Paul DeLuca is a successful corporate finance executive, having completed 100s of finance and M&A transactions over the years. As CEO of Meritus Capital he delivers unparalleled results for the Staffing, Transportation, Oil & Gas, Manufacturing, and other business-to-business sectors. Paul has extensive experience and contacts in the corporate capital markets and the industries our fund participates in. He has successfully started and sold a number of companies. At Meritus, he is the principal decision maker on finance transactions. In addition to serving as CEO of Meritus, Paul's keen business finance and operations insight is utilized on various corporate boards.
Everyone has a different start on their (hopeful) road to success. Some valiant, some inherited, some humble; So, what is his story? How did he get to where he is today? What can other success seekers takeaway from his entrepreneurial focus?
Question: What is your back story; how did you come into this business in the first place?
Answer: "Well what I tell people everyday is that we Meritus Capital are different, and one of the first things I tell them about my background is that I completely understand their situation because I'm an entrepreneur myself. I started my finance business after having used a factor to grow my first company, and it worked very very well. By using an Accounts Receivable Finance Company, my business took off and I had a number of years of excellent success. I grew the company to over 80 employees within a 6 year period. I later had some market challenges and shut down a section of the business and sold off the rest. I decided I wanted to be able to help other entrepreneurs navigate the mind field of financial options and learn from my experiences. I also wanted to enjoy the success of being able to help people really grow their own business just like I had, and so that's when I got into the finance business. I knew that I could really relate to people. Instead of them sitting there talking to a banker that is going to say no 95% of the time, I'm here really to find a reason to say yes. That's basically the thing that sets us apart. Tell me your challenges and let's find a way to finance a growing business.
So, how I got into the business is this: I used this same kind of financing to go from startup to 90 employees and I grew it entirely from receivable financing. After 7 years, I successfully sold it."
Instead of them sitting there talking to a banker that is going to say no most of the time, I'm here really to find a reason to say yes. That's basically the thing that sets us apart.‚Äù
Question: So we see now what drew you to this business, now how would you explain to someone how you are different?
Answer: "The whole idea is that we are different because we are not banker's; we come from an entrepreneurial background. I think that's why I tell that first story. To start to get a rapport with them, I get them to start talking about themselves, as far as: 1. Their Background 2. What they are doing now and 3. Why and how they have got to this point. Once they have done that I try to make sure they clearly understand that I completely get where they are coming from. "
Question: When people come to you for help, how do you usually react? Do you turn down deals often?
Answer: "That is I think the key. I don't easily turn people away as I always look hard for ways to creatively make the deal work. I am passionate about figuring out ways to make a business work for people, so instead of finding a reason just to say no, I would much rather spend some extra time; sometimes a LOT of extra time, to figure out how we can get through the challenges and be able to still finance the company. Perfect example is the deal we just closed. It is a nurse staffing company that had gone through the downturn and they were not growing. They were with a bank line that was constricting their growth, and in fact the bank was pushing them to get paid off. They had huge growth potential now because the contingent nursing industry is really picking up again. We were able to, instead of just saying sorry no, there is not enough money to buy out your bank, we were able to negotiate with the bank and that gave them a temporary buy down. It paid off most of their line, and the rest of it will come over time. Immediately in the first week we were able to offer them an extra $50,000-60,000 liquidity so they could grow their business."
I am passionate about figuring out ways to make a business work for people, so instead of finding a reason just to say no, I'd much rather spend some extra time; sometimes a LOT of extra time, to figure out how we can get through the challenges.
Question: It seems that you've gained quite a lot of experience over the years in this area. So, how many years have you been doing this, and how has the business (the A/R funding industry) changed since you've started?
Answer: "I went into the finance business in 1997. I can't believe it has been almost 20 years! So, my reflection of the past years in my industry of financing receivables is this: It is absolutely more relevant now, in that banks are not lending near as much as they used to prior to the downturn. Also the factoring industry is growing by double digit growth simply because we understand how to finance growing companies, and the typical banking community does not finance small to medium sized growing companies."
Question: Over your career you have financed many different types of companies, so what has been your main focus?
Answer: Well, I have financed hundreds of transactions, with temporary staffing companies being the majority of those closings. They have become my main focus. I have also consulted in over a billion dollars of mergers and acquisitions specifically in the staffing industry. And I think specifically, that means we understand what it means to create value, enterprise value in a company, so not only are we helping them grow now, but we also expect and hope that they will use our capital to grow their business and build value over time. With our help many have created businesses that created the first wealth in their lives. I think the other thing to remember too about my team understanding how the clients feel, is that when I started out I had no capital. I started out my business with $4,000 dollars; that was my total investment, and I immediately went out and started selling. I got clients but I had no way to be able to grow and pay the employees, so when I contacted a local accounts receivable lender he gave me a large line and I immediately started adding employees and continuing to grow. That's how I was able to grow to 90 employees and I never had to give any equity of my business away. So that's my reflection of the past 17 or so years. When I really reflect back on what got me here‚Äù and why I love working with t
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