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Medallion Business Credit: Creating Solutions, Not Pushing Products

Date: Dec 03, 2014 @ 07:00 AM

In speaking with Marc Adelson, one point becomes abundantly clear: the recently appointed president of Medallion Business Credit is more about solutions and less about product. He explains, “Although we provide asset-based lending, I like to think of ourselves as a capital solutions provider. From that perspective, I’ve been in the senior secured space my entire career.”

Adelson agreed to speak with ABL Advisor on his third day at Medallion and while the future is yet to be written, he shares his vision with regard to his new position and his assessment of the current landscape as it relates to Medallion Business Credit.

Without question, Adelson’s career has been impressive both in terms of its duration and the accomplishments achieved. His exposure to the world of asset-based lending came from Harris Epstein, Adelson’s uncle. “My uncle Harris had been in commercial finance his entire life and he introduced me to the people at Security Pacific Business Credit, which was formerly A. J. Armstrong. They, along with the people from Heller and Monroe Lezer, were the original secured lenders.”

Photo of Marc Adelson - President - Medallion Business Credit

Adelson, who describes himself as one who “nests” in terms of his employment, spent many years at Heller Financial, first in asset-based lending and then in Heller’s leveraged finance group. In the early 1990s, Adelson was deployed to the workout unit. He recalls, “It was an amazing learning experience and it was where I really learned to lend from a lending perspective. At that time, the financial world was falling apart and I was sent to work on some very complicated structures.”

In 1993, once order was restored, Heller decided to re-enter the asset-based lending arena to meet the growing demand as the private equity community began to emerge as a powerhouse by acquiring U.S. manufacturing and distribution companies in the small- to mid-market. With that, Adelson was re-deployed to resuscitate Heller’s presence in the ABL market and became one of the original founders and leaders of Heller’s asset-based lending group. He held this leadership position until the year 2000.

“I had 14 terrific years at Heller … I had built up its capital markets group on the asset-based side as well as their buy desk and syndication desk. In 2000, I got a call from Larry Marsiello, one of the legends in factoring and asset-based lending, inviting me to join CIT. So that’s what I did and by 2005, Mitch Drucker and I were the co-heads of what was then called the C&I lending business. We added a good many verticals and grew the ABL business from about $4 billion to just about $7 billion by 2007. It was then that I left for the UK to explore ABL and factoring opportunities in Europe on CIT’s behalf. This was an incredible opportunity and unfortunately the financial world ‘fell apart’ once again with the onset of the Great Recession.” Adelson says.

The already seasoned executive who had now gained global experience returned stateside and spent a brief while at Getzler Henrich running its financial restructuring practice. “Bill and Joel are very close friends of mine and I did some CRO work and really liked it. But I really had the itch to get back into lending but in a different way.

“I wanted to get back into lending in an entrepreneurial way … I wanted to learn both the right side and the left side of the balance sheet. I was never really responsible for the right side … I let Heller and CIT’s treasury worry about where the money came from. Joining Capital Business Credit (CBC) gave me an opportunity to do that. That’s when I became the CEO at CBC. I really enjoyed working with Andy Tananbaum. Under Andy’s tutelage, I really began to understand how to become an entrepreneur.”

After a series of discussions with Andrew Murstein at Medallion Financial, Adelson began to envision the possibility of finding a vehicle which provided the balance sheet strength of a bank and at the same time, afforded him ability to close, on a selective basis, leveraged transactions that didn’t necessarily fit into a bank.

For Adelson, Medallion represented that opportunity. He explains, “We’re structured as a business development company, yet we have a Utah bank. Many of our transactions fit into the traditional banking model from an ABL perspective, but we can also compete with the entrepreneurial finance companies. We have the ability to make decisions quickly due to our size and structure.”

Adelson also notes Medallion is all about trying new ideas and attracting talent in specific areas. He says, “We’re ready to tell them, ‘Here’s a part of our balance sheet … use it to grow your business.’”

Like all entrepreneurs, Adelson’s aspirations for Medallion Business Credit are high. In terms of the here and now, he notes, “Today, I’m running an asset-based group and it’s not very large. In fact, our largest deals are less than $10 million. Going forward, I see us doing deals up to $15 million. We like diversification in product, in asset mix as well as in deal sizes. We don’t want to take big hold positions but we can syndicate and we will be getting more involved in that as well.”

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