Mike Semanco: Hands-on Collateral Management

By Bud on September 30, 2008 TrackBacks (1) Comments (4)

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Mike Semanco, President of Hennessey Capital, outlines how Hennessey assures themselves of the collateral value of their clients' working capital assets. Hennessey uses advanced systems to track performance down to the invoice level.

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Filed under: Financing Innovation | Hennessey Capital | Huntington Woods, MI | Michael Semanco | Working Capital

 Hennessey Capital focuses almost exclusively on working capital finance including working capital lines of credit and factoring. They target "pre-bankable" companies that do not yet have the track record to qualify for bank financing. In this context, the question arises as to how Hennessey assures themselves of the collateral value of these companies' working capital assets. Mike Semanco, President of Hennessey, provides the following insights:

  • Often, pre-bankable clients do not have the systems in place to track performance of things like receivables. Hennessey has these systems, and with the client's help uses them to gain a more accurate view of the client's business.
  • Once Hennessey has been tracking performance of various assets, it can adjust the terms under which it offers financing to clients. If the assets perform more favorably than anticipated, the financing terms can become more favorable.
  • A major issue for firms in Fall 2008 is access to capital. Due to its tracking systems, Hennessey is able to serve a wider client base than most banks.
  • Hennessey makes its loans using its own capital as well capital provided by other financial institutions.

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» Hennessey Capital from Learning Remix, Fall 2008

I found this video interview on the michiganinnovators.org site.  It is with Mike Semanco who is the president of Hennessey Capital.  This company focuses on working capital finance, primarily for newer companies that banks often pass on.&nbs... Read More

Tracked on October 20, 2008 2:33 PM

4 Comments

Sheri Emmons on November 2, 2008 10:15 AM
A small business can experience cash flow fluctuations throughout the course of business. When the economy is on downward spiral companies need assistance with their debt. When a company has accounts receivable schedule it can act as an asset because the debt will be paid back. A small business can have assets that range from A/R, inventory, equipment, property. Mike Semanco talks about how his company can assist a small business on how to manage their assets correctly by implementing a computerized system to monitor their debt. Also the assets that are consistently being paid month after month can actually increase your ability to receive an increase financial assistance. The company can view what inventory turnover a small business has and how delinquent their A/R customers are. Before this interview I didn’t realize how much a collateral management company can assist a small business. Some small business owners are not always educated in a computerized system that can evaluate your company’s wealth and ability to collect their debt. This assistance is great for the small business that doesn’t qualify yet for the financing through a bank. As an inspiring entrepreneur I have always been concerned about financial my plans. Having the knowledge of collateral management allows my business plans to have a hope of survival.
Jennifer Ahlers on November 16, 2008 8:55 PM
The first impression of this interview made me kind of weary that a company such as Mike's is so involved with my business. However if you don’t mind someone being so involved in knowing so much about the financials of your business, then I believe this company could be a true asset to you anyone's business. I think it is very helpful that his company helps track the assets of this business. By them tracking the assets of your company they can monitor what they think is a safe investment in your company. I think this is a great idea because this can help the entrepreneur from getting in too deep. We would all like to think that we have a plan to pay our loans back but sometimes we think more optimistically than we should. Mike Hennessy's company looks at our financial status in a non bias way and is only going to finance as much as they know we are capable of repaying. Not only does a companies like Mike's allow us to stay grounded with how much we are allowed to finance, I would think they are able to guide the small businesses and give them advice. I also appreciate companies like Hennessey Capital because it offers entrepreneurs who are not able to get financing through a bank additional options. If it were not for companies like these we might not see so many small businesses here in Michigan. Jennifer Ahlers
Brock Tobias on November 17, 2008 11:59 PM
I loved the concept that Mike Semanco has come up with, in regards to his company Hennessey Capital. A lot of small businesses that want to get their feet off of the ground would really benefit from something like this. It gives them an opportunity that they might not have had because if they didn’t qualify for bank financing. Hennessey Capital also will help you realize how valuable your business can be, the fact that they take such an in-depth look at all your assets and then set the amount that they are willing to finance based upon the assets is great because it gives the entrepreneur the chance to really pay the financing back, it is a more realistic goal. Another great feature of Hennessey Capital is that they can really help you take a look at inventory levels, what is being bought, how quickly the company is getting paid, and who is not paying their fees on time. It is a great way to identify the customers and where the entrepreneurs can make chances that will help them in the long run and make it easier for them to be successful. His company is great for someone who wants to be helped out, it’s a lot more hands-on than a bank would be, it really seems like he cares about the business that his company has invested in. I really think that the systems that Hennessey offers its customers that track performance of assets such as receivables is a great help to the company as well. If I were looking at starting up a business and needed it to be financed, I would most definitely take a look at Mike’s company. It really seems like it would be an asset to a new entrepreneur who are about to get their feet wet.
Dariusz Seklecki on November 18, 2008 5:22 PM
Hennessey Capital is a company that specializes in giving small businesses loans who may not have the capital built up to fund the venture. “Often, pre-bankable clients do not have the systems in place to track performance of things like receivables. Hennessey has these systems, and with the client's help uses them to gain a more accurate view of the client's business.” The company funds it’s loans through their own capital. I would like to know how do they decide who to give a loan to. Do they have any special requirements.

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