Seizing Opportunity: Crossroads Celebrates a Decade of Determination

by Rita Garwood March/April 2016

Launched in 2006 with the sole purpose of financing titled equipment, Crossroads Equipment Lease and Finance has expanded to become Crossroads Capital Group — a company that now also syndicates loans through First Continental Capital Group and provides solutions for small businesses through Crossroads Small Business Solutions. Celebrating its 10th anniversary this year, Crossroads President Jeff Macartney attributes the company’s success to its tenacity.

In 2006, Crossroads Lease and Finance began with one employee in a 100 square foot office. With about $500,000 in new business volume originated in its home state of California, the new venture operated at a loss during its first year in business. Today, Crossroads has dramatically expanded from its original focus of financing titled equipment such as trucks, trailers and buses. Now operating on a national scale, Crossroads Capital Group originated $206.5 million in equipment-related volume in 2015 and employed 70 staff members.

Never Lose Hope

President Jeff Macartney attributes the company’s success to its tenacity. “When we see a valuable opportunity, we don’t give up until we have taken advantage of it,” he says. The California On-Road Diesel Program, which provides a cash reserve to assist California-based businesses that are upgrading trucks to meet state BPA regulations, provides the first example of Crossroads’ determination.

“We filled out an application, sent it in, and we were told that we weren’t qualified to become part of the program because you needed to be a bank to be qualified,” Macartney recalls. But instead of taking no for an answer, Macartney did some research and found that only 31 banks had signed up for the program. Going one step further, Macartney and his team called each bank to see if they would fund an individual owner/operator who needed to replace a truck to comply with the new California emissions standards.

“Every single one of them told us ‘no,’ they didn’t do individual truck owners,” Macartney says. Seeing that the program really would not achieve its goal if participants were limited to the current banks that were involved, the Crossroads team got to work. Macartney flew back and forth from Sacramento, went to the board meetings of different agencies and hired a lobbyist. “In November of 2009 we got the law changed so that if you had a California lenders license you could become a participant,” Macartney says. Since that time, Crossroads’ participation in the program has contributed more than $175 million in volume to the business.

Crossroads Small Business Solutions

After discovering many equipment finance clients had a need for other types of financing, Crossroads set a new goal in February 2013 to acquire a license to make loans guaranteed by the U.S. Small Business Administration (SBA). Thanks to Roxann Burns, now president of Crossroads Small Business Solutions, and Crossroads’ legal team, Crossroads successfully purchased an existing license and was approved for its transfer.

“If we think something is a good opportunity, even if it takes us 30 months, we’ll keep working on it until we get it done,” says Macartney. Crossroads Small Business Solutions provides SBA loans for business expansion and growth, including working capital, equipment, commercial real estate, franchise financing and business acquisition.

First Continental Capital Group

In November 2015, Crossroads launched First Continental Capital Group, a telesales division for syndicating equipment loans up to $50 million. First Continental leverages Crossroads’ transportation background while expanding to all collateral types with a national reach. Thanks to this business, Crossroads will no longer need to turn away transactions that don’t fit into the titled equipment or SBA categories.

“It’s a way for us to make sure we don’t waste origination and credit review costs that have been spent looking at a transaction only to find out it doesn’t fit in that business unit,” explains Macartney. “Additionally, that unit is going to originate transactions that probably will flow over into the SBA business, so it gives us the opportunity to cross-sell. The product that we sell is all the same. Our inventory is money, and we sell long-term financing, but we have different focuses.”

Functional Efficiency

Crossroads has decided to operate its business units functionally, with the same credit, accounting and IT teams involved across all units. “That will give us the ability to make sure we are consistent,” Macartney says.

“From a functional perspective, the departments align and have better synergy across the board,” says CFO Robin Boone. “And as we find more efficiency, we become more functional, which helps with profitability.”

The new business divisions created under the Crossroads Capital Group have other benefits as well. “Since we have more options to offer to customers, it also creates diversification from a portfolio risk standpoint,” Macartney explains. “Today, 100% of our portfolio is titled ‘equipment.’ In the future, that will be a percentage, but it will be well below 50%, and we’ll have our risks spread across a variety of industries, which is beneficial to managing profits in the future.”

Customers & Employees First

As Crossroads continues to grow, its leaders strive to ensure continued success by focusing on the people who really matter: customers and employees. Macartney says that putting the customer first is his top priority. “That doesn’t always necessarily mean you do what the customer asks, but you always think of things from the customer’s perspective. How is it affecting them? If you were in their shoes, what would you want someone to do? We always want to show dignity, respect and integrity. We must be accountable, entrepreneurial and have a passion for what we do — treating everyone we encounter how we would want to be treated.”

Crossroads extends this golden rule to its employees, many of whom have been with the company for a number of years and have grown into higher-level positions. “We look at our employees as not just a number, but people,” Macartney says. “What we do and how we do it during their eight hours or more here in the office effects the rest of their day. My goal is for people to be happy 24 hours a day. It doesn’t always happen, but that is the goal.”

CIO Austin Engel strives to ensure all of his team members own their world and feel connected to what they’re doing. He doesn’t want his employees to feel like they’re just told what to do. “They’re connected to their process. They have control over their environment and what they do,” he explains. “I think it makes for a better working relationship in that they have feedback and we have open communication with ideas, and strategic planning is done as a group, which leads to better understanding and better buy-in at the different levels.”

Engel believes employees who are working toward their own goals as well as the company’s goals make better employees. His individual ownership approach allows Crossroads’ IT team to be creative and gives team members the ability to make mistakes while they learn and try new things.

Boone helps her employees find their way, develop their skills and grow. She empowers her employees to make decisions so they feel comfortable taking a leap of faith when they know they’re putting the customer first. “They feel empowered in taking accountability and ownership, and that creates a sense of pride in the work that they’re producing, so they’re willing to stand by it and to show their talents.”

“I’ve read a lot of books, watched a lot of different CEOs, leaders and presidents and have definitely come to the conclusion that I can’t be any of them,” Macartney says. “I have to be myself. I learn a lot from reading books and listening to other people, but trying to emulate one individual that you think is very successful I think is flawed. So I am who I am, and I try to become better every day.”

Taking this day-by-day approach, Crossroads is sowing the seeds of future expansion. “Every year has been something different,” Macartney says. “We are looking to start a factoring company. The groundwork will be laid this year to be able to operate that business in 2017. What comes after that I’m not sure, but if I’m here, something will come after that because I enjoy the challenges of doing different things as we go forward.”

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