typically national with varying industries and situations. Port cities might be logistics heavy whereas the Midwest is industrial heavy – asset light versus asset rich. Different city, different credit fosters different strategy that might vary depending on a bank’s credit culture. It would not be uncommon for a sales manager to get in between an experienced and, of course, credit-trained BDO and an underwriter who has limited experience. In fact, this would be common place. This is the intersection where the critical role of sales managers becomes apparent. It is a real skill to deftly act as a liaison between credit and the BDO as well as assist in managing the BDO’s expectations.

The competitive nature of each market will vary wildly such as whether the NSM’s bank has a local retail presence or certain other banks choose to undercut on pricing. In other words, it’s a multi-dimensional game with different talent, competitors, tactics, industries and strategies in each market across the country. Also to note, many markets might not have any affiliation, so you are really going in with no backup. Banks in general swing the pendulum on risk in the ABL market as most banks typically have a bank culture that values low leverage and cash flow versus financing off of the balance sheet. 

This leads into the complex dynamic at a bank between bank-ABL and bank-C&I executives. A good bank-ABL BDO provides strong coverage to his/her commercial banking group as it should be a great source of referrals. These same groups can be competition and ABL can’t compete with C&I if C&I really wants a deal. The bank C&I groups can always win on pricing and avoid all the bells and whistles that come with ABL. It’s an easy win despite many clients being better fits in an ABL structure to protect the bank. Not all, but many bank RMs are loathe to transfer clients whether it be loss of income or fear of straining an important relationship. This obviously varies bank by bank and even by market.

Again, similar to baseball, the NSM has to see the entire playing field. The travel, the recruiting, managing people, managing deals, the actual deal shepherding up-and-down the chain plays out like a continuous news cycle. Whatever an NSM traded in pay to get the title and role, they lose in stress and travel trying to make sense of each market and make sure their team is focused. Should one ever get discouraged they just need to remind themselves they can easily go back to being a BDO and potentially make more money working less. If you thought managing a baseball team was hard, good luck managing an ABL team in this market. Good managers are hard to come by in sports and in business.

The author wants to know who really has the hardest job in ABL and he can be reached at his email below.

Charlie Perer
Co-Founder, Head of Originations | SG Credit Partners
Charlie Perer is the Co-Founder and Head of Originations of SG Credit Partners, Inc. (SGCP). In 2018, Perer and Marc Cole led the spin out of Super G Capital’s cash flow, technology, and special situations division to form SGCP.

Perer joined Super G Capital, LLC (Super G) in 2014 to start the cash flow lending division. While there, he established Super G as a market leader in lower middle-market second lien, built a deal team from ground up with national reach and generated approximately $250 million in originations.

Prior to Super G, he Co-Founded Intermix Capital Partners, LLC, an investment and advisory firm focused on providing capital to small-to-medium sized businesses. At Intermix, Perer spent significant time sourcing and executing transactions and building relationships within the branded consumer, specialty finance and business services industries. Perer began his career at Oppenheimer & Co. (acquired by CIBC World Markets) where he was a member of the Media Investment Banking Group. He graduated Cum Laude from Tulane University.

He can be reached at
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