It’s an entrepreneur’s dream come true: start a business, see steady growth, get corporate backing, and grow into a lucrative company. Lake Success, N.Y.-based Advantage Funding did just that, but it would be a mistake to think the company’s beginnings were as glamorous as the name of its location now implies.
It started with three investors — Edward Kaye, Eric Coolbaugh, and Michael Kaplan — all sales representatives for a commercial transportation leasing company moving out of state. With knowledge of the industry and pre-established relationships with potential clients, they started Advantage Funding in 1997.
“It was four or five of us in a small broom closet of an office,” says Don Coolbaugh, brother of Eric, of their early years. He joined the company months after it started to head the sales division, and is now vice president of sales.
There are no miracles involved in the company’s growth — they started small and worked hard. Advantage Funding experienced 20% growth each year for nine consecutive years, adding customer bases and employees.
Their advantage, Coolbaugh says, is that “we originated customers through personal relationships — as opposed to [treating clients as] a number.” He estimates that referrals from satisfied customers are how Advantage was able to grow so much.
In 2006, Advantage Funding was approached by the Japanese trading company Marubeni Motor Corp. for a buyout — an offer met with surprise. “It was an unexpected solicitation,” Coolbaugh says. After “a year-and-a-half of courtship,” Marubeni bought 80% of the company.
“The Marubeni purchase leap-frogged us into a larger level — of both having the substantial back office function and a substantial wherewithal to be a direct lender, as opposed to being a leasing company looking for funds in the open market,” Coolbaugh says.
By unit estimate, the limousine and livery side makes up 35% of the company’s business, with charter coaches close behind. Their clients range from one-vehicle businesses to those numbering in the hundreds.
So far, Advantage Funding hasn’t been affected by the credit crisis. Since it has a strong corporate backing and requires no outside funding, the company is able to continue business without disruption, Coolbaugh explains. “We are still lending to all the marketplaces that we were originally in.”
Furthermore, Coolbaugh says that Advantage acceptance policies aren’t based on the corporate matrix. When looking at applications and establishing rates, its employees don’t just look at credit scores, but also considers previous borrowing experience and length of time in business. This way, those with past credit problems are given a second chance.
COMPANY FAST FACTS:
Name: Advantage Funding
Location: Lake Success, N.Y.
Principals: Marubeni Motor Holdings Inc., Edward Kaye, Eric Coolbaugh, Michael Kaplan
Estimated Annual Revenues: $200 million
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