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Brian Caswell has a message for entrepreneurs who say they are frozen out of traditional bank lending: There is hope.
Caswell wraps the hope in Cazley Financing Solutions. It's a Sarasota-based firm that raises money from private investors, mostly in small chunks of $10,000 or so. Then it divvies up the funds in loans to a group of previously screened companies.
“We're in the business of selling money,” says Caswell, a onetime commercial loan executive for Bank of America. “We want to make loans to businesses.”
Caswell, 34, founded the firm in 2008. It has since raised and dispersed $1.8 million, including $175,000 of Caswell's own money. Clients include a digital marketing firm, a sod business and an after-school tutoring operation.
But while Caswell is proud of his client-companies, he believes the firm's best days are ahead, thanks to the recent passage of the federal Jumpstart Out Business Startups Act. President Barack Obama signed the law, the JOBS Act, April 5. It deregulates and streamlines rules that govern investing in small businesses. It also creates a system for crowdfunding, which allows small privately held firms like Cazley to sell shares, up to $1 million, to the general public.
Says Caswell: “It's what I hoped for from the first day I started this company.”
That was back in October 2008. Caswell had worked nearly a decade in commercial loans, first for Bank of America, and then for South Carolina Bank & Trust, outside Columbia, S.C. He also worked in the business loan department at M&I Bank in Sarasota.
Those positions enabled Caswell to quickly realize the fall 2008 credit crunch and market meltdown would bring traditional bank lending to a halt. “I knew everyone was going to stop lending,” says Caswell, “so it was the right time” to start a private, for-profit lending business.
Caswell spends his time mostly in three areas: He monitors the companies Cazley invests in; he meets with new potential businesses to invest in; and he woos prospective investors. He hopes to have $10 million in the fund within five years.
The biggest challenge in the business, says Caswell, is something many investors in small businesses face: lack of control. “In lending you never know what the future will hold,” says Caswell. “Things can sometimes take twice as long and cost twice as much as we think.”
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