We sat down with our resident experts, Joe Humphries, Market Executive (pictured middle), Adam Nalls, Senior Vice President (pictured left) and Mike O’Grady, Senior Vice President (pictured right) to better understand the unique nuances and complexities of the government contracting industry. Both Joe and Mike have each been serving the unique financial needs of the U.S. Federal Government Services companies for over 30 years; and Adam has a solid 10 years in the industry. They’ve been in this space long enough to know the ins and outs of almost everything.
What do we look for in a client?
Joe: Our ideal client is someone who values capable and experienced relationship managers who understand the industry and need a reliable financial partner to provide consistent access to capital. That’s our bullseye. We know the industry deeply and broadly and we try to convey that.
Why would a client choose Atlantic Union Bank?
Joe: Commitment to this industry throughout the cycles and throughout our organization is really important. What happens a lot is a contractor will work with a bank who doesn’t know the industry like we do and lose contracts and, in turn, lose money. It’s like a relationship. They’ll start dating and get married and when things go badly, the bank will want a divorce. (laughs)
Adam: Good analogy, Joe! And you’re right, I’ve seen it happen. We, on the other hand, are very careful about who we take on as a client. We get to know them. We’re committed to the businesses we bank.
Mike: And, we know this market. If the politics of the day affect business, like a government shutdown for example, our management team is on top of it. We mitigate risks and treat our partnerships like we would a financial portfolio.
What makes us different?
Joe: The color of our money is same as any other bank’s money. But the dedicated commitment of capital to the industry and commitment to our clients is paramount.
Mike: We’re constantly learning. We know the trends in the industry. We can advise clients on strategies that they can use to differentiate themselves from the competition. Our ability to talk their language and understand trends is what we do best. Other banks tend to be focused upmarket. Our solid strength is working with companies with revenues in the $20-200 million range. That’s where we can add a lot of value. We’re a regional bank with big bank capabilities.
Adam: That’s what makes us the bank of choice for many growing middle market government contractors. We can provide working capital finance to these companies, in addition to helping them through the process. We also provide leveraged cash-flow loans for acquisition financing. Many of our clients have adopted M&A as part of their overall growth strategy – acquisitions bring additional clients, capabilities and pricing competitiveness.
One of the hot topics in this space is how a client prepares an exit strategy. What strategic advice would you give firms facing these opportunities/challenges? How does our team help guide them with the financial aspects?
Joe: The conversation starts with a few questions: What’s your long term goal? What are you going to do about it? Are you a seller or are you a buyer? If you’re a buyer, here are the things you need to think about. If you’re a seller, you need to get ready for sale. You wouldn’t take your car to the car dealer to trade it in without going to the car wash first, right? Same with your business.
Adam: Exactly. You need someone to come in and go through the due diligence routine to make sure everything is in order. You need to start the planning process years in advance.
Mike: You need all of your paperwork in order too. Estate planning. Succession planning. These are all things you’d need to start thinking about ahead of time. Usually 2-3 years out. The key is maximizing the value of your company, then trying to retain most of what you receive. A good wealth management person can help.
We’re dedicated to the success of the GovCon industry - over $1B in commitments and 100+ years dedicated to the GovCon industry.
If you’re looking for a capable, knowledgeable financial partner that can provide consistent access to capital for growth, acquisitions or recapitalizations call us at 571.405.2661 to start the conversation. We have 15 people dedicated to banking successful companies in the government services industry.