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Grant's Current Yield Podcast

BUTTONED-UP BORROWERS

35 min episode · 2 min read
·
Carrie Findlay

Episode

35 min

Read time

2 min

Topics

Relationships, Investing, Startups

AI-Generated Summary

Key Takeaways

  • Asset-Based Lending Rates: Tekora charges 17-21% interest to first-time entrepreneurs and venture-backed companies, not because borrowers face bankruptcy, but because they lack traditional banking relationships and carry scaling risk that banks avoid despite strong fundamentals.
  • Portfolio Performance Expectations: Approximately one-third of Tekora's loans fail to scale as projected, but the firm avoids losses by maintaining tight collateral controls, liquidating assets early, and structuring deals where underlying receivables retain value independent of borrower survival.
  • Credit Market Bifurcation: Companies accessing mega-fund capital from Blackstone, Ares, or Apollo face abundant credit availability with competitive terms, while consumer borrowers and smaller businesses encounter severe credit restrictions due to regulatory burdens and bank withdrawal from these segments.
  • Commercial Real Estate Crisis Prediction: Empty office buildings, struggling multifamily properties, and weak retail create an inevitable refinancing crisis that will spread to banks, CMBS holders, and private credit funds, triggering capital allocation shifts and deflationary pressure across the economy.

What It Covers

Carrie Findlay, founder of Tekora asset lending, discusses charging 17-21% interest rates to venture-backed startups, predicting commercial real estate will trigger the next credit crisis, and maintaining strict lending covenants despite industry trends.

Key Questions Answered

  • Asset-Based Lending Rates: Tekora charges 17-21% interest to first-time entrepreneurs and venture-backed companies, not because borrowers face bankruptcy, but because they lack traditional banking relationships and carry scaling risk that banks avoid despite strong fundamentals.
  • Portfolio Performance Expectations: Approximately one-third of Tekora's loans fail to scale as projected, but the firm avoids losses by maintaining tight collateral controls, liquidating assets early, and structuring deals where underlying receivables retain value independent of borrower survival.
  • Credit Market Bifurcation: Companies accessing mega-fund capital from Blackstone, Ares, or Apollo face abundant credit availability with competitive terms, while consumer borrowers and smaller businesses encounter severe credit restrictions due to regulatory burdens and bank withdrawal from these segments.
  • Commercial Real Estate Crisis Prediction: Empty office buildings, struggling multifamily properties, and weak retail create an inevitable refinancing crisis that will spread to banks, CMBS holders, and private credit funds, triggering capital allocation shifts and deflationary pressure across the economy.

Notable Moment

Findlay reveals her consumer lending data shows deteriorating economic conditions with rising default rates and reduced spending, contradicting official growth narratives. Costco bills have doubled over five years while portions shrink, indicating significant consumer financial stress beneath surface-level economic optimism.

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Episode Transcript

Hello. This is current yield grants interest rate observer of the air, and I am Jim Grant. And with me as always is, Evan Lorenz, the great deputy editor of GRASS. That's like the Ohio State or the, I guess, the Notre Dame. Right? It's in any case, Evan, from now on, it's the capital t I'm going with. I'm gonna trademark that as well. Alright. Henry, nice to see you. Happy New Year. And and we have a guest today, and her name is Carrie Findlay. And, she is friends of ours and friends of others, and, they all speak so highly of her, and you'll find out why presently. She is the, the founder of Tekora, which is a an asset lending operation, and they have a couple of funds, and the funds compound money at fabulous rates. We'll hear why in just a moment. In the meantime, Evan, okay. Over the weekend, the forty seventh president of The United States, launched his own meme coin. Right? And Yeah. The the Trump coin. And then, it went up to, like, $60,000,000,000 or so at its peak. Right. And and then came the first lady and, you know, she, I'm not sure if there's peace in the house or not, but her coin took a little bit of the oxygen out of the president's coin, and they both started to flutter down. And then a pastor who gave, part of the benediction at the she he he issued one. He has achieved a market cap, I think, of less than half dollars. So it was all, the best part was the first part. But, you know, I I spent the last couple of days trying to imagine among the presidents that I know and one about whom I've written. Imagine in this group, who would have done this? For example, Evan, Dwight d Eisenhower? I I can't quite imagine an iCoin. Alright. How about Honest Abe? I you you know what? I I just can't picture it. I think especially Honest Abe. I think John Adams, about whom I know something. And, nope, the technology was not available to attempt it. I don't see him issuing a coin with all of the attendant risks to reputation or, you know, rug pulls, charges, and legal troubles. The Wall Street Journal this morning has, a headline, over an editorial called president Trump crypto billionaire. And adjacent to this on the editorial page are all these high minded things about what's he gonna do about, you know, Iran and other matters of state. And then there's this item about this guy, president, who issues this coin of no evident intrinsic value, Evan, and it commanded at 1.60 odd billion dollars of what? Of currency, right, of dollars? Evan, what's a dollar? Yeah. Okay. You know, my my favorite part about this all was, every one of the crypto enthusiasts were, happy to see Trump in office because he is not putting the …

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