The Opportunity in Asset-Based Lending with Angela Kay, President of Basepoint

Andrew Kirsh (0:09)

Hi, I'm Andrew Kirsh, Co-Founder of Sklar Kirsh. On this podcast, I interview industry leaders. You'll hear their real-time opinions on today's market, their background, unique career highlights, and guidance for newcomers to the industry. This is The Kirsh Connection.

Welcome to another edition of The Kirsh Connection. I am here at the BMW Performance Center in Thermo, California, where we had the unbelievable experience driving these phenomenal BMW race cars across this track, across the big track, little Mini Coopers. Thanks to Eric Adler and the entire Bray team for setting this up. I had my good friends, Eric Friedman and Bill Schopoff, Omar Ivaneer, Mac Gorman and Ben Czerny with me to experience this unbelievable day. On this week's episode, I have my sister-in-law, Angela Kay, who is the president of BasePoint. She talks about asset-based funding and what the market is like today in 2026 for that industry. I hope you enjoy my conversation with Angela Kay and Eric, my photographer, show my audience the BMW performance track.

Welcome to another edition of The Kirsh Connection. I'm here with a very special guest, my sister-in-law, Angela Kay. Angela is the president of BasePoint Advisors. Angela, welcome.

Angela Kay (1:46)

Thank you, Andrew. It's so exciting to be here with you on the podcast.

Andrew Kirsh (1:50)

It's great to have you. In fact, I think I even met you before I met Courtney, right?

Angela Kay (1:55)

That's right. 25 years ago.

Andrew Kirsh (2:00)

Come on, don't date us. That's a quarter century. That's a long time. It's a long time.

So this is very cool. I don't think I've ever had a family member in the seat, in the hot seat here.

Angela Kay (2:12)

Very exciting. It's been fun to watch your podcast and the growth and get to, I get to hear about the deals on the outside, but then to see it all put together is exciting.

Andrew Kirsh (2:21)

Yeah. No, I mean, look, it's, as we talked about, the podcast is really to have insightful conversations, whether you're in the real estate business or other industries. We've had entertainment people, business people, real estate people, and want to talk about you and your business. So in case my audience doesn't know about BasePoint, why don't you give them a 30,000 overview?

Angela Kay (2:46)

Thanks. So BasePoint, we are an asset-based lender. So we are an asset manager, just like your other traditional bigger GPs you might know, Oak Tree, Aries, we're a smaller version of that. We focus on alternative credit. So what we do is we basically provide financing to loan originators in the US who then go out and provide financing to what we like to call Main Street America. So that would be your local businesses, the local pizza shop, auto shop, bakery. Let's say you are your local auto shop and your forklift breaks. You're going to call one of BasePoint's borrowers. You will sell a portion of your future revenue in exchange for $50,000 today, and ultimately pay back like $62,000 over a 12 to 18 month period. Or if you are your blue collar worker, somebody making $45,000 to $95,000 a year, and you've just paid your taxes and now your car breaks down, you may not have an extra $1,500 on hand to go fix your car, you're going to go and take out a line of credit or installment loan from one of BasePoint's borrowers, and typically pay it back over a five and a half month period. So we're like a non-bank bank.

BasePoint was actually born out of the global financial crisis. So the original team and founder, all of whom are still in place today, many of them were working and running the global warehouse finance business at Morgan Stanley from the late 90s into 2009 Because prior to the crisis, the big banks were basically the providers of credit. When the crisis hit and Dodd-Frank came about, which is a big regulation, it basically required banks to reserve a certain amount of capital on their balance sheet to originate certain types of loans. So there was a whole host of loans that now all of a sudden, the banks couldn't really earn a return on because they had to reserve so much capital on their balance sheet. So Morgan Stanley, for example, got out of that Gold Warehouse Finance business. Our team worked out that book without any loss and set up BasePoint. And really the only thing that changed is that instead of lending it 50 to 300 basis points within a big bank, now they could lend at 10 to 15% just because the banks are out of business. So we're really an alternative credit, a non-bank provider of capital today. Banks have retrenched further and further, whether that's because of regulatory or maybe some of them are underwater on commercial real estate, for example, or just spread really thin, there's more demand for capital than banks can lend. So BasePoint really steps in when banks are not able to provide capital, and we focus on financing short-duration portfolios of receivables. So we finance financial assets rather than hard assets.