The Hidden Funding Problem Keeping CPG Brands Out of Retail

Dr Mark Young Welcome everyone to another edition of CPG Insiders. I'm your host, Mark Young, co-host Justin Girouard Justin, we got a great guest today. We got something that people are really going to want to hear about. Justin I was extremely excited when we got the email request about this.

Because as you know, right, everybody asks us about it. And frankly, this is one of the what I will say largest constraints for especially mid-sized and challenger brands to get into retail is being able to fund it. Dr Mark Young Does everybody ask us about it? Mm-hmm.

Right. So we're going to get into that. And first I want to bring something up before we get to our guest. Something dramatic happened this week.

And I don't think everyone really grasped the how big this is, but this is literally something on the level of the invention of the atomic bomb. And what happened this week is Anthropic released a paper. And that paper shows that over the past quarter, Anthropic's Software, which is Claude, wrote 80% of its own software. So why is this important?

Because the computer is now building itself. It is now self-sufficient. Justin We are here. Dr Mark Young This is this is a turning point.

The it is now self improving. And this has happened much faster than anybody thought it would happen. Couple of interviews, I saw a couple of comments from employees at at Anthropic. Different posts that they put out on social media.

One of them was an employee that said, I'm struggling now to figure out what value I bring. And that my job is no longer important. Second employee over there, their comment was, I this is from a code writer. I haven't written code in six months.

Justin gonna be We are in a dawn of a new age. Dr Mark Young So the machines are now developing themselves. The last thing I will leave you is President Miley down in Argentina. Justin Mm-hmm.

Yes. Dr Mark Young And he's done an incredible job turning that country around. He has now made the decision that he will allow he will be the first country that allows AI to be developed without any constraints. And they are going to allow AI agents to have citizenship.

Justin I I don't have the brain power at this moment to even process what you just said. I'm just gonna tell you that. Dr Mark Young So now your robot will have human rights in Argentina. Justin This is too much.

Let's talk about something else, shall we? Let's let's come down to Earth for a minute. We've got Rohit here. This is gonna be an incredible show.

Dr Mark Young All right. Our guest today is Rohit Mathur Now, let me tell you who he is. He is the co-founder and CEO of Bridge, the leading platform for retail supplier financing. He spent over a decade as a banker to large corporations at Citi.

Saw the same thing play out over and over. The financing options and speed to access, those options available to the Fortune 500 almost never reach the mid-sized companies. And They're the people who need it the most. So it's the old joke that and and this is an o everybody knows this joke.

The banks only loan you money when you don't need it. That's kind of the comment. And what they're doing is giving people access to that. I'm and Justin, you've heard probably heard me tell this story.

I remember early on in my career, you know, struggling to borrow money and finding places to borrow money. And then there was this turning point. Justin Yes. Dr Mark Young And I remember it so well.

The the president of the bank came to show me the bank's financials. He brought me their financial statement, wanted to sit down and show me how dirty the bank was and how protect how safe the bank was. And I remember sitting at my desk thinking, wow, it's true. You get to a certain point where you're chasing money, and then after that the money chases you.

So, for big companies, remember, banks are in the business of selling money. They rent money. And they want to rent the money to people who will pay it back and to people who can pay the interest. So they chase the people who seem to be most capable of renting money and paying for it.

Now, what we're talking about is purchase orders. Now, if you if any of you have read my book, 27 Unbreakable Rules. One of the things you you recognize from that book is you need funding. You have to have the money.

So I'm going to give you a little quick experiment here. Let's say that you've got a new product out, and your new product sells for you wholesale it to Walmart for $10. Okay? So let's let's run the math.

I'm going to grab my calculator here and let's run the math on this. You have a $10 item. Walmart decides we're gonna bring your item in and we're gonna bring it in to every store. Awesome.

How many pieces per store are you going to bring in, Walmart? Well, we're gonna bring in six per store. Okay, so that's 4,600. Let's do the math here.

So 4,600 stores times six pieces. That's 27,600 pieces. Okay, now we need to have product in the DCs, right? So we're going to put another $13,000 in the DCs.

So now a startup order at Walmart is going to be 40,000 pieces. That's 40,000 pieces. You have a $10 product. What do you need?

That's a $400,000 purchase order. Now, on top of that, keep in mind, and Walmart, I gotta tell you, Walmart is We hear people make all these comments all the Walmart's the evil empire, I don't want to do business with Walmart. Walmart's the easiest people to do business with. I love Walmart.

They pay their bills faster, they don't beat you up, they don't try to to nickel and dime your purchase order. Walmart's great. But let's look at that order. So I just got a startup order, and that's only a $10 item.

So I just sent this item in. I need $400, I've got $400,000 worth of inventory. And If my product sells, Walmart's going to start issuing me purchase orders within the first week that the product hits the ground. And I have to keep refilling those purchase orders.

I can't miss those purchase orders. So a little sidebar, one of the things that we tell people, and we'll get Rohit's pin, and we always tell people that whatever you're shipping to Walmart, whatever you're shipping to Walgreens, you better have 50% to 100% of that amount in your own warehouse ready to move. Because if you're waiting for s a ninety day shipment to come in, you're gonna miss shipment dates, you're gonna get fined. So Rohit, tell us about this new operation.

You now have an official purchase order financing program that you're partnering with Walmart, right? Rohit Yeah, so thank you guys for having me on, first of all. And let me react to two or three of the things you've said, right? Number one, number one, you're exactly right.

You know, this is one of the most incredible things that can happen to an entrepreneur is when Walmart says, I'd like to buy your product, because the scale and scope of what that could mean for your business is enormous. Right. And we hear these stories that, you know, the total sidebar, but Walmart has an event every year called Open Call. And Dr Mark Young Please do.

Rohit I've been to that event in Bentonville, Arkansas, for two or three years. And you'll see people walk in with what they call a golden ticket when they pick you up for for the stores. And you can actually see people's, you know, we're not talking dollars and cents here, like you can actually see people's emotions because that is going to change their life, their family, their business, and the and the you know, and there's a ripple effect, right? Because that means you're gonna hire more people and and it's gonna help your the town that you're building in and and et cetera, et cetera.

Right. So so we see that. So just to Dr Mark Young Yeah. Rohit I always like to zoom out because a lot of times we get lost in the numbers, but I think there's a bigger picture here, which is this is a an order for Walmart can can really change can change your life.

Right. So that's one. Yeah. Dr Mark Young And let me add something to that, Rohit, if I can, very quickly.

Even if you're in the big retailers, so Walmart, Target, Costco, let's leave Costco out. Walmart, Target, Walgreens, CVS, Kroger, if you're in that group of stores, Walmart is still always going to be at least 40% of your total business. They represent that much of your life. in C PG.

Go ahead, Rohit. I just wanted to remind people how big Walmart is. Rohit Yeah, and so so I th no, that's a great point, right? And and I think the second point to that, which is a point you guys you were making with your example of the four hundred thousand dollars that you need, you know, the benefit here and and we all buy stuff online.

I buy stuff online, you guys do too. You know, when you buy stuff online, you are selling one at a time. So you don't actually know how much inventory you're gonna sell. The benefit of being in a in a store is you've got one customer.

Walmart is buying your stuff. So when Walmart gives you a purchase order, they're buying your stuff. Same thing with Target or Dollar General or whoever else, right? And so you kind of really mean need to make that customer happy because you've got one customer.

Now their customers obviously have to buy the product, et cetera, et cetera. And so you do need this capital. So when Walmart tells you, hey, I need these, you know, the six of six to the six units of your product for X number of stores, you need to go then go to your manufacturer or your supplier, right? Or you need to go and hire two employees who are gonna back box the product.

Right. There's so many different things you need to do. And once you deliver that product to Walmart, you're gonna pay get paid after a certain period of time. Right.

Maybe that's 30 days, maybe that's 60 days. And there are financing options for that as well. But the most important part is from when you get the order to when you deliver the order. And we noticed that there weren't options available that were streamlined, that were fast, that were cost efficient in that time.

Right. And to link it to the third point I was going to make, you know, you talked about banks rent money. I was one of those landlords. I worked at a big bank for over 10 years who was renting money to large corporates, right?

And so I totally understand that. And what we noticed was that that same efficiency, you know, when one of our large corporate clients called us, I'd get on a plane and fly down there. Dr Mark Young Mm-hmm. Rohit And say, here you go, here's the term sheet.

Please borrow money from us, right? Where is that same efficiency for the person selling $400,000 of goods to Walmart? It doesn't exist, right? That person who's selling $400,000 of goods is getting the runaround, is calling 100 people.

Meanwhile, you know, the large corporates have an army of of of CFOs and and and accountants and and bankers, right? Whereas the the small the medium-sized business usually is like a three, four, five person shop. Dr Mark Young Mm-hmm. Rohit 10% shop and the you know the CEO is also the CFO is also the COO.

and so that is the person that we're going after. We're going after this mid-sized business. We have a new fund that is focused on the the order financing, right? So whether that is you get an email from Walmart and say, Hey, I've got an advance coming up, we can underwrite that.

If you've got the actual purchase order, we can underwrite that. and and kind of everything, everything in between, right? Dr Mark Young Mm-hmm. Rohit Where we can basically finance that purchase order.

The last point I'll make, I'll kind of love to hear your feedback on this. This is this is unique because you started the call talking about AI, right? And I always tell people, why would a, you know, if you're an entrepreneur and you're building, you know, you're building a product for Walmart, you're selling it to Walmart or any of these other retailers, why do you care about AI? Well, you only care about AI if it makes your life better, right?

And here is a situation where we are using AI behind the scenes. To underwrite it faster, to get information faster, to use data. So decisions that were usually a no, we can say yes because we've got data that we can now analyze using our models. And so that's why this, you know, to link it all back, right?

That is why we're being able to provide to this medium-sized, small entrepreneur that is selling to a Walmart, Dollar General, Walgreens, Target, whoever, the same kind of service that. my co founder Hart and I were providing to these large corporations when we was working at one of the largest banks in the world, right? And so that's kind of what we're trying to do. And AI is an enabler to do all of that.

But more importantly, we now have the capital behind us, over a five hundred million dollar fund to go and finance these these re these retailers. Dr Mark Young go ahead. Justin Can I ask you a question real hit real quick? Rohit Sure.

Justin Why are you doing this? Just what what's driving creating this business and supporting, you know, these mid-sized companies? It doesn't sound like you were hurting before. So I'm just curious, like what drove you into this space?

It's much needed and I'm so excited about it. But I would just love to hear the why, the purpose behind this decision. Rohit Yeah. Yeah, look, my co-founder Hart and I have worked together now for gosh about fourteen years.

We started together at a bank, right? We sat right next to each other. And after a certain period of time, you know, what we we got really good at our jobs. and and part of that was we were just doing the same thing again and again.

Right. We were continuing to fund these large corporations, you know, mid-sized to large corporations, you know, hundreds and billions of dollars in revenue, hundreds and millions of dollars of Of of Ebida and we were doing these large deals. And at some point we kind of looked at each other and we said, you know, is this what we're gonna do the rest of our lives? Like we're gonna continue to do these large deals.

Meanwhile, we looked at the fintech, fintech kind of ecosystem, and this is about four or five years ago, and we said, Look, everyone is focused on this $20,000 loan, $10,000 loan. What happens to the entire middle? Like, what happens to that? You know, because the $10,000 loan is for the person who's selling on Walmart.

com or maybe like Amazon.com or something, right? They're selling a few things, maybe it's out of their garage and they're gonna kind of build a business. But what happens once that person gets into retail all the way until a big bank comes and says, We'd love to finance this deal, right?

Which is when there are hundreds of millions of dollars in revenue. And we just saw this huge gap. and we said, you know what? That sounds like an exciting problem to solve.

and so let's go after that problem. And and and you know, like with every entrepreneur, it kind of we started with one thing, we had one thesis, and as we kind of dove deeper into it and we talked to partners, you know, one of the big aha moments for us was when we talked to Walmart, right? And they kind of explained their supply chain, they kind of helped us understand where there was need. And we said, you know, we think that there's a way to address that need.

and and over time have built technology to address that and now are are plugging in capital behind that technology to really make things move faster. Dr Mark Young So Justin, going back to our new book, 27 Unbreakable Rules, one of the things that that we call out in the book is that when you you start out and you've got a Shopify site and an Amazon site. And yeah, you can kind of fund it. You can bootstrap your way into that.

80% of all consumer products are sold in brick and mortar. So if you want to scale your consumer products business, there's a 95% chance that the only pathway to do that is brick and mortar. When you make that brick and mortar jump, you cannot be partially pregnant. You have to go from zero to sixty miles an hour in a second.

Because you can't say, well, can we do twenty Walmart stores and then we'll do forty Walmart stores and then we'll get to eighty Walmart stores? No, you're going to do what Walmart tells you to do. This is their game. This is their rules.

And understand whether you it is Walmart, Walgreens, Costco, Sam's Club, I don't care who it is. There are 148,000 unique SKUs inside a Walmart superstore. And Walmart can live without any one of them. So you will play the game by their rules.

And this does not make Walmart an evil empire. This means Walmart is a behemoth of an organization that has figured out the right way to do it, and you need to play in, you need to play that game. So, Rohit, let me ask you a question. So, somebody is a smaller player, Amazon player, and I'm going to say they're probably, let's take a guess or they're doing two to five million dollars on Amazon annually.

That's probably a good spot of where we see a lot of new brands. And we see these people every day here, Rohit. So they're doing two to five million on Amazon. They got some Shopify business, things going well.

They get some brokers, they start going out, and they get a Walgreens and a Meyer and a Walmart to say yes. So now all of a sudden I'm in Amazon, and now I need to fill orders for. 13,000 locations. I don't have the inventory to do that.

I'm probably manufacturing offshore. It is probably at what a 90 to 120 day lead time from the time I place the order to the time my product gets to Walmart. And Walmart's going to pay me in 30 to 60, but Walgreens is going to pay me in 120, right? 'Cause they they are hundred they're hundred in fact Kroger's Sammy Kroger's a hundred and twenty net.

So I now need money for the manufacturer. It's not enough that I need money when it gets here. I gotta make a deposit to my manufacturer. Is do you step in and fill that gap?

And do you do that with cash? Do you do that with letters of credit? What how do you manage that? How does that happen?

Rohit That that is exactly what this what this new fund does, right? It is there to fund that gap from when you get the order or you get the advance all the way till when you deliver the product or even when when the Walgreens or the Walmart or the Kroger pays you. Right. And we do that using we could use letters of credit.

At times we will send cash directly to your to your supplier. at times, you know, we can pay for the inventory. And so we've got a lot of tools in our toolkit. But what we want it to be is seamless for you, right?

We want you to come in and say, hey guys, I've got this order. Here's the order. It's it's you know, here's the sell-through of my product, here's the financials, this is why it makes sense. But I kind of have a timing issue, right?

Which is I need to buy the goods now and I will get paid for them in the next three to six months. Can you help me bridge that gap? You know, no pun intended with our name. But that is exactly that is that is exactly what we do.

We bridge that gap with this capital. Dr Mark Young Mm-hmm. No, it's it's a good name, man. Justin It's a great name.

Rohit Right. So we will help you finance that capital and and we'll do it quickly, which is the most important part because what you don't have is a lot of time. I think, Mark, your point was really was really important, right? Where you have ninety to one twenty days, all these retailers tell you a date by which they want your product there.

Right. And some and and you don't want to miss that date, you know, on time info, right? That is the that is the mantra that a lot of CPG you know. Dr Mark Young And you better not miss that ship b that shipping window.

Rohit suppliers have to live with, right? You want to be on time in full. And how are you on time in full is if you can place the orders fast enough. How can you do that?

You can only do that if you can provide the advance. If you can provide the capital to the person that you're buying the raw materials from or you're buying the, you know, the buying it overseas or whatever you're doing, you can only do that if you have the capital to do that. and that is what our fund is designed to do. That is all we're going to do.

We're not You know, we don't have other hobbies of we'll do this, we'll do inventory, we'll do equipment financing or something else. We're gonna do just CPG you know, purchase order or order financing, and and that's gonna be the entire fun. And we've got a lot of capital to deploy here. and we're excited, and we're excited to kind of help entrepreneurs because every entrepreneur represents this incredible story, and we've got all these incredible stories already.

We've already closed a couple of deals. you know, just as we were getting this off the ground, we've closed a couple of deals. both of them have been Walmart suppliers. They've been incredible stories, you know, of of how we can kind of help these brands scale.

Dr Mark Young So one just I wanna fill something in. I said letter of credit. I'm gonna tell people what letter of credit is very quick. Or Rohe, you can tell people what letter of credit is, so they understand what I meant by that.

Rohit Yeah, it's essentially the the way to think the way I think about it is it's a it's you know you get a loan from us and we tell your supplier in let's say your suppliers in Vietnam, we send them an a letter which is stamped by a bank that says, When you deliver these goods, the way that it's laid out in this order, we promise we will pay you. and you don't have to ask us and call us. We present the letter, you don't have to call us and request it. You can literally just take that letter.

Dr Mark Young Right, so basically you can present the letter. Rohit Go to your bank in Vietnam and the money will come through, right? As long as the goods are shipped the way that they're supposed to be shipped. So it's just a it's just another financial instrument to kind of mitigate some of the risk for the lender.

but you know, a lot of times letters of credit are hard to get done. They take a lot of negotiation. No one ever agrees to the terms, it seems like for a product that's been around for so many years, people still don't like the language on it. And and so at times we'll just do the direct deposits or whatever.

We you know, we've got various tool tools in our toolkit to ensure that you are able to get that order through the facilities that we'll give you. Dr Mark Young So I am a I'm a mom and pop shop. I'm doing three million dollars a year on Amazon. Okay, I've got a nice little business.

And now I need some big funding because I now have a couple of big chains. What if I don't have the credit history that would warrant this kind of money? Because I'm doing three million dollars on Amazon, which means I'm doing $280,000 on A month. So I've never had to buy more than $100,000 worth of inventory in my life.

So now all of a sudden I'm buying $100,000 inventory, and all of a sudden I need to buy two million dollars worth of inventory, and I don't have the credit history and I don't have the assets. When we think about borrowing, we always think of cash, collateral, you know, credit. How do you how do you look beyond Rohit Yeah. Dr Mark Young the balance sheet, how do you look beyond the FICO score to analyze these people's businesses and know that we can get you done even though a regular bank wouldn't do this?

Rohit Yeah, so I'll make two points here, right? And and it may sound contradictory. banks and most lenders always look backwards, right? So if you have done a hundred thousand, okay, sounds good.

You've done a hundred thousand dollars for the last two years straight. I believe you'll do a hundred thousand again. And so I'll lend you a percentage of that, right? So they're looking backwards.

Most most purchase orders and CPG is a forward-looking business because you're always going, growing exponentially. And so Dr Mark Young Right. It's expanding. Rohit And so what we do is we look at that, we look at that forward order.

That is why we are financing the future order, not your past history. Right. So we're not financing inventory that you had last month, we're financing inventory that you need for next month. Right.

So that's kind of one point. But the second point, I and you know, one of the things we found in this space is that there's so much bad behavior with people telling suppliers, I can get you the money tomorrow. Don't worry, the rate is low. And it, you know, it's any money that you can get tomorrow, you'll regret the day after is my kind of Dr Mark Young Yeah.

Justin Mm. Rohit We have a big button, right? But Dr Mark Young You know, out of the trunk of an old Cadillac. Rohit Yeah, it well it you know, if if you know, even if it's even if it's not the old Cadillac, it's kind of the equivalent of the old Cadillac, but this time they're coming for your credit score and and your home and everything else, right?

And and you'll never be able to get out of that hole. and so, you know, the the second point I wanted to make was we want to be honest with people, right? And there are times, right, where we will not be able to say yes. And that is a look if you've got if you have gotten Dr Mark Young What what what would that look like?

What what would cause that? Rohit bad sell-through if your data shows that you've had, you know, you've never been able to deliver on time, you've had horrible sell-through rates, you know, you have a really weak personal guarantee story. You haven't got any partners that can kind of that can kind of help support the business. There's a multitude of reasons.

We're not underwriting based on one fact, which is to your benefit, because everyone has you know, no business has a hundred percent perfect track record, right? There's maybe one thing that's wrong. And we're looking at everything as a collective. Dr Mark Young Mm-hmm.

Rohit But there are times where you'll look at a business, right? And you'll say, look, there's just no way we can get comfortable with this. And at those times, what we tell people is we'll give you a fast no. Right.

I'm not gonna tell I can't solve for something I can't lend to with some absorbitant rate that will destroy you, right? Where I'm like, I'm just gonna, you know, I'm just gonna lend to this person, but I'll just take, you know, forty percent interest, fifty percent interest. And I'm not making that up. People actually are charging that out there through through merchant cash advance and things of that sort.

People are charging Dr Mark Young There absolutely is. There are factors out there. Rohit Exorbitant rates of interest, we don't do that, right? We will either say yes, we can get this done, or this is a path to how we can get it done, or we'll say no, right?

But either way, you'll know fast because that's the benefit of the technology and the partnerships that we've got, that we can analyze the data you've got and give you a structure very quickly. Dr Mark Young So you're not doing the high price factoring model. Rohit We are not doing merchant cash advanced. You know, if anyone from the US government is watching, please you need to look into this more and regulate this space because it's taking down retailers every day with kind of predatory rates.

and and no, we are not doing that. We are providing rates that can actually be funded when you get that money back and there's plenty left for your profit. We're not trying to make it so that you're basically building a product, selling it. just to pay us our interest, right?

that's important. Dr Mark Young Right. So so no usury laws shall be violated. Justin Ha ha ha.

Rohit No no no usury laws were broken in the making of this podcast, yeah. Dr Mark Young So and what happens, folks, is this there are things called usury laws. And I th what's a usury limit at right now, Rohit, is it 25, 24.8, something like that?

So roughly 25%. So usury laws say that you can't charge more than 25% interest, which is already insane. And this is why you see credit cards that are 24.8% interest on your credit card.

But the way they get around this, and correct me if I'm wrong, Rohit, they get around these with Rohit Twenty five by twenty twenty this depends on the state and stuff, but yeah. Justin Same. Dr Mark Young additional fees. Rohit Yeah, th there's a couple of ways, right?

So they have this thing called a kind of a factor rate, right? Or or they will so what they do is and and and sorry if this is a you know, we're digressing here, but I we feel very passionate about this. But a lot of times people will yes. Dr Mark Young Mm-hmm.

I do too, you can tell. I I don't I don't like these this usury lending. Rohit Well, so a lot you know, twenty-five, twenty-eight, these are this is child's play. People are charging eighty, hundred percent.

And what they do is they say, We will take twenty percent of your revenue. You look at that and you say, Okay, well, that's not too bad. Like I I need this order, I'll take they'll take twenty percent of revenue. Notice it's on your revenue line, not on your profit.

So now, you know, they've lent you money and they will get that. So let's let's say I lend you a a thousand bucks. Justin Mm. Right.

Rohit When you sell, you know, five hundred, I will take two hundred dollars of that or a hundred dollars of that. And that's what these people do. And so what happens is, you know, you still need to pay your employees. You still need to pay for, you know, maybe you've got a facility, whatever.

You all of your costs aren't factored in. So now what happens? You don't have enough to pay that. What do you do?

You take another loan like that. And it becomes this vicious cycle. And we see it all the time. Well, we'll see a financial from someone, we'll say, Why do you have seven of these things?

And they'll just walk us through the story. And they'll say you kind of it's like an it's like a drug, you kind of get addicted to it and you can't and you can't weigh yourself off. And part of the reason we're doing this, and by the way, to you know, you you started the call by talking about how you know Walmart is very supplier friendly. To their credit, they realize that their suppliers, especially growing suppliers or their suppliers, need help with capital, which is why they work with us and others, right?

They work with us because they realize that there's a need, which is, you know, they don't need to, right? They can just say, Hey, you wanna sell, sell, if you don't want to sell, don't sell. Dr Mark Young It is Rohit But they understand the need to help their suppliers with capital and make sure that the right kind of capital is coming into their hands so that they can continue growing their business with Walmart. Dr Mark Young Mm-hmm.

I had a vendor come in to see me, row it in, told him to bring his financials and bring everything with him. And they had no less than a dozen of these different loans at various places with various timing and various payoffs. And it is the equivalent of a large-scale version of a payday advance scam. Rohit Yeah.

It it it it is exactly that. There's all kinds of stuff people will do. You know, we heard a borrower the other day tell us I'm getting a you know, I think it was a hundred and fifty thousand dollar loan, and they've told me that I have to just put seventy five thousand dollars in this deposit account. And I was like, So you're getting a seventy five thousand dollar loan, not a hundred and fifty thousand dollar loan.

But that is, you know, that that is kind of the way that people you know, in in this world you know, people are being kind of not manipulated, but you understand what when a supply Dr Mark Young A seventy five thousand dollar loan. Justin Right. Rohit IR has got this incredible order to come back to what we were talking about. It's this incredible opportunity.

You will do anything to make that opportunity work, right? Dr Mark Young This particular person, I literally my advice to him was I actually introduced him to a bankruptcy lawyer. I said, You're gonna have to throw this into chapter eleven and and compress these people. Because there's no way to there's no way you're ever gonna clear this.

You can't get out of this hole. There's no way you can sell your way out of this hole now. Rohit Yeah. Start again.

Yeah, a hundred percent. It is that is you are you are 100% right. And so the reason that we've created this fund is to prohibit situations like that. Right?

We don't need to make 200% interest. I don't need to take 40% or 50% or 60% of your margin. You know, there yeah, yeah. And and by the way, when you go and Google, you know, need a loan, the first Dr Mark Young No, not if you're a legitimate lender.

Rohit five links you're gonna get. Hopefully our links are showing up, but the first five links you're gonna get is going to be get money tomorrow. And you know, I always tell people, whenever someone says get money tomorrow, just like X out of that screen. That's the best way to do Justin Yeah.

Dr Mark Young So now that is Justin Yes. Dr Mark Young a great segue into when is the right time to start talking to you? Rohit Yeah, that's a great I I love that question. and we always say it is as early as possible.

So look, if you're dreaming of a product, don't call us. We can't help you with the capital, right? But right. But if you have had your meeting with Walmart, they've said, you know what, or with Walgreens or Tarek, whoever else, right?

And they've said, you know what, this is actually really interesting. you've been sell and a lot of times, as Mark, you and Justin know, you may be selling on, you know, Walmart.com. Justin Peace.

Dr Mark Young Agree. Rohit or Target.com or or some other dot com version, right? And then they'll say, you know what, we've seen you sell really well.

So we'd like to bring you into the store. Right. That is the time to say, okay, look, if you've had that conversation and they've given you some indication of we're probably going to need a hundred of these things in 500 stores, that's when you call us, right? Get started early.

We can, you know, what we do with our facilities is we don't charge you anything to underwrite you. We will underwrite it, we will tell you what we can lend you. And then you have that kind of like a credit card ready to go. And then when you get that, you know, when you get that order or that email from the s from the from the person at at the retailer saying, hey, we're ready to go.

We'd like to order this tomorrow and we'd like you to deliver 90 days, that's when you drop on the funds and only then will you pay for the pay interest on those. So I know that's a long answer to your question, but as early as possible, but really the right time to start is when you have some indication from the retailer that they're interested. And and let's not forget, right? it is hard to lend first time suppliers, right?

So let's just be honest about that. It's not like all first time suppliers are gonna come get a hundred percent of what they want. But the but the bigger story we see is that brands test suppliers with fifty stores, hundred stores, two hundred stores. And if it's doing well, that's when the ramp comes, right?

So maybe you only need, you know, maybe you only need two hundred thousand dollars for the first one. Dr Mark Young Mm-hmm. Rohit But if it's doing well, which is now this is like the best moment, right? You're about to go from two hundred thousand to two million, that is when the ramp comes.

And that is where we are the most effective because we can look at all of the data that you have on that two hundred stores and how it's been selling. And and we can underwrite the fact that you're going from two hundred to two thousand and be able to lend you capital to be able to do that. And so and so that, you know, I don't I you know, a lot of people talk about this is my first order, first orders are hard. That said, there's a huge part of the ecosystem.

If you go into any of these stores, you'll see thousands of products, right? and and you know, there's a huge part of the ecosystem that is in certain number of stores, but scaling is really hard. And we're helping that scaling journey. Dr Mark Young What documentation and how should I be preparing before I call you?

Rohit Yeah. So I think number one, have your, you know, have your you know, order or email confirmation or whatever ready from the retailer and say, hey, this is what I've got. have your, you know, your financials for your business. We don't take a lot.

We're not trying to ask for your, you know, grandmother's birth certificate or anything of that sort, but have your financials for your business. Be able to connect your bank accounts to our system. really what we think is The entire process of you submitting a request through our platform should take less than twenty, twenty-five minutes. which is, you know, the first part takes only five minutes to submit, and then you have to come back and kind of upload some of these these other documents.

Twenty, twenty-five minutes. And based on that, we should be able to tell you how much we can lend to you. and then it's really a matter of you working with us to figure out how much you actually need, when you need that capital and kind of working through that journey. Dr Mark Young So do I need a couple of years of tax returns?

Rohit At least one. Right. I think at least one at least one year of tax returns, business, you know, even if it's a QuickBooks business summary, business financials, you need one of the some of those. and then and then the bank accounts that you're using for the business.

Dr Mark Young Least one year of tax returns. Okay. What about what about things like personal financial statements? Rohit Yeah, I mean tax returns a lot of times can cover that, right?

A lot of people will run their business through the through their personal tax returns. We will look at that stuff before we kind of give, you know, before we kind of close the deal. But really to give you an idea of what we can do, we need very minimal documents. Right.

It's more about work Dr Mark Young Now a am I personally guaranteeing this or is this guaranteed because Walmart's involved? Rohit It depends. It depends. A lot of times you are not personally guaranteeing this.

but at times you might say we might say to you, look, we can lend you this much. And you might say, Well, I want way more than that. Well, if you want way more than that, then you know, this is how it gets there. Right.

So we wanna be able to be solution oriented and give you the right answer. but we don't have a personal guarantee kind of minimum requirement for any of our stuff, right? So i i if if we think that that structure works without that, as any lender will tell you. It is a pain to take or enforce personal guarantees.

It's more deterrent than anything else and and if we don't need it, we don't want it. Dr Mark Young But I will tell you all of the predatory lenders are taking personal guarantees. Rohit Yeah, I think, you know, the thing that we see with a lot of that that kind of space is they are taking the money before you see it. And so they're linking directly to when a big retailer pays you.

And so before you can even touch any of the money that comes into that account, they've already taken out their their rate or their factor rate or their whatever they whatever they want to call it, right? Their interest, their payment. and and so we that's kind of where the challenge comes in. and so we've we've tried to avoid those things by basically making it super upfront, super straightforward.

We will tell you, hey, you are borrowing for us from us on this order. It's a half a million dollar order. you're gonna make you know, when you when you deliver the order to Walmart, they're gonna pay you 750,000. And therefore, this is the amount you will get at the end of the day in your account, right?

We're gonna lend you the 500, you're gonna get 750. This is the percentage of the 750 that we're gonna get. and the rest will come to you. We are hyper transparent and we just don't want any surprises when you get it.

Dr Mark Young And I'll and I'll tell you something else though. Walmart Walmart still operates under a lot of the values that were originally set by Sam Walt. Rohit Yeah, a hundred percent. Dr Mark Young So Walmart has some very strict guidelines that their buyers need to work through.

And those guidelines are: Walmart can never be more than 70% of your volume. Walmart almost always requires that you have more than just Walmart as a district as a point of distribution. Walmart hopes to be 30 to 40% of your of your volume. And Sam Walton had a rule, and that rule was.

We do not ever want to be the reason that a vendor went out of business. We don't want to be the reason. So Walmart, even when you'll notice this, even if Walmart discontinues a product, they usually won't discontinue all 4,600 stores. They'll usually discontinue a thousand stores and a thousand stores and a thousand stores to to help the vendor get out in one piece and not destroy the vendor on the way out.

Now I bring all this up for the simple reason is Bridge has a working you guys have a working agreement with Walmart. Rohit Yeah, we've partnered with them for the last couple of years. they've been incredible partners, right? We go to all of the open call events.

you know, we talk to that team often. and we see the dedication from the Walmart team to help their suppliers, right? That kind of motivates us too, right? And it helps us, you know, this this facility that we've got with this private credit fund that we're lending, it it all of those things help put these things into effect.

and so yeah, we we value that relationship. We've got relationships with other retailers as well, which are which are equally strong, right? Best buy or Dollar General or what have you. and and you know, we value all of our corporate partnerships.

That is how we go to market as a business. that is what we do and and that is an important part of why we're able to lend at at kind of market competitive rates and very efficiently and fast. Dr Mark Young And that's kind of my point here, that Walmart has Walmart has done the due diligence on bridge. That's what I'm pointing out for you, and that is if Walmart is saying these people are our partners and these people are legitimate and safe to work with, they are.

Because I guarantee you Walmart did the background check. Rohit Yes, and and w right. And we work every day to make sure that we continue to earn that trust. Right.

And not just from not just from our retail partners, but from our clients as well. Right. we we want we have a we'd we'd love success stories. We do a lot of success stories.

You'll see even more as this program gets kicked off. and I'd love to come back with some of our clients that we've actually financed to talk to you guys with some success stories. but yeah, that's that is Dr Mark Young Mm-hmm. Yeah, that'd be great.

Rohit our entire business is we have to make our clients happy and our client is that retailer that is being able to get into Walmart and scale with Walmart or get into Best Buy or or Dollar General or any of these great brands and really grow your business. Dr Mark Young Well this is really exciting. Rohit, how do our listeners find you? Rohit Bridgemarketplace.

com. It is that simple. Bridgemarketplace.com.

you know, you can reach out to us on LinkedIn. I'm happy to kind of along with the show notes, we can add some links, give you guys QR codes. we're excited to get started, right? Give us, you know, this is we're using a lot of technology.

There is a lot of AI at use, but we've got a lot of human beings that are there to help you as well. And so this is not some you know, click three buttons and we'll tell you yes or no. if you just want to talk. Dr Mark Young Uh-huh.

Rohit If you just want to find out what we're doing, what we're working on, how we could help you as a retailer, there's a link on the website to schedule a call. Schedule a call. Talk to someone who'll be sitting in our office. you know, we've got a couple of offices around the country here in the US and and someone will be s will be talking to you there.

you know, it could be me and it could be somebody else on the phone, just happy to chat and kind of give you some advice. Dr Mark Young Rohid, this is this is great. The company again is Bridge. we'll have links in the show notes for people if you want to go there and you want to go to the website.

I want to thank you for being with us. Hold on the line for us when we're done, when we're off air. folks, this is these are the tools. These are the tools that you need.

Again, one of the things that we talk about on this show is who not how. These are one of the who's that you need in your team. Just like you need a CPA and an ad agency and a lawyer and an FDA guy, you need a banker. And and literally, you've heard you've heard it, you've read it in our books.

You ha you need a banker relationship. And the time to have a banker relationship isn't on the day you need the money. That's not when you start building a banker relationship. So if you've if you've been to CVS, Walgreens, Walmart, you've been there and you think that you've got this.

50-50 shot that they're going to bring you in, this is probably the time to start learning about the lending. Not after the purchase order shows up. Because when the purchase order shows up, it's going to have a delivery date on it. Rohit yeah.

Dr Mark Young And what you need to do is get product ordered and on the water and on its way here, not worrying about where am I going to get the money now. So that's where you need to start this. Folks, that's it for today. If you enjoyed today's podcast, make sure that you leave us a five-star review wherever you get your podcast.

As always, you can always get in touch with Justin or myself. You can go to cpginsiders.com or you can go to jekyllhydelabs.com and you can find us.

Rohit, that is great. folks, we will see you on the next episode of CPG Insiders.