Brad Leach

Brad Leach is senior vice president of Lighthouse Financial Corp. in Greensboro.
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So Elliott called Brad Leach, senior vice president of business development at Lighthouse Financial Corp. in Greensboro, a fellow he'd known from years ago when Leach was Elliott's banker at the old NationsBank, now Bank of America.
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The overhead, along with the inherent risk of working with companies that may be in a shaky financial situation, accounts for the cost premium that exists when borrowing from an asset-based lender, said to Leach, the senior vice president.

That premium varies — sometimes it's not much at all, he says, depending on negotiations and the quality of the collateral. But typically, borrowing from Lighthouse might cost 3 to 5 percent more than at a bank, if the borrower could qualify.

About half of Lighthouse clients are in the Triad or in North Carolina, with others in Georgia, Florida or the Midwest. Lighthouse customers generally have between $5 million and $50 million in revenue, and borrow from $500,000 to $5 million.

Leach said because there may not be much cash flowing to assure the loan is repaid, Lighthouse is very careful as it first evaluates inventories and receivable as collateral and then monitors them during the life of the loan.

"Banks are typically going to spend less time monitoring the collateral because they're cash-flow lenders," Leach says. "Asset-based lending has a little more art to it, in figuring out how to set advance rates to get the customer what they need while maintaining prudent loans for Lighthouse."

While one of the big challenges for Lighthouse over the years has been competition with banks who, in headier times, are more aggressive in pursuit of some of the same clients, Leach says asset-based lenders and bankers work together because many times clients can move between them at different stages and for different purposes.