The Banker’s Lending Resource and Solutions SpecialistDownload PDF
Frank Bromley is reclining in a cushioned chair behind an oval-shaped glass table at Eclipse Capital Group’s Sylvan Lake offices. The building’s exterior, cloaked in greenery and set back from the corner of Orchard Lake Road and Middlebelt, is nearly hidden from view. Inside, its modern furnishings are elegant yet understated, mixing wood, glass, and other tasteful touches. But while the setting is serene, the business under discussion between Bromley, Eclipse’s Principal, and Katie Katzman, one of Eclipse’s Banking Relations Officers, is often transacted under stressful circumstances. “We’re meeting people in many cases for the first time while their life’s work is about to go down the drain,” Bromley says.
“Many are just worn down by so much negativity,” Katzman says. “They’re tired of hearing people tell them, ‘no, no, no.’ They’ve been turned down so often, frustration sets in. It’s a relief when they’re referred to us and we can say, ‘yes. Yes, we can help.’ And sometimes they just need someone to listen. So when I get a call from a client at midnight, I take it.” “It’s about helping people,” Bromley says. “And it’s a passion throughout the firm.”
From Niche to Full Service
Bromley founded Eclipse in 1997 to concentrate on brokering local commercial real estate financing for high net worth investors, and he says the firm “grew overnight” for two primary reasons. Many of his clients owned other businesses, so Eclipse more or less naturally became involved in business lines of credit, equipment lending, and other forms of corporate growth financing. Bromley also rapidly developed a broad and extensive lender base, and Eclipse’s name and reputation grew right along with it. By 1999, a large bankruptcy law
firm – “whose focus was to keep its clients out of bankruptcy, not put them through it,” as Bromley describes it – was referring Eclipse to some of its clients. Many engaged Eclipse’s services, and Eclipse proved itself extremely adept at efficiently and effectively restructuring
the client’s debt before also finding the most appropriate lending partners to refinance it. Before long, Eclipse’s transformation into a full-service firm was nearly complete. Business, comprised at that time of a nearly equal financing split among commercial real estate, corporate growth, and workout/troubled assets, was growing – “and we didn’t even have to advertise,” says Bromley. “I measured our success by how the phone was ringing. And it was ringing off the hook.” (To this day Eclipse has done almost no direct advertising and doesn’t even have a web presence – though a new site is in the works.)
“Garbage to Gold”
Over the years Eclipse has developed an extensive financing network of thousands of lenders throughout the United States, Canada, and Europe. Bromley says his firm has been investing nearly a half-million dollars annually, communicating with lenders through various lender associations, cultivating historical relationships, developing new ones, and constantly conducting data searches and introducing themselves to lenders. And many lenders continue to seek them out. “Some might have a preconceived notion that a firm like ours brings expensive money to the table, but that’s simply not the case,” says Bromley. “Our job is to go into the market and get lenders bidding to drive down interest rates, increase amortizations, and put more reasonable covenants in place that will help sustain business growth.” Bromley says Eclipse has handled everything from the most routine small business lending transactions to the financing of underground gas pipelines. Because its lender base consists of specialty and niche lenders, they are able to offer aggressively competitive interest rates and longer amortizations. And any client’s relatively small loan is coupled with the other 500 million dollars or more in other financing Eclipse represents, so each individual loan garners more attention and leverage than it ever could on its own. Eclipse also regularly works with the USDA and the SBA, and it recently began working with the MEDC to provide its first-ever hospital financing loan guarantee. “One of the voids that we fill, and the value that we
bring,” says Bromley, “is that we help banks retain their business clients.” Too often, those who are turned down for new financing seek out other lenders, and they bring all their other business with them when they find a new opportunity. Many lenders might only be able to accommodate certain portions of a single client’s business – the line of credit, for instance, but not the equipment loan. Eclipse tells those bankers, “Your garbage is our gold.” Instead of turning them away, they can turn them over to Eclipse, which will find funding sources for the loans those banks can’t fund, while the bank keeps the client’s core business – taking deposits, handling their payroll accounts, and providing other lines of credit. “And when the borrower’s financial condition improves and the credit returns to a status that is acceptable
to the bank, we’ll return it,” says Bromley. “I’ve worked with Eclipse Capital for more than ten years,” says one longtime lender in the Special Assets Group of one of the largest banks in the U.S., “and they’ve proved they deliver on what they communicate. I consider them one of my greatest tools in managing my banking relationships.” Brian Banning, First Vice President of Citizens Bank Business Finance in Chesterfield, Michigan, concurs. “Eclipse Capital has been a tremendous resource,” he says. “As an asset-based lender, my product does not fit all needs and I hate to say ‘no’ without providing options. Eclipse has found financing for several of my clients when I was quite sure financing was not going to be available.”
Eclipse is not only an important alternative lending source for banks trying to retain a client’s business. The firm is especially well-known as experienced workout experts who have long been consulted directly by banks to deal with troubled assets. “For a long time banks have been coming to us and saying, ‘We don’t like this credit anymore. Please take care of it for us,’” Bromley says. Due to changes in the market and the economic collapse of 2008-2009, most Michigan lenders remain extremely wary of commercial real estate lending in
Michigan. But Eclipse’s out-of-state lenders welcome much of it because many perceive the values as stable and the prices at historical lows – and of course their portfolios are not already saturated with it. Bromley cites this as one of the reasons he’s always felt as though his company has had no real competition. “Most turnaround firms that provide financing really only have a local lender base,” Bromley says. “There are refinancing brokers on the one hand, and turnaround specialists on the other, but nobody has been able to provide opportunities in both areas for middle market companies the way we have.” About 70% of Eclipse’s current business concerns turnarounds, workouts, and business refinancing for distressed and emerging companies, while the remaining 30% concerns investment real estate financing – though much of that would still also be categorized as troubled assets. By the end of this calendar year Bromley predicts more of a 50-50 split, and he intends to start approaching banks more directly about having them retain Eclipse to review all of their distressed asset files rather than dealing with them on a piecemeal basis. “We’re intent on providing solutions that keep a client from filing bankruptcy or otherwise making moves that
put a bank in a less secure position,” Bromley says. “For clients who are experiencing troubled times, we can help manage what is invariably an extremely stressful process.
For the banks we can assess what the market will bear, provide all the options, and avoid putting a company out of business unless there are absolutely no other alternatives -- which in our experience has been extremely rare. “ Eclipse provides a full service staff of CPAs and former bankers who provide honest evaluations of whether a transaction is still viable and, if so, a reasonable timeframe for substantive progress. It also makes the bank aware of a number of additional market alternatives so that it is not restricted to the usual three options: selling the note at cents on the dollars so that that third party might foreclose on it; hold the credit and hope it gets better; or liquidate. Most lenders aren’t in the business of piecing loans out to other lenders, so Eclipse’s research and resources are crucial in this regard. “We also handle all reporting requirements,” says Katzman. “So we can help make both the banker’s and the client’s job easier.”
Always Finding A Way
Until recently Bromley had kept the company relatively small, but he has hired an additional CPA, and he's bulking up his staff of bankers and customer care consultants to accommodate a growing caseload – within as well as outside the state. Bromley likes to keep active in the business of the firm, though, so he’ll maintain at least some personal involvement in every file, and he'll continue to determine whether any case ultimately goes forward. “Frank always makes sure things are running well,” says Katzman, “but he’s got a great, supportive team
behind him. Everybody knows what’s required, and we know how to get it done on time. Frank likes to meet the clients, and walk the properties, and review important documentation, but he relies on each individual’s expertise to direct and close every transaction.” “We get the deals done that others can’t or won’t,” says Bromley. “We seem to have an ability to look at
something that others with experience and knowledge and expertise will say, ‘No Deal,’ but we’ll find a way to make it work. “We allow clients to focus on their own business – to get back to doing the work they do, both lender and borrower – while we take care of what’s been ailing them,” Bromley says. “That’s why people love us. And that’s why we’ve been blessed with so much business.” To learn how Eclipse Capital Group can assist your bank, call 800-509-3552 or email email@example.com.