Three Values Emerge in Chaos: Marlin’s Pandemic Story

by Jeffrey Hilzinger 2020
As a small business lender, Marlin Capital Solutions was in the middle of the storm when it came to the coronavirus pandemic’s effects on the economy. Jeffrey Hilzinger shares Marlin’s story and outlines how COVID-19 has fueled the company’s transformation.

Jeffrey Hilzinger,
President & CEO,
Marlin Capital Solutions

As a small business lender, Marlin Capital Solutions was in the middle of the storm when it came to the coronavirus pandemic’s effects on the economy. We not only faced the effects of the pandemic on our own workforce, but we also witnessed the effects on our customers’ livelihoods.


It was heartbreaking to see the impact on many of our customers and other small businesses; The U.S. Chamber of Commerce estimated in June that one in five small businesses was temporarily or permanently closed as a result of the pandemic. Many of the businesses were in industries or facing circumstances that could not have survived the grip of the pandemic, no matter what strategies they tried. Those losses weigh heavily.


It’s been a scary time for many people — and there continue to be many unknowns. Yet even with those losses, we’ve seen incredible strength, resiliency, and creativity in small business owners and operators around the nation. Many companies gracefully pivoted from their pre-COVID-19 business models to embrace a digitalized, contactless new normal. Marlin’s portfolio performance is proof that many of our customers are successfully evolving to meet their customers’ needs.


Marlin’s Pandemic Approach


Just like our small business customers, we underwent a transformation at Marlin. Thankfully, our disaster recovery plan did its job well. We withstood the storm by focusing on providing value to our customers in the way they needed it most — exactly like our customers are doing for their own customers.


When the pandemic first occurred, we upheld two priorities: First, we wanted to protect the health and safety of our employees. Since mid-March, our entire company has been virtual to allow our employees and their families to shelter at home.


Second, we had to safeguard the financial health of the company. Like every business, we made several critical decisions that protected that financial health in the face of unprecedented uncertainty. Some of those decisions included furloughs and pay cuts taken by senior team members. We also made headcount reductions to lower costs and prepare the business to accelerate toward digitalization. Those moves, coupled with our access to funding through Marlin Business Bank, allowed for a stable financial profile.


Our positive third- and fourth-quarter results reflect much of the heavy lifting and difficult decisions in Q1 and Q2. Now, we’ve been able to turn our attention back from protecting and restructuring the businesses to focusing on growth. Like many of our customers, it feels like we can come out of the pandemic stronger than ever before.


Transforming to Emerge Stronger


We witnessed how the pandemic put our customers through the wringer. It forced companies to get lean — to focus only on what’s most important and let go of the rest. At Marlin, we went through a similar reckoning. Since the pandemic began, we have learned that the following three values are irreplaceable to our business:


1. Commitment to the success of our customers.

The pandemic gave us even more proof that our customers make us strong. We know that most of our customers are great businesses with excellent credit character — and every single one needed and deserved our help to get through this global crisis. So, we turned our attention to supporting our small business customers.


To help our customers get through the storm, many of our front office employees rolled up their sleeves and pitched in. We temporarily transferred people to help process almost 6,000 requests for payment deferrals, and they helped implement a PPP lending platform.


It’s clear to me now as I look back on the beginning stages of the pandemic that our approach to focus on supporting our customers made a big difference — not only in terms of Marlin’s current and future success, but also in terms of our customers’ ability to withstand and even grow during the crisis.


2. Embracing the path to digitization.

Early in the crisis, we decided to use the upheaval as an opportunity to dramatically accelerate our digital strategy. It was a call to action. We don’t ever plan to return to how things were done before. And that’s on purpose.


We view digitalization as critically important to Marlin’s value proposition because it allows us to act with speed and convenience on behalf of our customers. We can serve them better, more efficiently, and even offer more programs. This rapid acceleration to digitalization is something we’ve seen mirrored in our own customers’ businesses. With e-commerce, contactless payment, automation, and more, businesses are finding ways to provide more value to end users than ever before.


At Marlin, we’ve transformed many of our manual processes for both employees and customers into digital platforms. It’s a lot of work, to say the least, to turn a manual-driven company into a digital-driven company. The initiative required us to invest a significant amount of the cost-savings from restructuring our front office to add resources in IT development, data science, business enablement, project management, and training.


Investing in skill development for Marlin employees alone is quite the undertaking. But we’ve made significant progress. We also reduced our pre-pandemic origination costs by almost 50%, and we will be able to offer micro-balance products that would not have been cost-effective otherwise. By early next year, we expect to have a fully digital path available for our equipment financing and working capital loan products for both our partners and customers.


3. Quality leadership makes all the difference.

To a large degree, what served us well in these times is universal and fundamental truths about good business. In particular, we relearned the importance of leadership and making decisions based on our values. Without Marlin leaders’ deep commitment to the future success of our company and our customers, we would not be positioned as well as we are today.


In a way, the pandemic has taken us back to the very basics of leadership and business: Do you have a mission and vision that inspires your employees and customers with a sense of higher purpose? Do you build trusting relationships with your colleagues by communicating frequently and honestly? The only way for companies to survive hardship is to live out their values in both good times and bad. Without the effort of laying the foundation of trust in your values and trust in each other, you won’t be able to weather the storm.


Marlin’s pandemic response has followed the trajectory of many of our customers: We’ve gone from a defensive posture to playing offense again. As our customers were making critical decisions about cost reduction and pivoting, we faced the same dilemmas. Thanks to those difficult decisions, we are better positioned to provide support to our customers, move efficiently via digitalization, and live out our values no matter the circumstances. We are proud of the trajectory of our third and fourth quarters, and we are confident Marlin will come out of the crisis as a much stronger competitor to better serve our partners and customers. And we could not have done that without being inspired by the resilience and ingenuity of our own customers.

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