Episode Transcript
[00:00:05] Speaker A: Welcome to H. Romney. Rodney talks for the Superstars.
[00:00:10] Speaker B: Welcome to the Love and Business podcast. I am Brit Arnold, president of Tigler Construction and supply.
[00:00:15] Speaker C: And I'm Mick Arnold, president of Arnold Packaging and Arnold Automation. And today we are super excited to have an amazing guest. We are joined by Auggie Chiacera, who is the regional president of M and T Bank. So, Auggie, welcome.
[00:00:28] Speaker A: It's great to be here. Good to see you both.
[00:00:30] Speaker B: Yes, welcome, Auggie. We are psyched to have you here.
[00:00:32] Speaker C: And, you know, we spend a lot of time on our podcast talking about entrepreneurship, startups, and, you know, there's an aspect to needing dry power and powder and capital to actually launch a business. And we thought it would be great today to tie some of this together. You know, we have any number of episodes where we talk about funding and really talk about M and T as well. You know, I think you're a lot of shout outs. You're a listener, so you've seen the shout outs and heard the shout outs for sure.
I thought we're always compelled by stories here. And as small business owners, there's a lot of stories that get created. You have been the witness of and created some. And what brought us together today, I think is very well illustrated by your story, which is what brought you two together. I'm just a bystander in this relationship, but I'm trying not to be. I think we should say that.
Yeah. So you know what I think, Britt, it would be great for you to let the audience know how you got here at such an important part. And I think it would be a great way to start.
[00:01:36] Speaker B: Yes. So this podcast today is all about you, Auggie. But I do think for the context, for the audience, it's important to explain the story of Taylor construction and supply, the partnership with M and T, so you audience can understand how integral that M and T has been to our evolution almost going on eight years now. So when I started the company in 2016, we had a, a couple of our first projects were bars, that we were bars and restaurants we were building in Baltimore City. And they were our very first projects and our very first customer. We had no banking partner when we initially started the projects. So I realized very quickly that to have a real company, I was going to have some type of banking. I needed a banking partner and some funding. So as we were going along in these projects, and meanwhile, like no cash, nothing, the customer, who is now our great friend Shawn and Drew and Mike, they said, can you work directly with our bank? Which was M and T bank. And I said, sure. So as a contractor, we were working directly with you and getting our payments and everything else. So I created this rapport with M and T during those very first projects. During that same time, I was going out trying to get a banking partner, and I was going to smaller banks, smaller than M and T in the immediate area. I put this business plan together and all this stuff to try to get banking, and I was getting just no rejections and rejections. And I didn't even go to M and T to start. Cause I was like, m and t is out of our league. Like, not gonna happen. So finally, because I had established a rapport with you during these first projects, I thought to myself, okay, I'm going to approach M and t and just tell them about my vision and what I foresee. Tagler construction and supply being. And that's exactly what I did. And at the time, it was Mickey Gorman. I remember person because he had helped me so much. And we sat across the table, I explained to him what the vision was, how I had very limited was this.
[00:03:45] Speaker A: At the McHenry row.
[00:03:47] Speaker B: It's exactly what it was. I remember even the smell, because the sub shop was right there. So, like, I have these. I remember the smell of the sandwiches. I remember, like, where Mickey was sitting, what I was telling him about the company, and what my vision was. And if he didn't call me that afternoon, he called me the next morning, and he said, we're going to extend. It was a $50,000 term loan and a $50,000 line of credit. And I was like, we are in business. And that was the beginning of our banking relationship. And I was just so thankful, because I knew, well, you were obviously assessing the risk profile. I knew you were also taking a chance on us with very little history. And Mickey had even told going on to say, you're the first startup that we've decided to bank with this year in the area. And I just remember, like, wow, I feel like, why me? And so grateful. So just, I wanted to tell that story before we got started, but now let's get into your story, and we want to learn about Augie as the human.
Not starting off with Augie the banker. Yes, Auggie the human.
[00:04:53] Speaker C: The character. The character that is named Augie or August is obvious. And I will tell you, I don't know if you know this, but doing research on your biography as a younger Mandev, and you've done a good job of hiding that. I don't know if that's intentional or not? It's not intentional, but let me read you one. This is a beauty and you can build out on it. And I love how this comes together.
Augie's journey from a curious and driven young boy to a leading figure in the banking industry is a testament to his dedication, hard work and passion. Oh, that's awesome.
So time you get that clip to Augie's mom's stat.
So let's go back to the curious and driven young boy part. And I don't know. I mean, as a guy that only ever pursued cardboard boxes and bags of air, what my lane was going to be, that choice was somewhat made for me. But banking is certainly an interesting choice, and I think our audience would really like to understand that evolution.
[00:05:44] Speaker A: Sure. Gosh. Going all the way back to when I was a kid, I grew up in a small working class town outside of Buffalo, New York, a town called North Tonawanda. At the time, there were about 35, between 35,040 thousand residents. This would have been back in the mid seventies, if you will. And I had the good fortune of being raised with my dad's extended family. And so we lived in one of these old fashioned italian type homes where my family and I were on the upstairs. My cousins, my aunt and uncle were on the bottom floor. We had two families in the back. And we all got together all the time. It was either Sunday before mass or getting together after mass on Sundays, or all the family events and holiday events and so on. And growing up with a whole bunch of cousins that are around your same age but a little bit older taught me pretty early on how you had to fight to get what you want.
And it was a loving family, a caring family. But when you're with cousins that are anywhere from five to six years older than you are, you gotta learn to sort of toughen up a bit. Absolutely. And realize it's for the long game.
[00:06:54] Speaker B: Scrappy. Scrappy. That's getting scrappy.
[00:06:56] Speaker C: So were you that Mark Cuban guy that had the paper route at six months old and was just a born entrepreneur, or what did that look like when you were younger? What was attractive to you?
[00:07:06] Speaker A: I think this is one of my favorite stories. I've always liked school and I've always liked reading. And I come from a family of very dedicated hard workers. Everything from paper mill workers to my dad was a hung drywall. He later became an athletic director and football coach. And I was 15 years old, about to turn 16, and I came home one day and I said, dad, I said, I don't think I want to work. I said, I think, you know what? I'm only about to be 16. I really want to take this opportunity to read and get into my studies. He said, that's great. And then he said, the next day, he took me over to our local grocery store, and I was working two days after that, which.
[00:07:51] Speaker C: At which point, and that was one.
[00:07:53] Speaker A: Of the best lessons my dad gave me. Like, look, there's no free ride here, and I understand what you may want, but I think it's time that you sort of hop on the horse here and get working.
[00:08:03] Speaker C: And you get two breaks. They're ten minutes. You can read your ass off.
[00:08:07] Speaker A: But it was awesome, because it's in those moments that you realize, like, what would a. To this day, I love payday. I love when every two weeks you get a check. The old days used to get a check like, this is great. And all of a sudden, you realize the responsibility and the freedom that comes from making a little money and what you can do with it.
[00:08:28] Speaker C: Yeah. And you're right. And that trophy, called the check on a weekly basis, is a guy that was a terrible student, because I don't know that I was able to work in semester incorrectly. You know, that instant gratification part, which is, I think, why sales was so attractive to me very quickly. That instant gratification piece is what kept me coming back. I didn't even have, you know, I don't even think I could buy green bananas, let alone wait a semester for feedback on. So I hear you loud and clear on that paper check.
[00:08:53] Speaker A: I know, but isn't it true then, once you start working? Like, I never stopped working. So I started working at 16, and then it was everything from summer jobs and side hustles and then, you know, making it into the corporate world. And it's just what I've come to realize. And a lot of this, I'm sure, came from my dad, where work is life and life is work, and there is no separation of the two. And that was really true for my dad, who was, like I said, an amazing football player and football coach and athletic director and so on, and teacher, and his life was never separate. Right. Because when you're ahead, you know, sort of the star in a small town, you can't go anywhere without somebody knowing who you are.
[00:09:36] Speaker B: Yeah.
[00:09:36] Speaker A: And I sort of grew up in that environment, and the same thing holds true today. So there isn't Auggie the banker and Auggie the dad and Auggie the neighbor. It's Auggie. And it's how, you know, I've really held myself accountable to show up consistently across each of those, you know, three or four different segments of my life, because, well, one person, all of it becomes intertwined, and it's. Frankly, it's a. It's what makes, I think, the job special and makes building relationships like this special.
[00:10:05] Speaker B: Yeah, we couldn't agree more. Mick and I always talk about that. There's that harmony, that integration. There's no silos. And, Augie, I think that's something that I know personally. I can say. I'm really attracted to MNC bank. There's you at the head of the helm. You're such a character and so lively, and, like, everybody's really attracted to that. And you don't necessarily think, like, the president of a bank is going to be, you know, you're not necessarily thinking they're gonna shine through with that character, but you do. You are just Auggie through and through, and that's what everybody loves, and it's super attractive. So definitely what you're saying and what you're doing are very aligned. And Mick and I always talk about, I mean, just not siloing your life like, that's. We don't know how to do that. We don't do that.
[00:10:53] Speaker A: Look, I don't know how to do it either, and I don't do it either.
We met at that panel. We did, yeah.
[00:10:59] Speaker C: Yeah, we had the.
[00:11:00] Speaker A: And I'll never forget when you and I were sitting next to each other, when we started chatting a bit, and then you begin to. It's like peeling back an onion. And that's when I first learned about Brit. Then I learned about Brit's story, and the next thing you know, we're coming out to your operation to see the way you make boxes and the robots, and it's. It's fantastic. And I think that's what makes this.
I think it just. I'm so blessed to be able to do this work because I can meet so many different people, and it's fun.
[00:11:28] Speaker C: Well, you know, you're in a great. An interesting perch to watch. And, you know, your advertising campaigns are super interesting. Right. And you are advertising and highlighting the businesses that you've backed on the way to success. I mean, there's a commercial right here. So you're around entrepreneurs. Did you, along the way, have that entrepreneurial spirit? Was there something that. That you wanted to go into business on your own versus more of a corporate type path? Was that of interest?
[00:11:54] Speaker A: Look, I never thought I'd go the corporate route between undergrad and grad school. I'd worked for a startup back in Boston called the center for design of industrial schedules.
[00:12:06] Speaker C: And you went to bu, right?
[00:12:07] Speaker A: I went to bu undergrad.
[00:12:08] Speaker C: Okay.
[00:12:09] Speaker A: And so I'd stayed in Boston for a couple of years, and in the process of being there, we started our own for profit company called Light Sciences, which basically deals with being able to shift your circadian rhythms based on exposure to bright light and darkness so that you can.
[00:12:23] Speaker B: Oh, man, this is right out my mind.
[00:12:24] Speaker C: I don't want to tell you that.
[00:12:27] Speaker A: You'Ve got the ability to sort of physiologically entrain your body. If you were to fly, for example, from Boston at the time to Japan, it would take you anywhere from two weeks to 16 days for your body to fully entrain to that new schedule. With bright light and darkness scheduled at certain times in advance, you could crush that time down to three to four days.
[00:12:46] Speaker B: Do you know doctor Andrew Hubermandhe?
[00:12:49] Speaker A: No, I don't.
[00:12:50] Speaker B: His specialty is circadian rhythms.
[00:12:52] Speaker A: There we go.
[00:12:52] Speaker B: And like eye light. Like sunlight in the eyes. Anyway, you should look, if you're still interested in that topic.
[00:13:00] Speaker A: If you want to dig, you can find a research paper that I wrote about how we used bright light and darkness with a NASA flight back in the would have been early 1990s to kind of help prepare the astronauts before going into space. Because in space you lose all light darkness cues because obviously traveling around the moon.
And so that's fascinating work, that is.
[00:13:25] Speaker C: So what happened? So you're in, like, I mean, you're in startup throws, right? You are in the thick of it. Then what happened?
[00:13:30] Speaker A: Well, then what happened is I had to make a choice. I had been accepted to an MBA program at the University of Chicago, and we were also starting a for profit entity called Light Sciences, Inc. And I had always dreamed of going to school at Chicago and getting my MBA. And I thought, you know what? There'll always be an opportunity for me to start a business if I want to go down that route. And so I had to make that choice at that point. After two years, it was a deferred admissions. So I made a promise to go after two years, and I wanted to follow through on that commitment and promise and. Interesting. That's the end of that story.
[00:14:03] Speaker C: Yeah. And sometimes, you know, and we've heard both. Right. It was I could always go back to get my MBA. Therefore I went down this track, and yours was just the different, the opposite choice of that.
[00:14:12] Speaker A: Right?
[00:14:13] Speaker C: Very cool. Very cool. So coming out. Go ahead.
[00:14:16] Speaker B: No, I was just. This is just a comment, not a question. I think it's. You're in a really unique position because while you're considered working in the corporate world, you're also touching and interacting and literally funding and helping entrepreneurs like myself. So you really have the best of both worlds. Oh, I do. Your interaction with all the entrepreneurs, and you're literally making dreams come true. So it's like this, this great connection between corporate and entrepreneurship and small businesses all in one that you get to live. And that's. That's amazing.
[00:14:52] Speaker A: It is amazing. And I want to go back to the story you told at the beginning, and I can't thank you enough for sharing your experience, because it just. It makes me feel great about our ability to make a difference. But you came up short a little bit because you said, oh, like, we didn't have a relationship with M and T, but your story started with just a regular transactional relationship with M and T. You're right. And we got to know one another.
[00:15:14] Speaker B: Yeah.
[00:15:15] Speaker A: And it was the basic of that relationship and foundation that allows us to say, well, look, this has gone as we had expected, and it's worth kind of going to the next level. And then, you know, I know the folks you had referred to in the beginning, I'm guessing it was a group from Bandidos.
[00:15:31] Speaker B: Yeah.
[00:15:32] Speaker A: And so we'd known Banditos for a long time.
[00:15:35] Speaker B: So you hit on that. And I think there's one episode where I was talking about my story and I talk about our banking relationship, and I did hit on. While I was sitting across the table with Mickey, initially, he had seen, although I didn't have a lot of history, he had seen, or he was interacting with us on this project. So he knew how I worked and how our company had worked just from that limited time. And you're right. And then having the credibility of Bandidos on the other end, I'm sure that made a difference in your decision to move forward or not. But great point.
[00:16:13] Speaker A: It does. And I tell my daughters all the time, how you do anything is how you do everything. And if you care this much about something that doesn't matter in the grand scheme of things, imagine how much you'll care when something's really on the line.
[00:16:27] Speaker B: So true. And at that point, it's like, okay, yeah, very great. Great point and true. All true.
[00:16:32] Speaker C: So pull us through the MBA at booth. Right. Chicago is their business school.
And then into your early days, because if I did my research correctly, you've only had one employer.
[00:16:43] Speaker A: I've had one employer. Boy, that's a unicorn.
[00:16:46] Speaker C: Yeah, that's right. Yeah, me too.
[00:16:48] Speaker A: That's right.
But it's a great employer, and I was lucky to find a great place to work with amazing people. I didn't have any designs on going into banking when I graduated my MBA.
And I had interviewed with M and TN from Buffalo originally. So I was familiar with the, with the name and the, and the bank, and I met the people and I thought, wow, these are really, really special people. And even if I'm not going to stay in banking the rest of my career, having the opportunity to work with really bright, down to earth, successful leaders, you'll learn something in a couple of years, and then I can kind of move on. And like I said, 31 years later, I still here because I've continued to meet exceptional people while working at M and T. And I've also had a lot of different opportunities at M and T. So I've had really the best of both worlds of being at the same company for many, many years, but doing a whole bunch of different tasks along the way, which makes it feel like being at a different company each move.
[00:17:54] Speaker C: Yeah, that's very true. And I think to pigeonhole a company into one thing, our business, every, all of our businesses have so many different. There's a marketing organization. You're a bank, but it has a marketing organization. There's so many different arms and limbs and thriving parts of the business that all come together to make the whole. And yes, I'm in banking, but I'm marketing. I'm the vice president of marketing. And that's such a great point. And that all of us, we do try to highlight that. I think now we got to start getting our listeners some of the real Auggie smarts that they showed up for.
Just touching on the really mechanical parts, the collateral, and a lot of times on the podcast, I'm called on to deliver the mechanical part of that stuff to start with.
[00:18:43] Speaker B: Mechanical story.
[00:18:45] Speaker A: Yes, that's right.
[00:18:46] Speaker C: Yes. Yes.
Nerd numbers. Yes. We all have a role to play. I just said that, Auggie. Right.
Every podcast has a nerd.
So just give us. I come in as a guy that wants to start a business. I think I have found demand. We talk about that a lot, too. Businesses are created around identifying a need. So I think I found it. And what are you looking at from a numbers perspective, or what would be the best way for me to show up, to get your attention and help me with capital?
[00:19:18] Speaker A: Look, this is why I love Britt's story at the beginning, because it really captures the whole essence of what we look at, and it really does begin with a relationship. And how well do we know you? How well do you know us? Because when we get into any relationship, like you get into a relationship, you assume it's the first day of forever. And so let's just take the time up front to make sure it's gonna work on both ends.
There are the dollars and cents, and there's the analytical piece. You have to have an idea that folks want to support, customers want to support. That's kind of key. You need to be able to articulate what your vision is and where you want your business to go and how you want it to grow and how, you know, debt in this particular stage of your company can be helpful to get you to where you want to be.
And then it comes down to your ability to afford it. Do you generate enough cash flow from your business to repay the debt? Pure and simple. And if you can generate enough positive cash flow from your business to repay the debt, more oftentimes than not, we'll find a way to make that work. But if you're not generating the cash flow in a way that we can clearly see that can, you know, support the debt you want to take on, then we have a conversation about, maybe debt isn't what you need at this point, and then work together with you to figure out the best sort of capital source for where you are in your life cycle.
[00:20:45] Speaker C: And that is a type of counseling that you will provide, even if it means at that particular part of the evolution, sending a prospect away. Right. That's what you could be doing. But is that counseling that you would do or how does that unfold?
[00:20:57] Speaker A: Absolutely, it unfolds by someone saying, hey, I'd like to borrow x. And we say, okay, what would you like to do with those dollars? And then we have a conversation and discussion about, a, how consistent it is with where they want to take the business, and b, can you afford that level of debt for where you are in your progression and in your growth? And if you can't, then it's our job to let you, as a counselor and advisor, to say, look, this just isn't, isn't the right time because you're taking on too much risk that you probably can't appreciate yourself.
[00:21:33] Speaker B: And I can attest to this because one of the banks that I was talking to just, they called and said flat out, no, no counseling at all. Another bank gave us just really terrible options. There you go. And then truly, and then m and t talked to us about, I remember all of the options and what was best for us at that time. And I felt really comfortable because it was like, this is where you are now. This is where you want to be. But let's focus on current, actually very tailored, very customized. Really understood the position we were in, which just was another thing that was just so different than all the other banks that we had talked to.
[00:22:11] Speaker A: Thank you.
[00:22:12] Speaker B: Yeah.
[00:22:12] Speaker A: And we were very intentional in how we do that. And it makes a difference.
[00:22:18] Speaker B: It does.
[00:22:19] Speaker A: It's how it allows us to show up. I know. Mick, you talked earlier about our advertisements. I love those advertisements.
[00:22:25] Speaker B: We do, too.
[00:22:26] Speaker A: The only reason why they resonate the way that they do is because it's how our 2000 employees here in Maryland show up for our clients. Because if it came off as inauthentic or not resonating with how we show up, they wouldn't. They'd just be another tv ad.
[00:22:44] Speaker C: Yeah. And unless people are smart, they'd sniff you out. They do. There's no way that would stand for but a split second. That's what was called out.
[00:22:52] Speaker B: And just for anybody who has seen those commercials, a lot of the times, it's highlighting small businesses in the area that have, and so diverse and that have had success stories from, I mean, ice cream, you know, what do you call factory or two? I mean, you name it. And just a very intriguing, the one.
[00:23:14] Speaker C: Most recently, I think is a massage, or there's one that, gosh, it's helped.
[00:23:22] Speaker A: Me out a couple of the recent ones. Masseuse, we had one that was a metal, a metal die cutting facility in Baltimore City called Fabpro. And he built a beautiful business. And our ability to help him with a transition of ownership was monumental in his ability to take his business where he wanted to. Where he wanted to go.
[00:23:45] Speaker B: Yeah, I love all the commercials.
[00:23:48] Speaker A: They're great. The charmery was a great charmer.
[00:23:50] Speaker B: That's what I was thinking.
[00:23:52] Speaker A: We had union craft. So it's, you know, I don't know. To me, small business is an american story in sort of small scale.
[00:24:02] Speaker C: So before we move on to that too, let's just say you're in a moment and, you know, Mick shows up and I'm right on the verge, you know, mathematically collateral, you know, that risk profile that you're building as part of our conversations, what are some of the intangibles that might really speak to you? Where it could go one way or the other? No, I imagine that you have to go to a committee or there's somebody that's ultimately calling the shots. Right. And inside of the organization. And, you know, when you place the numbers in front of that group, Mick looks like he could go either way. What are some of the intangibles that might have you pitching Mick's business to whoever the approving body inside of your bank or a bank is?
[00:24:41] Speaker A: Yeah, so that's. That's a great question.
[00:24:43] Speaker B: Holy grail question for the.
[00:24:44] Speaker C: That is the holy grail question?
[00:24:46] Speaker A: Yes. We tell our bankers that it's your job to assess the creditworthiness of your clients, and it isn't your job to find opportunities and then present them to others. You need to be as convicted on the ability of that company to warrant the debt as anyone else should, so that when you come in and chat about what you want to do, it's what you want to do, not what we want to do. And it's about what you want to do that is the banker, because you understand what it is that the client needs at this time. And you had talked about some of these intangibles, and I think Brith hit on them in her story.
How much of a relationship do you have with M and T? How long have we known you? How successful have you run other businesses? What other partners do you work with that we've got deep familiarity with that can corroborate with what we believe to be true? And it's no simple, no more difficult than that.
It's relationship building 101. Nothing's more private than your own personal business and personal finances. And so I'm not surprised that we bring a lot of relationship oriented terms to a discussion like that.
[00:25:55] Speaker C: Yeah. Yeah. And if you say, if you've ever signed an indemnified deed of trust, then you know what that's all about, right? Until you've made payroll and signed an idot, that's where the rubber really meets the road does, and then likewise.
[00:26:07] Speaker A: Otherwise, we understand at M and t our responsibility to support you, because it goes the same way.
[00:26:14] Speaker C: Yeah. Quick glossary for the glossary lesson. IDOT. If you blow it, they take your house. So I just want to make sure that there's.
If you need extra collateral that might be laying around, you could collateralize your house. I think we do that, right? Yeah.
So. Yeah, good one.
[00:26:31] Speaker B: Okay, so we touched on the. The charmerie, the. What is it? Fab pro. Are there any other. Because I just. I love the storytelling, and, you know, my story is obviously special, and what m and t was able to do. Are there any other local success stories that you can think of, like recently that M and T was a partner in. And, oh, my gosh, I know there's like thousands.
[00:26:56] Speaker A: Well, there are because of a, how important small businesses are to M and t and also how important the Baltimore community is to M and t corporately. So whether you look at large organizations like the Ravens, for example, or smaller organizations like Teglar, there are stories through and through on any size of business, which we're pretty fortunate to be able to tell. But there's a really common theme through all those stories. It is a consistency between what's being delivered, a passion by the owner, a relationship with the organization, and a commitment to something larger than just making a buck, that the community means something and our region means something, and we want to work together to make it the best it can be.
[00:27:48] Speaker B: That's so true. I mean, everybody we work with at M and T, which is a lot of different people, they're our friends. Like, you're our friend. They are our friends. I mean, Mick and I go out, we have, you know, cocktails and dinners and stuff and inviting MT or vice versa, not for anything other than, like, the true friendships. Like, we enjoy the people that we're working with.
[00:28:08] Speaker C: Right.
[00:28:09] Speaker A: You know what I love is when. Is when we invite you or you invite us, and then you go into a room, then you realize that, you know, 40 to 50 others in that same room that you didn't even know there was a connection.
[00:28:20] Speaker B: So true.
[00:28:21] Speaker A: And that, to me, is where the network effect and the power of our approach to the business really pays off. I mean, to this day, I'm so impressed. And I'm proud when someone stops me, when they realize that I work at M and T to pull out their wallet and show their M and T debit card and say, I bank at M and T. And I said, thank you, because I know you have choices when it comes to banking partners. And I know we have to work every single day to earn your trust.
[00:28:45] Speaker B: Yeah.
[00:28:46] Speaker C: So we did. We shot an episode, I think it was called the bombs that almost took us out. Right. That was one that we shot. So maybe you can help our audience as someone that does have this great perch in looking at lots of businesses in lots of different stages of their evolution, what are some common financial mistakes that you see business owners make? And could you give some ideas on how to avoid.
[00:29:08] Speaker A: Yeah.
Leverage. Leverage, leverage, leverage.
When a business, or frankly, an individual takes on too much debt or take on any debt, you limit the options you have. And if you can operate a company with as little debt as possible. It just gives you a lot more flexibility when things like interest rates change or commodity prices spike. Things. Look, why do businesses fail? They fail because they fail to change.
And what having sort of a very disciplined approach to debt gives you that ability to change on the fly, to respond to market dynamics like, that's it.
That's where I've seen most companies get themselves into trouble.
[00:29:54] Speaker C: Is there a mode, though, on the other side of that where. So, you know, my father would be 103 if he was alive. He was a depressionary baby. When I tell you. He was so conservative, cheap. He wrote his notes on the backs of envelopes that he pulled out of the trash can. So is there also to the other side of that where you could be overly conservative and stifle your growth if you don't infuse capital at the right time?
[00:30:19] Speaker A: Absolutely there can. But there is a role for debt, and there's a role for debt when you've got clear sight about how that debt gets repaid, whether it's a short term working capital loan or whether it's or line or whether it's an equipment facility for a piece of equipment that you know is going to generate profits off the other end, maybe it's for your building or for a home. I mean, all that I would consider very, very productive debt.
[00:30:46] Speaker C: Okay, good.
[00:30:47] Speaker B: Make sense.
[00:30:47] Speaker A: Because it allows you to sort of scale the income and the cash flow that comes from it. Yeah.
[00:30:52] Speaker C: I came from the era of, you know, debt equals bad.
[00:30:54] Speaker A: Right.
[00:30:55] Speaker B: I struggle with that.
[00:30:56] Speaker C: Then you'd save the cash up and you have to wait. And by sometimes, you know, and sometimes some of those windows might have closed.
[00:31:01] Speaker A: Right.
[00:31:01] Speaker C: You miss the ability to jump through the eye of the needle, and it can feel like the eye of the needle depending on what you're taking on. And it's hard, and then it slows that track. And I think that's why I was asking the question about counseling, because you and your team are able to engage in that conversation about, maybe it's not. No, maybe it's not now. And here are the reasons why not now is the right choice of all the choices that you can make as a business owner.
[00:31:28] Speaker A: That's right.
[00:31:31] Speaker B: So what would you say? I think as Mick talked about in the beginning, we want to look at some visionary things and futuristic. What are you seeing as far as trends in the banking industry?
It doesn't have to be relevant just to the small business, but if you have any that are particularly relevant to the small business, that would be great.
[00:31:50] Speaker A: Look, I think, I think fraudhorn prevention, fraud detection, fraud prevention is huge.
[00:31:58] Speaker B: We know that story.
[00:32:00] Speaker A: Yeah, we do. It's just a reality of the digital world we happen to live in.
[00:32:06] Speaker B: Covid, Covid seemed to spike cyber attacks.
[00:32:10] Speaker A: And is that, I don't have any of the specific data on that piece per se. All I know is, you know, fraudulent activities and bad actors doing, doing bad things to good people is a reality of the world that we live in today. And we constantly counsel our smaller and larger businesses on fraud protection. Everything from pay, positive pay to other elements that we have to just make sure that their systems stay secure and do not click on links that you don't know. Right.
[00:32:42] Speaker C: Do you think the, so do you think that the banking industry is able to and is doing the right job with keeping up? I mean, obviously the bad guys are very agile.
They're so agile and they're so driven because there's a lot of money to be made in the land of fraud. Do you think the banking industry can put the controls in place? Can the good guys actually win with the right strategies?
[00:33:08] Speaker A: Well, look, we have historically, the good guys are continuing to win and I'm confident in the industry's ability to stay ahead of it going forward, period.
That's our job. And that's why you choose to bank with us.
[00:33:23] Speaker C: And that's the interesting part of capitalism, right? Because those fraud dollars, at least in our experience so far, are coming out of banks pockets in a lot of spots. So there's a lot of interest and a lot of motivation, inspiration to solving for it because capitalist society puts you in the highest level of risk. If you don't solve for it, you don't have the option of not solving for it.
[00:33:44] Speaker A: But let's talk about something more positive.
[00:33:45] Speaker C: Done.
[00:33:45] Speaker B: How about I do want to just one more comment on that. While I think everybody should bank with M and T, I would say for small business owners, take a look at your bank and make sure because we have a relationship with M and T where if our team sees a particular ach go out over, they're texting us saying is this, we're getting text my sister who does most getting text messages from our on the daily.
And they are always that our team is always bringing to us like, hey, are you guys thinking about this like covering our blind spots before we even ask. So as a small business, if your bank is not doing that, if they're not being proactive, if you feel like you're always reacting, because how would I know as a business owner, I have a business to run. I'm not thinking about fraudulent activity. You should be banking with a different partner, because we have that from M and T, and it has covered us in so many different situations.
[00:34:38] Speaker C: And good part about this podcast is a lot of people don't know. I mean, our job is to pull the COVID off of it and then ask great guys like you questions of how do we get this under control. Talk about the war room a lot. You know, we've, you know, our war room attorneys and accountants and commercial real estate. And without question, bonding for you, our banker. Absolutely part of our war room. And what advice would you give an entrepreneur looking to establish a strong relationship with their bank? I mean, for me, for so long, banking was such a transactional thing, and because I didn't know what I didn't know, and it was literally called a transaction. Right.
But to me, that just bled into the relationship. How do you go about breaking out of the transactional part and absolutely inviting the bank into your war room?
[00:35:26] Speaker A: Well, I think it starts with really it's as simple as just doing it and recognizing that at its basic, banking is a relationship. And like anything in life, if you put the time in upfront and throughout the relationship, it tends to inure to your benefit. Actually, both parties benefits over the long haul. And if you approach it as a transaction, then you'll be treated like a transaction.
Which is why we found over the years that approaching businesses as a relationship serves the business really well, but also serves our business model really well. Even if you were to look at something like our SBA lending, which is a good proxy for our focus and emphasis on small businesses in Baltimore, we originated six fold more SBA loans than our nearest competitor. We were upwards of 220 plus loans, and competitors were far, far below that. It's because it's sort of how we do our business and how we organize ourselves and how we make a difference.
[00:36:29] Speaker C: Is part of that because you have a better line of sight to those opportunities? Or is it that your lending tendencies are a little bit different? Or is it just about more opportunities that has you closing more of those lumps?
[00:36:44] Speaker A: I think it has to do do with our approach to the market. Once again, I'll go back to the story you started with Britt, is it's all based, particularly in a town like Baltimore, where it feels like everybody knows everybody, and you find sort of someone that enjoys working with somebody else, and you get kind of a referral, and that's where that beginning starts. And it makes a big difference. And you can really do that at scale as an organization. It gets bigger because communities have a way of sort of descaling, if you will, to individual relationships. And that's what really has served us extremely well here.
[00:37:19] Speaker B: Yeah. I remember talking to someone, Toby Bazzuto, our friend Charlie.
[00:37:25] Speaker C: Yeah, Toby's awesome, right? Another one of those guys in the room. You walk in, you're like, holy hell, look at all these people. I know, right?
[00:37:30] Speaker A: There's one.
[00:37:30] Speaker B: Toby's one.
He's been somebody I've always admired. And I remember very early on when I started my business, I wanted to take all the advice Toby had to give me a. And he talked about M and T. So right then and there, I was like, hmm, I should be thinking about M and T. But again, it's just like the people and the relationships that he was talking about, his banking relationship with M and T. So I remember that coming from Toby's mouth. I was like, hmm. I should probably. That would be a great banking partner.
[00:37:54] Speaker A: Yeah.
[00:37:54] Speaker C: There's this good. No, no, I just say there's this thing now where I would say young MC Arnold would try to figure it out on his own. Old MC Arnold figures out who's way smarter than he is and calls them first.
[00:38:03] Speaker A: That's right.
[00:38:04] Speaker C: And those trusted partners. Right.
[00:38:05] Speaker A: That's true. And don't you think there's this real year for connection?
[00:38:08] Speaker B: Oh, yes.
[00:38:09] Speaker A: You just want to find a way to connect with somebody and realize that you either know the same person or you're from the same town or community or you're in the same industry. I think that's what it means to be human.
[00:38:22] Speaker B: Yeah.
[00:38:23] Speaker C: Especially on the back of what we've just gone through recently. Right. And the separation that we experience, I think it's gone into overdrive as it relates to that thirst for connection.
[00:38:31] Speaker A: Yeah.
[00:38:33] Speaker B: So what do you see as the biggest opportunities for small businesses in the region over the next few years?
[00:38:40] Speaker A: Yeah. I'm so bullish on Baltimore at this point. In terms of what's in front of.
[00:38:45] Speaker B: Us, so are we.
[00:38:47] Speaker A: You just look at a horrible tragedy like the key bridge and the ability for the city and the state and the counties to really mobilize as quickly as they did to clear the channel, to open commerce so that we're not missing contracts. And then the commitment to what? Invest in a two or $3 billion project, maybe more, to rebuild the bridge. All of that means not only more commerce and less traffic on 695, but it also means more job opportunities for smaller businesses in and around that community that can really help with the rebuilding of something that's going to be pretty iconic.
[00:39:25] Speaker B: Yeah, absolutely. I mean, we literally look out our window at the bridge. You know, Mick and I, we're sure we'll be integral in that build and being here and being able to provide help. And just think of the park we're in right now. Trade point Atlantic.
[00:39:37] Speaker A: Isn't that amazing?
[00:39:38] Speaker B: The amount of jobs for the job creation just here in this park? I mean, we agree. Mick and I tell the Baltimore story everywhere we go. The opportunity here is limitless.
[00:39:49] Speaker A: And also the ability of this region and community to change over time, over the decades is remarkable. The site that we're on right now was where this site needed to be back in the 1930s and 1940s and 1950s. And today this site is reflective of where we need to be in 2020 and beyond.
[00:40:11] Speaker C: Is there any. So as a guy that's got a great line of sight to startups, do you see Maryland? And I'll stick with Maryland because we're Maryland. Baltimore fans. Are we developing any unique or identifiable superpowers that are going to serve us well right. As it comes to competing globally and nationally and locally? Regionally. Do you see anything that's coming out of Maryland that's extremely exciting?
[00:40:34] Speaker A: Yeah, I think it's three things. On the biotech side, it's always been really strong, particularly down the 270 corridor, the work coming out of cyber command and Fort Meade, and the number of government contractors in and around that area. That is a real unique niche that we have here in Maryland that no other jurisdiction has, just because of our proximity to where a lot of those decisions get made. So I think that's a big superpower. And the third one is. Which is which it feels to me like the political leadership and the business leadership in Maryland has pivoted to being one of, we can win. Not only can we win, we're going to be successful, we're going to crush our competitors, and we're going to create a market that businesses want to locate in. And I think it's a welcomed message for business owners and citizens here that really want to take Baltimore and the entire region to the next level.
[00:41:32] Speaker C: Yeah, we travel the country and sing its praise is just, I think the potential. Right. Which can also be a little frustrating. Right. Knowing what the unrealized potential is at times, and being two people that prefer revolutionary over evolutionary. Right. That can be a little bit challenging, but it just seems to be building and building and building and the competitiveness is what you just hit on is something that I'm starting to see again. Right. I think we spent as a city and state that has been on the decline for so long. Right. The b and b and O railroad is Baltimore.
[00:42:04] Speaker A: That's right.
[00:42:05] Speaker C: And few people remember that. And now it feels like there's this competitive piece that's coming back where it feels like it's being done less to us than I remember historically. You know, this woe is me Baltimore type thing. There's a new energy and spirit around it that has definitely a unique feel versus my 30 years of calling. I know we have 800 purchasing customers. So, like you, I'm right in the thick of it with them watching what their businesses are doing, too.
[00:42:32] Speaker B: Okay, any more on that one?
[00:42:34] Speaker C: No, I don't think so.
[00:42:35] Speaker B: Can I segue a little bit?
[00:42:37] Speaker A: Yeah, absolutely.
[00:42:37] Speaker C: We're running porogy through the gauntlet.
[00:42:41] Speaker B: Okay.
[00:42:41] Speaker C: We have demanding audience. Auggie, you knew this was coming.
[00:42:44] Speaker A: I didn't.
[00:42:45] Speaker B: I didn't want to take you off your train of thought. So this is a two in one. I'm going to ask two separate questions. Feel free to answer however you like. The first one being, and they're similar. How do current economic conditions affect the availability in terms of business loans for startups? And then can you discuss any recent trends in the startup financing landscape that entrepreneurs should be aware of?
[00:43:08] Speaker A: Okay, so what kind of trends? Trends are beneficial to startups in general. I think the economy has been on a pretty good tear of late. I mean, just last couple of days, the market's gone up significantly. Interest rates are still a little high, which can dampen the demand for loans. Although what we're seeing now from public statements is there could be a couple of net rate hikes, but going the other way decreases, decreases in rates over the next several months, maybe over the next year. And that's going to, I think, just make credit more available to small businesses and entrepreneurs in general. So that should, I think, help fuel some of that activity, which I think is positive.
You know, there's no. This is to your second question about what should entrepreneurs think about when it comes to financing? There is no one size fits all. You know, in some cases, debt, I might be a solution or an option. In other cases, you know, just plain old capital. And equity is what's needed to help start or to address a shortfall that a business is having right now. So it really depends on the individual industry and the individual circumstances of the customer.
[00:44:21] Speaker B: And I think important, which we talked about, is the ability for M and T or any good bank to come in and help and consult, because some of us, like myself, I didn't know what the best option was. I didn't even know what my options were. So having someone say, let me walk you through and explain what we're even talking about here. And just like the 101 of it when you're getting started, because everything's so overwhelming at first, is so helpful.
[00:44:48] Speaker A: It's about just giving you options that you've got a choice about how you want to move forward. There's a trade. There are no free lunches.
[00:44:54] Speaker B: No.
[00:44:54] Speaker A: So it's a trade off.
[00:44:55] Speaker B: Right.
[00:44:56] Speaker A: And you're in the best position as the business owner to know what tradeoffs are worth making and then how we can help support you in that decision.
[00:45:03] Speaker B: Yes.
[00:45:04] Speaker C: Yes. I just thought of this question. This is not one we've talked about, but at least in our industry, and I think a lot of industries, there seems to be a tremendous amount of. So talking about all the different financing options seems to be a lot of private equity money that is in play right now. And what does that mean? This is me, sir, but you're just watching me learn real time as I think of new questions. What does that mean? Or how does that affect you as a regional bank? So for example, Arnold packaging decides to sell to private equity or get rolled up, wrapped up. What does that look like? And then one step further would be how do you as a banker, M and T, in your team, how do you engage in that conversation to help someone like me through that process?
[00:45:45] Speaker A: Sure. Just a.
[00:45:47] Speaker C: So now we've taken from startup to.
[00:45:49] Speaker A: I got it. Let's just talk about the realities of the banking industry. So do you have any ideas about. I joined the banking industry in 1993.
Any idea how many banks there were in the United States at that time?
[00:46:02] Speaker B: I have no clue.
[00:46:03] Speaker A: There were probably between 14 and 15,000 banks.
[00:46:07] Speaker C: Wow.
[00:46:07] Speaker A: You know how many banks there are today in the US?
[00:46:11] Speaker C: No.
[00:46:12] Speaker A: Four to 5000.
[00:46:13] Speaker C: Wow.
[00:46:13] Speaker A: So there's been dramatic consolidation over the past 30 years as other sources of capital have found their way into the market.
So a big piece of it is just frankly, on the one hand, it's good because it gives business owners and entrepreneurs other options for capital and for financing than they otherwise would have had if they're only relying on banks. So I think in that case, having the options are positive. Now, as I had said earlier, there are no free lunches. And so if you're going to to decide to partner with a non FDIC insured commercial bank, there are certain trade offs that you need to be willing to make, and those tradeoffs could run the gamut from ownership to stock to rates that are paid and so on. I think it's just this notion that there is no free lunch. What might look like a more attractive deal as you sit here today, may really belie the kind of risks that you're accepting or the type of control that you. That you're implicitly giving up by choosing to do business with other, other parties.
[00:47:18] Speaker B: Absolutely.
[00:47:19] Speaker C: Yeah. Good counsel, as always.
[00:47:22] Speaker B: Any. Any last questions for you?
[00:47:24] Speaker C: No, I don't think so.
[00:47:25] Speaker B: So then we're going to punt it back to you, Auggie, with any last words of wisdom or anything you think worth talking about to our audience before we leave today.
[00:47:37] Speaker A: All banking is local, and relationships matter. And I would just leave you with this idea that how you do anything is how you do everything. And showing up in a way that supports your business and supports your family and supports your community in a positive direction, you'll find plenty of. Plenty of followers and plenty of support and plenty of help. All you got to do is start asking.
[00:48:03] Speaker B: Awesome.
[00:48:03] Speaker C: There you go. Well, audience man, you are your audience. You are welcome. Today, we got a pro of pros in here showing you what's what.
[00:48:10] Speaker B: Auggie, thank you so much. We've been trying to do this for a long time, so I'm finally glad we made it happen.
[00:48:17] Speaker A: Can I ask one last question?
[00:48:18] Speaker B: Yes.
[00:48:18] Speaker A: Tell me about Moxie. Where's the name from?
[00:48:21] Speaker C: How's she doing?
[00:48:22] Speaker A: I can't resist.
[00:48:23] Speaker C: Well, the episode's about to get really long, folks. Hold on, Tommy.
[00:48:28] Speaker B: Here's an episode time blower she just surpassed two months.
[00:48:33] Speaker C: Is it ten weeks today?
[00:48:34] Speaker B: I think it is ten weeks today. She's doing awesome, and she will be banking with m and T in years.
[00:48:41] Speaker A: Thank you very much.
[00:48:42] Speaker B: She's running her own business.
[00:48:44] Speaker C: Yeah. So I think it's walking. Next week, she'll be buying for a d one soccer scholarship the week following, which should mean banking five years from now. So if you. You can. I think we're planning the relationship seed right now.
[00:48:55] Speaker A: There we go.
[00:48:57] Speaker C: And we know her. Yeah, she's doing great. It's been. It's been fun. It really has. I mean, I would say there's some more intel coming, but we have separated that and divided and conquered parenting as we do most things. And we're each doing half of the whole, which is a really cool way to do it.
[00:49:13] Speaker B: But in honesty, we probably will have something set up for Moxie with M and T, like, very soon.
[00:49:20] Speaker A: Yes.
[00:49:20] Speaker B: So that will be happening. We have a call about that tomorrow, I believe.
[00:49:24] Speaker C: Yeah, but she's doing great. Thanks for asking. It's been fun.
[00:49:27] Speaker A: I think. You know Matt Calhoun. Give Matt a call. He'll help you out. Okay. He takes care of our retail customers.
[00:49:31] Speaker C: We do.
[00:49:31] Speaker A: We'll do.
[00:49:32] Speaker B: Yes.
[00:49:33] Speaker C: Well, Auggie, again, thank you so much. This has been great. I'm glad we got this connected. And, boy, I think our, I hope our viewership takes out as much as I did.
[00:49:40] Speaker A: Hell, I'm good.
[00:49:41] Speaker C: I'm ecstatic. So thank you.
[00:49:43] Speaker B: Thanks.
[00:49:44] Speaker A: Thank you.
[00:49:45] Speaker C: Thank you so much for joining us again for another episode of Love and Business. And thanks again to our great friend Augie Chiacera from M and T. What a great interview. And I sure hope, we sure hope that you got a lot of takeaways, whether it be inspirational or just the nuts and bolts of where to start if you're, if you're trying to get capital or some dry powder to launch your business.
[00:50:06] Speaker B: And truly, for me, reflecting that could have sounded like a bit of a commercial about MTA, but it's not. It is the truth. And they seriously have been so instrumental to our company's growth. So I just, I just say that to think, if you are starting business or you're an entrepreneur, you're thinking about it. Make sure you're thinking about your banking partner and take to heart what Auggie had to say because it's true and it's meaningful. Lastly, if you have not subscribed, please take the 10 seconds to subscribe. You'll get notifications about similar content. And also, it really just helps with the growth of our channel. And we really care a lot, and we do put a lot of time into this, so we would really, really appreciate it.
[00:50:49] Speaker C: Thank you so much. We're working hard bringing it and we want to see you back here soon. So thanks again, and please, please subscribe.
[00:51:00] Speaker A: Welcome to H. Romney.
[00:51:01] Speaker C: Rodney talks for the superstar tonight. Tonight, incredible, credible.
[00:51:12] Speaker A: You, our.
