The Factoring Revolution: Chad Capooth’s Blueprint for Trucking Cash Flow

Anthony Codispoti : Welcome to another edition of the Inspired Stories podcast where leaders share their experiences so we can learn from their successes and be inspired by how they overcome adversity. My name is Anthony Codispoti and today’s guest is Chad Capooth, Vice President of Operations at Denim. They are an all-in-one financial platform specializing in flexible factoring solutions that help modern freight brokers, trucking companies, and 3PLs manage working capital, carrier payments, and back office processes. With significant milestones, including processing over $2 billion in payments since its founding in 2019, Denim has quickly become a trusted name in the FinTech industry. As Vice President of Operations, Chad focuses on driving innovation, launching new financial products, and collaborating with leadership on strategic initiatives. His background spans marketing, business development, and operations management, making him an expert in growing businesses and creating efficient systems. Under his guidance, Denim has continued to scale its services while keeping customer satisfaction at the core. Today we’ll explore his journey, discuss key lessons learned, and uncover how he’s helped Denim embrace challenges and opportunities along the way. Now before we get into all that good stuff, today’s episode is brought to you by my company, Add Back Benefits Agency, where we offer very specific and unique employee benefits that are both great for your team and fiscally optimized for your bottom line. One recent client was able to add over $900 per employee per year in extra cash flow by implementing one of our innovative programs. Results vary for each company and some organizations may not be eligible.

To find out if your company qualifies, contact us today at addbackbenefits.com. Back to our guest today, the VP of Operations of Denim, Chad Capooth. I appreciate you making the time to share your story today.

Chad Capooth : Hey Anthony, I appreciate you having me on. Excited to share it and tell everybody a little bit about factoring for those who don’t know what it is.

Anthony Codispoti : Actually, let’s start there. That’s a great place to start. Is what exactly is factoring?

Chad Capooth : Yeah, this is a question I get asked a lot. It’s an elevator speech. I’ve practiced quite a few times as there’s kind of multiple ways to explain it. The easiest way to explain factoring is we are purchasing another company that counts receiveable at a discount. So we are giving them 95, 98, 99% of their AR value. We wait for their debtor to pay so they don’t have to wait. So we give them that cash flow day one versus waiting net 30, net 60, net 90, so on and so on. So that’s the simplest. It’s buying AR at a discount.

Anthony Codispoti : And so then you take on the risk of potentially not being able to collect on that receiveable, is that right?

Chad Capooth : Correct. We take on the risk and the waiting. We also do things like the billing. We do the payment application when the payment comes in. And so we do the collection calls if needed. So we take on several different services, but at the end of the day, exactly right. We buy the capital. We take on the risk for your customer to pay.

Anthony Codispoti : And this isn’t exactly my area of expertise, but if you’re talking about taking one, two, sort of 5% as a fee, it sounds like it’s much cheaper than, I don’t know, kind of taking on traditional forms of debt or maybe even selling off some equity in order to be able to sort of bridge that gap or to fund growth. Yeah.

Chad Capooth : I think it’s a great product. If you’re not looking to take on debt to raise capital for your company, this is a way to do it. Many other countries have this as a mainstream product. It’s not been a product that’s been widely known and popularity in the US, but that’s growing and changing quickly is more technology and creative are coming into space to kind of renovate it and bring it up to speed with the rest of the industries.

But it’s a fantastic product. It provides that working capital day one. And usually we can do it within an hour of you submitting an invoice to us.

We can get you that capital. So it’s a great tool. I think you mentioned the cost. I think if you look back 10, 15 years ago, the cost wasn’t really competitive with banks, but because so much technology has come in, because so many other people have entered the space, the competition has gotten stiff. And so now rates are very low.

And so if you can go grab those one or two percent rates, yeah, you’re talking about 12 percent money, but it’s always working capital, right? There’s not like a drawdown. You don’t have a certain amount you can draw from the bank. Like if the bank gives you a hundred thousand dollar limit, that’s what you can draw down.

Then you have to pay it back. Working capital, factoring, every time you get an invoice, you can sell it to that factoring company. So it’s kind of this, it kind of grows with you type of product. And then it comes at a really good price.

Anthony Codispoti : And so when a client signs up with you, are they just selling you some of their receivables? Or is this they’re signing up to do it all with you?

Chad Capooth : Yeah, for denim, we allow you to pick and choose the receivables or the customers you want to factor. Other factoring companies may ask you to factor everything. You may negotiate a rate that’s based on the volume you’re going to submit. That might kind of say you need, how much you need to submit. But I did it, we kind of believe submit the debtors or what I call customers, what we call debtors, that you want to factor. And then if you have ones that pay in really quick terms, you don’t have to submit those to us.

And likewise, if you want to submit debtors to us, but don’t take the financing, we’ll still do the collections and the payment application for you. So we offer kind of a lot of flexibility. And we think that’s kind of one of the separators for denim as compared to the rest of the factoring industry.

Anthony Codispoti : So you mentioned that factoring has not been as popular here in the US as some other parts of the world up until now. Why do you think that’s been correct, Chad?

Chad Capooth : Yeah, I think, you know, if you look at the kind of the US and how we’ve done business, how we’ve raised capital as companies, I mean, that debt has been a very powerful tool for US companies. So that kind of overshadowed everything. And banks have a hard time getting comfortable with factoring. It’s a lot more manual process. When you talk about pushing an invoice, we are buying that invoice from you. And so from the client’s perspective, they just send it to us from a factoring perspective, we’ve got to make sure the paperwork’s there. We’ve got to make sure that we are okay with taking on the risk with the customer you submit. Then we’ve got to build out, collect and apply the payment.

So there’s a lot of overhead work that goes into it. So that kind of kept a lot of banks out of the industry. I think the second piece is, again, looking way back in the early late 90s, early 2000s, there was a lot of them, actually coming out there that were not always above board on how they did things. And so they would charge extrovert fees, they would hold clients in terms that were just not reasonable. And so this has just created a lot of bad stigma for factoring. But if it’s grown in popularity, a lot of people in the market, they want to do it the right way now. And so that’s what’s happened is it’s, it’s, it’s terms are acceptable. These are acceptable. And so it’s really kind of start to blossom.

Anthony Codispoti : And I understand your first job out of college, National Bankers Trust was kind of your introduction to the whole factoring space. How did that come about?

Chad Capooth : Yeah, that’s, that’s, that’s funny story. So I graduated from University of Tennessee in Knoxville, 2009. That’s kind of right when the economy took a, took a turn for the worst, the housing market wasn’t doing great. And so jobs weren’t out there, there weren’t a ton of them. And, but I ended up going on a DC fishing trip with a friend. And on one of the guests that joined on that DC fishing trip ran a factoring company.

His name was Mark Bergen, and he was one of the partners at National Bankers Trust. And I was like, oh, I’m looking for a job. He’s like, well, do you want a factoring?

I’m not a clue. And he said, well, you know, we need collectors. And I said, great, I’ll take it. It’s a Memphis home city. Perfect.

Let’s do it. So I kind of started there and collections probably took me at least six months to really get an understanding on how factoring worked, all the, all the moving parts of it. And the more I kind of started to grow at that company, and the more I started to learn, I just fell in love with it. It’s, it’s absolutely fascinating product. And there’s untold potential that you can kind of branch out into with factoring.

So that’s what kind of got me started. And I’ve pretty much been in factoring some form of fashion since then. And I still think like, even though the bar’s been raised and we’re seeing a ton of growth in factoring, there’s still tons of potential there. And I think you’re starting to see why so many people, especially technology companies, companies like denim coming in to disrupt the space because the potential is there. And the, the catalyst for that is technology.

Anthony Codispoti : So you worked at a company called TransVac Capital for a while. And I understand you and the, your boss there actually went off and started your own company in the factoring space. Tell me about that. Yeah.

Chad Capooth : I went up to Salt Lake City after National Bigger’s Trust. They were also factoring company, primarily specialized in factoring freight transportation, trucking companies. And I met a gentleman named Whitley there. He was the owner and president of the company and just really got along with it really well. Helped him run the operation of the department, gain some efficiency increases. In fact, we, we got to a point where it was good enough for him to be able to sell the company and something he’d been looking to do. So we were able to, I was able to help him facilitate that sell. And at that point it was being sold to a company, I think out of one of the Carolinas. And so I wasn’t quite sure what I wanted to do as any kind of time you go through that acquisition. There’s a lot of questions and he kind of talked to me and said, I have a crazy idea.

You know, I can’t go into straight factoring, but I’ve got a concept of taking what is the concept of factoring and apply it to e-commerce sellers, people that sell on Amazon, Etsy, Walmart, all these online marketplaces. And we talked about it and it sounded like a crazy idea, but the more we talked about it, we, we figured out some ways that we could through technology make it happen. And so we entered that space and it was a really, really cool experience. And we, we saw a lot of growth there when, especially when COVID hit and it was really awesome. So I really appreciated him giving that opportunity and learned a lot from it. But yeah, it was still kind of crazy looking back. Like we, we took what’s basically this financing product and gave it to e-commerce sellers, something that no one has really been doing up to that point, because it’s such a high risk.

Because if you think about these e-commerce sellers, they don’t have real estate, they don’t have commercial buildings, you know, they basically selling product out of a garage or maybe they have a storage space. And so it was, it was definitely a learning curve and definitely a great experience.

Anthony Codispoti : Was that something that you felt like had long-term legs to it or were you sort of finding cracks in the foundation because of some of the lack of collateral issues you mentioned?

Chad Capooth : I think there’s a lot of legs to it. I know there’s still a few companies out there that are there. I think one of the difficulties that we ran into is because there’s potential there, companies like Amazon and Shopify moved into that space.

I’m not 100% sure Amazon still have it, fairly positive Shopify. But they have their own lending arms to their own sellers now because it’s, it was such a lucrative profitable area and it benefits them, right? If they keep their seller in business and their sellers can take more inventory, that’s more stuff for me and you to go buy on Amazon. So it’s, it’s definitely still got a ton of, ton of potential. Just, you know, as a, you know, as I mentioned my first job in BT, I kind of worked up through the risk ladder there, kind of running the portfolios. So as a risk person, it was always a little bit difficult for me to get comfortable with the risk overall because of the things you mentioned, but I still think there’s a ton of potential there. Again, like many industries, technology is kind of the unlock. Yeah.

Anthony Codispoti : So how did the opportunity to join Denim come about?

Chad Capooth : I was still kind of running Transfac, sorry, e-commerce or finance at the time, but I was really kind of wanting to get back into factoring, more traditional factoring. It’s just, it’s where my knowledge was, it’s where my expertise was. And so I kind of started just searching LinkedIn and there was this company called Denim and they had a post up there and the more I read about it, you know, they position themselves with a tech platform that’s in factoring. And so I felt like this was always a big missing piece for factoring.

I mean, I think about some of the competitors that went up against the years, we’ve all kind of did the same way. I mean, we have fact machines, emails, print off documents, scan them back in, but no one are really making this headway with technology. And I think there was time to bring forward and somewhere, right, with OCR technology, scanning documents, but it just, it wasn’t there. But when I looked at Denim, they were doing it. And they were doing it with your technology play. And I thought, here’s a company that wants to disrupt the industry.

Here’s a company that’s going to disrupt the industry. And so that was so enticing. So I applied and happened to be a good match and went through the interview process. And the more I talked to the leaders, B and Sean, though, the more I realized just how truly vested they were with technology. And so that’s, that was kind of the nail in the coffee for me as I got to carry here.

Anthony Codispoti : Is it, Chad, you have mentioned the word technology multiple times here in our conversation. Why is technology such an important piece of all of this?

Chad Capooth : Yeah, I mean, first of all, I love technology. So, you know, I, I was bringing up, I tried to be on the kind of the front runner of the edge of new technology, but for factoring, especially, I talked about earlier, I mean, when my first stop, we got paperwork via fax and email. So literally fax machines printing off paperwork, we would then take that paperwork, someone had to manually review it, manually scan a van, then we had to manually make approval rate, manually send the money out.

And so, you know, I think at one company, I counted 12 manual touches to fund an invoice. And so your overhead was always going to be tied to your growth. So if you brought in 10 more clients, you have to hire a new client service rep, you have to hire a new processor. So it just, it wasn’t scalable, right? And so it was hard to make that money cheaper because it was so much overhead involved. And so the more we could introduce and the more we could inject technology, the more we could kind of curb that, that OPEX upward trend and start to kind of really lower OPEX, lower that spend and get it to a point where we could bring on $15 million more of AR, but only maybe have to hire one person to take it. And I will say that has become so much more evident so with the injection of AI, right? I think there’s a ton you can do there.

But Denim’s done an incredibly well. You know, we, most companies our size would be double our employees. And because we’ve been able to leverage all the tools that have been built for us, we can handle a lot more per employee than traditional factoring.

Anthony Codispoti : Why focus specifically on the freight industry, transportation?

Chad Capooth : Yeah, I mean, I think the freight industry was kind of always been a big target for factoring. I think they’re the way that the bills and the payments of those bills kind of progress makes it perfect. So in factoring, you typically have a status data paperwork, you have the carrier invoice, what we call it the bill of lading, and then the rate confirmation. So it’s like three documents that are, while every company has their own different version of these documents are all kind of standard. And then it’s extremely common for those customers for our clients to pay anywhere from 30 to 90 days, sometimes 120 days.

And trucking companies, especially they have a lot of drug expenses, fuel, tires, insurance. And so they can’t wait these 30, 60, 90 days. And so you get that classic price, that capital crotch where you’ve done the business, you’ve done your service, but now you’re waiting on your debt or the pay.

And until that debt or pays, you’re kind of out of that capital. So it’s, it’s really just all the ingredients are there to make the most sense. And so that’s, I think that’s why transportation has really been popular with in factoring, but there’s a bunch of industries that are factoring companies that specialize in them. But I think transportation has always been kind of seen as the, the great stepping stone, the kind of entry into it.

Anthony Codispoti : So I’m trying to wrap my head around some of the technology, excuse me, that you guys have. So are you doing like a direct integration, you know, right with their billing software? Are you still kind of getting some like PDFs or like some manual, manually like printed out, you know, bills sent over that you guys then have to either use some manual or some tech process to get into your system?

Chad Capooth : Yeah, we, we are definitely integrated. A lot of what the freight brokers even that’s basically what we call TMS is transportation management systems or software. And there’s some big ones out there like McLeod and, you know, Ajax. So there’s a bunch of them out there that, that do these TMS is which kind of help arrange the freight, keep everything organized. And so we’re integrated with, with a lot of these TMS systems. So that allowed for the back end seamless transition for our client and us. So all the paperwork, all the documentation comes through with a click of a button from our client. So we don’t see as many manual jobs submitted through denim, but we also built the porter out that makes it nice and easy for them to upload their documents. Our system goes in and leverages AI to read through the documents to identify what every line is in that document or if there’s potential issues, right?

Like, if there’s page two, three, and six, but no page five, our AI says, Oh, we’re missing a page and can let the client know, Hey, you just forgot this page really quickly. So that, that allows us with a lot of kind of seamless integrations. We have connections into accounting software. We have our own integrated ledger report, which helps clients quickly import into their accounting software. The transactions have been done. We’ve leveraged technology to allow what we call our real time payments, which is our express factoring, which we can literally get funds into your account within minutes of approval.

So it’s faster than a wire. And so these are just some of the technologies that we’re using back end to kind of make this our goal is to be seamless, right? Like, we don’t want our clients having to spend hours with us a day to get the jobs funded. We want them to spend seconds. And so that’s really what we’ve been able to accomplish. So it’s, it’s been awesome to see it’s, I think there’s plenty of room that we can still improve on. And we’ve got some innovations on our product roadmap that I think are going to make even a better experience for our clients and try to roll them out. And one thing that’s been really cool working at Denim is when we say we can knock something out in a month, they knock it out in a month. And from my experience of previous stops, it’s usually delayed a couple of months, right?

It’s, it’s delayed the way it takes time, but man, we, we, this engineering product team, they can, they can knock things out, lightning fast. And every time I say, I’m doubting, I’m proven wrong. So it’s, it’s been humbling too.

Anthony Codispoti : That’s awesome. Yeah. Sort of the classic technology timeline is take whatever they tell you and multiply it by two or three. Yeah, sounds like you guys have, you’ve got a great team in place that’s been able to overcome that trend. So Denim’s been around for just a few years, but you’ve already processed over two billion, that’s billion with a B in payments. Aside from the technology, which is obviously hugely important in that, what else has made that kind of growth possible?

Chad Capooth : Yeah, I mean, outside technology, it’s people. And I think those are pretty close at the head, right? I mean, you could build all the technology you want, but if you don’t have the people behind it to help facilitate it or run it, you’re going to really struggle. So we built a culture at Denim that we really, really build this kind of teamwork culture, innovation culture, but we want our employees to be builders, right? And so we have built our software on a foundation that allows the, you know, employee all the way from a client service rep all the way to a self person to marketing and be able to build within our software and innovate. And so what’s been really cool is to see the ideas come to life for some of these employees who have, whatever we started from scratch and brought it into production to help facilitate our clients, facilitate our operations run more efficiently.

So it’s a people thing, it’s a culture thing, like you’ve got to have both. I know like in the news, we see a lot of companies, they laid off to higher departments and relying on AI and some of the backtracks and are still going forward. And I’m not saying that’s not a, I’m not saying that’s a bad division, but so my seat, you always have to have people in place. And so giving them the tools to kind of grow in what the technology, learn how to leverage it, learn how to build with it has been absolutely crucial for Denim. But we have extremely talented people in almost every department. Our leadership has been extremely talented. And so these are things that have definitely progressed and helped. You know, you could have built the best technology in the world, but I think without our people, without making the right hires, it wouldn’t have mattered. And so it’s, it’s right up there. I mean, people with people in culture are huge.

Anthony Codispoti : Do you get involved in the hiring process?

Chad Capooth : Yeah, of course. I think especially when it comes into my department, I’m pretty heavily involved. We go through about four to five interviews that process where we’re trying to not only gauge technical skill, but how they’re going to fit. You know, I think what a lot of people on, I’m sure you’ve heard previous people that come on the shows, like someone could be very technical sound, they could be very knowledgeable, but if they’re not a culture fit, it could be very detrimental. So like we try to very, especially being our most first company, like we have to very, very heavily index on a culture fit. And so anytime I can help step in and weigh in on any one of those wares that we’re trying to discover, I’ll jump in there and do that. But yeah, we typically involve about three to five people per interview process to make sure we are hitting the right buyers. And then one of our two co-founders, we usually will be involved on the last step to even share further that like, it’s a good culture fit because while we have ourself’s technology and it’s important, culture is really, really big here.

Anthony Codispoti : How would you describe the culture there?

Chad Capooth : Innovative builders and teamwork. I kind of know I said that in the previous question, but that’s that’s what we’re going for. I think what’s really awesome to see is like when somebody has a big win and they share it, the whole company chimes in, right?

Everybody’s supporter behind it. When we have a problem or something not working the way everybody jumps in to assist, I think, you know, one of the biggest areas to have friction, two big areas we can have friction with in factoring is between sales and risk and operations, client services and risk. And those are two kinds of departments that, you know, have a little bit different objectives, right? But the cool thing about the end of the interview, all the departments work together to make sure, like, we’re bringing on the right clients, but we’re also not like soaking out the pipelines where we can’t bring on clients. So that kind of like, you know, that kind of like inner teamwork has been crucial, but we have builders, we have people that want to innovate, we have people that want to make a difference, make an impact and disrupt.

We’ve got a lot of employees here that have been out of our manufacturing companies, they’ve seen the way it’s done. They believe that there’s a better way to do it. And they’re trying to do that. And they’re going out and accomplishing that. And we give them the tools to keep building on that. So that building mentality is something we really index halfway on. We want our teams not only to be type forward, but if you think it’s a good idea, build it. Get it as far as you can. And if it takes something that’s a little bit above, which are capable of it takes programming that’s above, we’ll partner you with an engineer, we’ll partner you with product person, and we’ll get it built.

And we see this every quarter, something getting rolled out that was built by not an engineer, but built by a client service rat, a salesperson, a risk person. So I think those will make our culture special.

Anthony Codispoti : How are you able to assess that culture fit in the interview process?

Chad Capooth : Yeah, I mean, we do obviously face-to-face interviews or Google Meet videos. We do what’s called test drives where we kind of give different scenarios, we’re looking for key metrics. But I think most of all, it’s just experience. You go through enough hiring, you start to know for those key traits, those key information on the resume that just kind of stands out that says they’re a builder.

And we don’t batter 100%, right? Not every company that fit for an employee. Like, I think it’s a two-way street. Not only do you have to be a good fit for the employee, but the employee has to feel like you’re a good fit.

And so that two-way street sometimes it could be difficult to make sure, but I would say we bat 95% of the time. We are hiring really, really expert people, but it’s through experience of like knowing what to key on an interview process, but that test drive. And then it’s all five of us, four of us, six of us, how many are involved in the interview process coming together and saying, this is what I found out.

This is what feels really good. Something I’m a little concerned in, you know, and we talk it out. And so we try to make a group decision on the hire, which I think is also big. I think if you start howling in silos, I think your accuracy on the hire starts to go down because you don’t get those outside perspectives. And so maybe I’m hiring for what I call a portfolio risk manager, but maybe I want to know what my VP of sales says, or maybe I want to know what my VP of product says, because they’re going to have a perspective I don’t have. And so I think that’s really important.

Anthony Codispoti : And they’re going to get to work with that person on a regular basis. And so they’ve got some input on what that dynamic should feel like. Correct. Yeah. So Chad, give us a little bit of insight into what you do as the VP of operations.

Chad Capooth : Yeah. It’s a great question. I try to wear multiple hats, not high. I do wear multiple hats. So everything from managing our client services to managing our risk to helping establish our strategic build outs and designs, especially when it comes to our client experience and our employee experience.

I’m pretty heavily involved with sales, not the closing of the sales, but right, how can we bring the client on safely, actually fit them into our portfolio? Does it make sense? These are all the 10,000-point views that I’m hoping influence. I’m also trying to get space to our employees to grow as well. And so while I could probably pick up a lot of slack and say, let’s do X, Y, and Z, I want to be able to delegate and say, hey, this is your time to do a cross-departmental project. Let’s see how you get it done.

I’m going to assist. But really, from operations, it’s client service, it’s risk. Are the two big ones, when you look at factoring, to get involved?

The third one is probably collections. And so I always say, and especially in factoring, and I’m sure many industries that kind of lend money, it’s really, really easy to send the money out. It’s really hard to get the money back. And so that collection and how we do it, because there are different ways we can go with collections. We could be very, very, very hard on collections.

We could harass the debtor, call them every other day to get paid. The interesting about factoring is that we are stepping into a contractual relationship between two parties. So we are this third party that’s coming in. And so we have our clients that are running for some debtors that provide them a lot of revenue, a lot of business. And so if we do two harder collections, when we ruin our relationship, they’re not having to accomplish anything, because now I’ve lost that business for them.

If we go too soft, and these days to pay are trending out, and it’s taking longer to collect money back, or there’s more defaults, they’re not having to accomplish anything. So there’s always this finesse of like, how do you come in as a third party into this two-way contractual relationship and do it seamlessly without upsetting the client or upsetting the debtor? So there’s always this kind of…

Anthony Codispoti : There’s a delicate balance that you’ve got a strike there, right? And this might be unfounded, but when I think of collections, I think of people being very aggressive, calling, texting, I don’t know if they’ve got your email, setting mail to your house, and you’re nodding your head, like, yeah, that happens a lot, right? Yeah.

Chad Capooth : 100%. I mean, some factory companies are over index on it, right? And so they don’t care if they ruin that client’s relationship. One thing I didn’t, and we pride ourselves on is like, we want our clients to grow because the client grows, we grow.

So that means maintaining their current business relationships, but also making sure that their debtors are paying on time. And so there is this balance and, you know, a plug technology again, one thing we’re working on is our AR automation workflow, we’re kind of using these backend rules and AI agents to help us with our collections. So now we can white label our collections, we can make it look like it’s coming through our client, we can change the tone, the verbiage, the messaging, the cadence, where this has typically been very heavily dependent on people. We are trying now to interject more AI to make it feel more natural in the emails to give a better, client better experience.

So we can actually kind of customize it at that level versus a widespread policy. But it is, look, I’ve been, I’ve ran a lot of different collection departments, every single factory company that have stopped that have run collections. And we’ve lost client, we’ve lost our clients customers because a collector went too hard, right? They, they call too much, they email too much.

I’ve been on the opposite of them, where we didn’t catch something because we didn’t make the call, right? And there is, you said it, there is this balance and finding that balance is, it’s tricky. But it’s absolutely crucial to do it, right? And so usually once you do it, right, what’s the client’s comfortable, you’ve got a client that’s going to stick with you for a really, really long time, because it’s, it works really, really well. But the more friction you create on the other side, you’re probably not going to keep that client around for long, they’re probably going to burn, turn out, and then you lost that client. So, you know, how do you make that a better experience for them? So we’re going back to your original question.

Those are kind of the ways that I can interject myself from the VP of operations role. It’s, they’re just, their balance is on every single area you look at, you know, we talked about collections, you’re exactly right. There’s also a balance to the risk side, right? I am, we are, as a factory company, we are extending credit for our clients to their customers. Most of the customers aren’t publicly traded. They are private companies. And our customers are getting half a million to a million dollar contracts a month. So that’s half a million to a million dollars in AR that we’re going to purchase every 30 days. And I’ve got to make sure we’re comfortable enough purchasing that. And I’ve got to rely on what little information there is out there. So if I go too hard on credit and say we can’t do that much money, the clients aren’t going to come on board or they’re going to go to another factory and come in the will, if I go too light and something goes bad, then I lost a bunch of money. So there’s all these different walks. Client services are different, right?

It’s a difference of being proactive, client friendly versus maybe the clients go to you for three weeks and gave you bad paperwork that’s fraudulent. And so how are you going to approach that? And so there’s all these different scenarios. They all take finesse, which I think provides a really unique challenge for factory companies.

Anthony Codispoti : Chad, give me an example of a calling script that would be too aggressive versus one that you feel like is more representative of the approach that your team would take.

Chad Capooth : Yeah, I think with collections, it’s probably the easiest one. I think the call script that’s outside of frequency, the call script that is too aggressive, it’s calling us that are, you know, hey, Mr. Walmart, you’re 23 days waiting with your payment, what’s going on? If you don’t give us a payment, you know, by end of day, they’re working up our collection efforts and possibly pursue legal action against you.

You bring out the legal queue, it’s done. I mean, that relationship is done nine out of 10 times. So that’s too aggressive, right? Where an alternative approach is, you know, hey, you said you’re going to pay this day 30, it’s day 45. You know, do you have all the paperwork you need or anything else we can present to you to get this paid?

Would it be possible to get a payment status by end of week? And so I think that approach is a softer approach. I think each approach has to be tailored through that final customer relationship, client-deader relationship, because there are debtors out there that will purposely not pay their bills to float their cash balance. You’ve got to start to recognize who you go a little bit hard on, who you go a little bit soft on. But more than that, the easiest indicators, how frequent is your client running for that debtor? If this is a one-off load, you can go a little bit stiffer in your approach.

If this is a recurring customer for your client, then you really need to find the cadence. And I think it’s about building that relationship too between that between our collector and that person, the AP department. And if our collector can build that relationship with John or Jane Doe in that AP department, you catch more flight through honey, right?

You’re going to get better answers and you’re going to get more insightful information. So it’s just kind of tailoring that message, that communication, that frequency of communication on a per relationship basis.

Anthony Codispoti : I want to kind of go about this from a slightly different angle. Specific case studies can be really helpful for people to kind of wrap their heads around in terms of the value of the service that you’re providing. Can you think of a specific case study, a specific customer instance, where you guys were able to go above and beyond for a client that was facing a critical cash flow issue and really help them in a big way? Yeah.

Chad Capooth : Gosh, this has happened quite a bit to me throughout my career. I mean, like I said, the goal is we want our clients happy when our clients continue in business because

Anthony Codispoti : if they’re growing, we are growing with them. Literally we grow with them, right? And so like, I think one instance that’s came up very fresh and very, very recently is we have a client that was running with a decently regular debtor and they had a good amount of their business concentrated with this debtor. And unfortunately, this debtor filed Chapter 11 bankruptcy. Chapter 7 originally, that was the Chapter 11. So they followed bankruptcy. So the obligations, the debt, the amount, oh, they’re not getting paid to our client.

Chad Capooth : We have two choices in the factory company we can basically make at this point. We could say, all right, well, we’re done. We’re going to do everything we can to collect after your debtor, but we’re not funding you anymore. You owe us several hundred thousand dollars.

It’s over. Or we can work out a payment plan that works for both us and the clients. And typically it’s a little bit more favorable to the client, right? I mean, we’re on the hook for a bunch of money. So we’d like to figure out a way to get this paid back, but we want the client to keep going. And so what we’re able to do when we’re able to do this scenario is work out a payment plan with this client that works.

Right? We said, OK, what if we did this a month and we’ll revisit this in 90 days? In the meantime, we’ll still keep pursuing this Chapter 11 bankruptcy with the claim in the bankruptcy courts. But in the meantime, you let us know you work with us.

So we check in with them about once a week. How are things going? How are your cash flow going? And we’re working really hard to keep them afloat while we kept this going. And this is a blueprint that I’ve been able to accomplish in fact, we’ve come in to have been able to accomplish time and time again.

It’s just these workouts in here. It’s really easy to react and overreact. But when you do that, typically it’s not a good outcome. And so in this instance, we’re keeping our client going. They’re still able to pay their employees. They’re still booking freight. We’re still making headway on getting this paid back. And if it continues this way, we’ll be paid back in eight months. And more than likely, I would like to hope that this client’s probably going to be a client for life with us because we stuck through it with them when things got tough. Where we could just put them out of business. And then he’s out of business.

The 20 people employees are out of a paycheck. And what have we really accomplished? Maybe we get our money back. Maybe we don’t. So I think that’s something that comes up all the time.

I think other scenarios are, again, going back to kind of that collection. It’s like, hey, if I come aboard, I’ve got these five debtors. They are very sensitive. They don’t want people calling them. So we find out solutions like frequencies or maybe they email the debtor for us and CC us on it. So we found out all these solutions to kind of like fit our product with a client versus trying to fit our client into our product.

Anthony Codispoti : I like that. How would you characterize your clients? Like, who are they? What size companies? They’re trucking companies? Are they also warehouse companies? Like, help us wrap our heads around who you serve. Yeah.

Chad Capooth : Our two niches are freight transportation and freight brokerages. So freight transportation, the truckers that are running the loads across America, the 18-wheelers you see all throughout your city and on the highway and interstates. And then freight brokers. Freight brokers are the ones who are arranging the freight between shippers and carriers. Not every shipper wants a department dedicated to arranging that freight. So that’s where freight brokers come in and involved. We range everything from start-ups, day one start-ups to people who are flipping $100 million a year in revenue for freight brokers for trucking companies. It’s people that have one single truck.

They’re out there on the road driving it to people who are running fleets, 50-plus trucks. So we can kind of take on a vast array of size. But we have what we consider our ideal client profile. That’s typically people that are doing anywhere from 50 to about, you know, 50 million of AR a year or a year, sorry. It’s kind of our ideal client profile. But we’re able to kind of stretch thin above and below that to bring on these clients.

Anthony Codispoti : Chad, what’s your superpower?

Chad Capooth : Don’t be modest. I think I’ve always been able to connect with people really, really well and kind of have a high degree of empathy and kind of, you know, emotional intelligence with them. I think I try to take the time to understand where they’re coming from, where their pain points are, and understand maybe how Devin has done something or another factory company that I’ve worked at has done something that kind of creates this pain point for them. And it’s like, how do we get past that? But when you create problems for a client, they usually kind of let you know, you email or video chat. They’re usually a little bit upset. And so it’s like, how do you calm down that conversation and say, okay, well, here’s the problems.

Here’s where I can fix these problems for you. And that’s something I’ve always been good at is kind of let me be involved in not only the sales side, but the operations side both. And that’s kind of where I bridge the gap. So I’ve been, you know, a lot of times called onto a sales call with a salesperson to hear this unique position a client’s in or this unique scenario they have, like how do we make it work and how do we make them feel good that we can make it work. And on the flip side, like workout scenarios with clients, I’ve always been very good at deescalating the situation and then listening, empathizing and figure out how to like move forward with it. And I think like, I think that’s a skill that I kind of undervalued myself. But as I got older and progressed through my career, it’s not everybody natural tendency to be able to do that. And I’m not afraid of having those hard conversations or calling that client that’s really, really upset and no one wants to talk to because they’ve got a bad email exchange with them.

But for me, it’s like, well, look, we’ve caused a pain point or this client’s experience of pain point. This is why they’re lashing out. This is why they’re upset.

Let’s identify it. Let’s let’s figure out a way to fix it for them. And I think it’s really important.

It doesn’t matter if you’re 20,000 in AR, if you’re 2 million in AR for us, it’s like, we want to figure out the pain point and solve it because if you’re having it, odds are we have someone else in our portfolio, if not more, that are also experiencing it. So that ability to kind of like establish that connection with clients on the emotional but also the understanding and empathy level. I think it’s always been something I’ve been really, really good at. And the more I get older, I kind of recognize it that like, that’s a skill that like has really kind of helped me through my career.

Anthony Codispoti : Chad, in my experience, a lot of times growth comes from the most serious challenges that we face in our life. I’d be curious to hear about a serious challenge that you’ve overcome. What was it? How’d you get through it? And what did you learn?

Chad Capooth : Yeah, I think there’s a lot of different ways I could go with this question. As our relationship is factoring and not challenging us to make a career business standpoint, I think the biggest one for me was learning that risk, credit and factoring are really tough. And I just talked about building this kind of emotional relationship, these connections, this empathy with clients. And I think that’s really important. I think the other thing on the flip side of that is like, I’ve also got to realize like, this is a business and sometimes people will say and do what they need to do to get by.

And so, you know, where are you on one of my first stops, National Maker’s Trust. I worked closely with the client for about four years, trusted them. You know, they said they were going to do something, they did it. And about towards year four, then that year four, came to find out that they spent the last six months submitting fraudulent paperwork, fraudulent invoices, they got in a really, really bad spot. They couldn’t pay their people. And that took their word for it.

You know, that the invoices were good, they’re going to pay, the debtor is going to pay, don’t worry about it. And so, built up $300, $400,000 that they are, that was not good. And so, that took a lot hard. Like, I’m not sitting there and trying to tell you this is like some sob story, but that one took me hard. Like, my trust was broken, right?

Like, I want to believe people when they tell me something, but that kind of broke my trust. And it took me about a while to like realize like, yeah, they commit a fraud, but it took me a while to understand why they did it. They were in a really bad place. And so, their fear was they couldn’t pay their employees. And like, I started thinking about like, how bad would that be?

If you had to reach out to 50 people and say, I can’t cut your paycheck today. And so, like, it kind of led me to an understanding like, I’m not advocating you should ever commit fraud, but it led me to understanding why they did it. But it took me a while to like do a risk roll where I wasn’t over indexing on risk and being too conservative.

Like, it took me a while to kind of bounce back from that. And just realize like, I take the motto and whether it’s a healthy motto or not, it’s, I take this model, it’s not a matter of if but when. And I kind of apply that to a lot of things, especially risk. And it’s not a matter if a client goes bad or win a client goes bad. It’s not a matter if it goes bad, but when it goes bad. And so I’ve kind of adapted this model, I try to present the best client-centric foot forward, but in the back of my mind, I’ve always had to kind of weigh like, on the flip side, what if these aren’t a rosy as they appear? What if there is something going on?

And so it’s just kind of trust that verify methodology that this brought to me. But I think anytime I take a loss, it stings. And it just could be from the fault of the client or no fault of the client, right? Like if a debtor files bankruptcy, and it sucks, but it stings. I should have seen a kind of, I should have seen the slow, slow payment, slow terms of payment.

I should have seen the news out there that are kind of investing in it. So anytime I take a loss, it really stings. But that first one really, really stung. I mean, I had built up a high level of trust with this individual and never thought that did in the way it did.

Anthony Codispoti : How did that situation actually play out from a business perspective? You guys just ate the loss? Yeah.

Chad Capooth : Well, no, we, we kept them around until we were able to, to be made whole. You know, we immediately reached out in front of the client. They kind of broke down, told us the story why, what happened. At that point though, the trust was gone.

But if we, we shut them off right then and there, we were out the money. And the clients were up and down, but they just pay back, just give them time. And so we kind of went to this, what I call this full audit proof approach to the client.

So everything that’s submitted to us was me and we were reviewed, checked. And so it took them about six months, maybe nine months, but we were able to kind of click back through payment terms. It wasn’t easy. It wasn’t easy with the client. It wasn’t easy for us. Once we did get paid back though, we helped move into a different factoring home as that kind of trust had just been violated at that point. And so we, you know, we did think it was fair to him and it probably wasn’t good for us to continue on.

But amazingly, we were able to work out. But when that happens, in that moment, all I see is that’s $300,000, you know, out the door, gone. And, you know, at that time, I was a, I was either a credit manager, I think I was a credit manager. And so like that was my number one objective is don’t lose money. And here’s the $300,000 loss. And I don’t care what business you’re in, I don’t care what side you are. I mean, that’s a lot of money and that’s staying.

Anthony Codispoti : So, well, not only was the money staying, but like you said, you had like this strong personal relationship with them as well. And so like that personal trust feels violated. And so it’s like this, this nasty like one, two punch that you’re trying to work through.

Chad Capooth : It is. And it sticks with you. Like, you know, I talk to clients probably every day and like, all through workouts and there’s countless times after that. But it’s always now in the back of my head, it’s like, are they being 100% transparent and honest? Is there something else going behind?

Have you caught it? And I think it’s kind of made me better at my job. But at the same time, I don’t also love having that attitude because I do want to believe in people. I do want to believe in the good and people that are within us. But now I’ve also got a healthy appreciation that it’s between you, the factoring company, and the ability for the client to keep their business growing and paying their employees. There’s a good chance they’re going to do what they need to do.

Anthony Codispoti : Yeah. Well, if nothing else, like kind of the silver lining and all that is now you’ve got your antenna up, like you’re a little bit more aware of these kinds of situations and you’re on the lookout for them.

Yeah. And I’m kind of curious, Chad, are there, if you had to recommend to our listeners a particular resource, maybe it’s a book, a podcast, a course, something that’s been really helpful to you?

Chad Capooth : Yeah, there’s one book that’s kind of stuck out with me. I mean, one thing I’ve been a few startup companies and companies are going just a little bit beyond startup, but it’s the Messy Medal is the name of the book.

I think it’s by Scott Belsky. But it kind of really talks about the challenges from going from startups to succeeding and what that Messy Medal is. It’s where most companies live, right? I mean, it’s when you reach a huge Fortune 500 company, there’s a lot of processes and put in place that have been refined, refined, refined and worked really well. A lot of people call the red tape, but there’s a reason why it’s there.

It functions very well. But when you’re the startup stage, you know, I always like to it’s a giant cruise boat compared to a small speedboat. And as a startup, you’re a small speedboat. You’re pivoting and changing on a dime. It’s really easy to turn that ship.

It’s really easy to make changes. But that creates this Messy Medal. It makes it harder to manage through the process changes, through the change process with your employees, through developing policies that fit it. And so you write a policy three months ago, now your product grows out something new, and now you’ve got to write a whole new policy that contradicts that policy, that you’ve got to reteach your team.

So there’s always this Messy Medal. And so I probably recommend it because it can feel overwhelming. It can feel like you’re drowning. It can feel like you’re not accomplishing anything or you’re just running in place, but really, really speaks to like, we’re all there.

We’re all trying to navigate through it. And it’s like, even though sometimes it doesn’t feel like you’re making change, you are making change. And that boat does start getting bigger and bigger. And so take hold of this moment because it is your company grows, you’re not always going to be able to change on the dive. So like those changes you want to make, and when we do make a change on this positive, it feels really good, but it gets harder as that boat gets bigger, takes a lot more to turn that cruise ship. And so like, take a hold of this, don’t get overwhelmed, learn how to grasp it, learn how to manage through it, and learn how to reach your team through it.

Anthony Codispoti : I wonder if there is maybe like a more specific, concrete example of you going through that that we could talk through, because I think so many business owners that I’ve talked to, so many employees in their careers that I’ve talked to, they go through what you’re describing, this sort of messy middle where it’s like, am I doing the right things? Am I making progress? I don’t know. Like I just feel like I’m sort of stuck in quicksand here. Yeah.

Chad Capooth : I mean, I’ll give you a quick example of kind of like the back and forth of that messy middle and like making changes on a dime. And, you know, we, we, let’s not dive into the politics behind it, but tariffs have been a hot topic now since, since the beginning of the year. And we are in an industry that, that lends money based on our client’s customer’s ability to pay. And so how will these tariffs impact it? And so as the pause and unpause these tariffs have, have, have changed, I’ve gone back to my portfolio risk manager and be like, we need to be more aggressive. We need to be less aggressive.

We need to be more aggressive. And that’s really difficult as a risk person to change the direction or the rest of your being on these decision making. And so that, that’s really tough to like handle that change management and there. But, you know, I think beyond that, I think like, as you roll out a new process, it becomes really tough.

As you, as you roll out things that are innovative and technology driven, they tend to disrupt everything you’ve built prior to that. And so, you know, it’s AR automated collections, they’re a really good example of it. I think if you’ve asked me about it’s been a factoring collections, there’s always been a manual phone call thing.

But now here we are, we are making a change going from having a person make these individual calls and emails to now training people how to manage these leverages that the AI of the system will use to make these calls on behalf of you. And it’s a different concept. It’s, it’s, it’s completely different mindset. So I’m asking this portfolio risk manager to say, Hey, everything we’ve trained on for the past two years, everything you’ve trained on prior to that, forget it.

Here’s how we’re going to do it going forward. And so like, when you’re in that moment of that transition, things feel frustrating, things feel tough. It feels like I was just ever going to work, how can you see the light at the end of the tunnel? And as a, as a leader, sometimes maybe I have those doubts, but I can’t express those to my team members because I want them to embrace this change.

And so like, that’s where it gets really messy in the middle. It’s like, how do I, how do I display this level of conviction that this is going to work to my employees so they embrace it, but also handle this kind of doubt in my mind. And I think that’s tough. And I think the best way we navigate it is just embrace it the best we can, understand that there’s going to be kinks, there’s going to be things don’t operate perfectly, you know, great. But if you have a good product and engineer team behind you, which we do, it does make a lot of you, because we can make those changes and fixes really, really quickly. But it’s always at that change mindset is so difficult. Especially the bigger the change, the harder it is to get all employees on board and to make that mental model shift, because you odds are you’re going to have one or two for a certain employee.

So it’s just going to happen. So that messy middle to me is a lot is that kind of change management system. But something as simple as making credit decisions can also be there because you’re, you’re changing on a dime. And so you spend two weeks saying, Hey, Sarah’s are going to be impacted here. We need to, we need to bring it back, we need to bring down a notch.

Like these 20 in debtors are going to be hit by. And then the next week, it’s like, well, it’s on the pause, we’re good. Do whatever you guys need to do. Go back to your class. And we just told no to and say, Yes, they’re like, it’s, that’s painful.

Anthony Codispoti : It’s a little bit of whiplash. Yeah. And, and we hit on something, you know, particularly interesting in your comments there, which was this idea of how do you show confidence to your team when behind the scenes, you’re not really sure. Like, you’ve got to sort of put like the good front on, hey, guys, we got to keep doing our jobs, things are going to be okay. And in the background, you’re scratching your head, like, I don’t know which way this is going to go. I’m not sure like how to react to this.

Chad Capooth : Yeah, I mean, it is tough. I mean, anytime you’re messing with collections, like they are automation, right? It’s, it’s tough because I want the innovation. I want to change because I can see how viable it is not only to us, but our client experience.

Now they have a say on how we do certain wording, we can white label it so it makes it look like it from them. These are all really positives. So everybody, the back of mind is like, what if this doesn’t work? What if our average days to pay goes from 35 days to 45 days? Well, look, yield is very important to a factory company’s how fast we can get the money out. And then back in is really, really important.

So if this starts turning up, you know, I’m going to have to scramble to figure out, or you know, where are the operations going to scramble to figure out how to, how to correct this, how to fix this, you know, express factor, you know, where we’re paying clients within minutes. Great product. Fantastic product in my mind. What if fraud gets in the door and work $300,000 out the door in seconds, right? So there’s always these like lingering fear in the back of my head. And I try not to let them rule on how I give my opinion or decision, but they’re there and they’re real. And, and so it’s, you have to learn to say there are risks, there are challenges. But one thing that’s been administrative great is we have two shots, we have Sean Smith, who runs our product and Sean Voh, who’s our CTO. And so like, the more I work with them, the more I express my concerns, they’re like, Oh, here’s what we can do. Like here’s how we can put in, you know, boppers that help you there or leverage. And so that, that, that, that definitely helps. But yeah, that, that fear is always there.

It’s like, that kind of total catastrophe, like it all falls apart. What do we do? How do we pivot? How do we get back, of course, quickly? Because the longer you can’t just sit there and bleed out, you have to stop the bleeding as fast as possible.

Anthony Codispoti : Yeah. Any daily practices, Chad, that you have found helpful, either to start your day, to keep your day on the right path, keep yourself centered?

Chad Capooth : Yeah, I mean, I think, you know, for me, it’s really important to the first two hours of every morning, I kind of try to dedicate not to meetings, but to myself to get aligned on what I want to accomplish that day, who I need to reach out to, you know, are they an employee that I need to have to make sure they’re doing okay?

Need help, need more training? You know, do I need to prep anything? I think that’s really, really important is to make sure you start your day off with that kind of clarity, that kind of thought process and nothing I don’t take morning meetings. But I try not to because I think that’s really, really important to me to set the foundation.

Some people might say that the day before in the afternoon, for me, it’s that kind of early, quiet morning where I can kind of get that accomplished. And then more on a not a day’s necessary daily cadence, but one on one with your employees. I think weekly one on one to your employees is extremely important.

I think what that one I want should be an avenue for your employee, your voice concerns, problems, changes, opinions, positives, whatever it may be to you. I don’t want to steer that conversation. I want to let them steer and kind of say, you know, here’s what’s going good, here’s what’s going bad and talked about it.

Like, how can we come up with an action plan to resolve that? So that’s, that’s, that’s really important. And then, you know, I think it’s important to set daily, weekly, monthly goals that are transparent for your, for your department that you’re, that you’re operating. And it’s like, how do we get there? Here’s what we want to accomplish today. And so like, you know, those daily goals don’t have to be something new.

It could just be the same thing. Like, hey, we will revive the maximum level of service quality to every single client today. Or, hey, we want to process as much invoices as possible today and say yes, as much as possible today.

Those are really important. But where do we want to be at the end of the quarter, right? And it’s our goal to reduce our client ticket count and then desk ticket count from, you know, 10, 10 per client to five per client. Yes. Well, here’s why we want to, what is that metric?

Anthony Codispoti : If you don’t mind, Jen, explain that the metric.

Chad Capooth : Yeah. So we, primarily our support calls, our support from our client comes in through emails, we use Zendesk to handle those, those, those tickets, those emails that created. And we kind of view every time that the client has to tell us a problem. It’s a problem with our system or problem with our process.

Can we fix it? And so we feel like, if we can reduce the number that our clients have to email some of, that means we are reducing the amount of problems they face. And don’t get me wrong, you get some emails that are just basic questions or just telling us news updates and those are great. But we do have a problem, we want to resolve it and then like take that away.

Anthony Codispoti : So as an indicator for you, you know, hey, is there something that we need to fix in our internal process?

Chad Capooth : Yeah. I mean, the best client, the best client service call you can get is no call, right? Because that means everything’s functioning right, everything’s working. Maybe the second best, maybe the second, maybe the first best is a referral from a client.

But second best would be just no call at all. Can you see your system, is your process or your people functioning in such a way that the clients aren’t hitting a friction point? And that can be a tough one back to me because there are natural friction points. But for those part, our tickets, our tickets low because we are constantly trying to improve. And, you know, one thing we do at Denim, I’m sure other places do, but we have a cab, right?

We have a place where some of our clients can come and we do a quarterly meeting with them, wear your pain points, how can we make it better? And so we try to take those learnings and actually apply them as quickly as possible. And so I think that’s a big difference for Denim.

But yeah, back to that metric, that’s why we feel like the less tickets we get, it’s the less friction our client has when they do a third with our classroom.

Anthony Codispoti : That’s the question I should have asked at the beginning. What’s behind the name? Denim. I mean, it’s quite a domain name. You guys have denim.com.

Chad Capooth : Yeah, we were actual before that, but there was someone else in the space, not a competitor, but in that same space. So we had to make the transition. And Denim is something that kind of really stuck with the owners.

I wasn’t on board when they made that decision. So I’m 100% sure on the story why behind Denim, but it was short. We wanted something short that was catchy, the domain needed to be available. I think there’s also something about, you know, Denim, you know, kind of an all American, you know, Denim genes that kind of reads this idea of kind of growth and fertility that funds kind of the growth of these companies.

And so that was really important. But it’s catchy. It’s short.

And it’s something we’ve always appreciated. I think the longer the name that the harder it is to like really kind of submit yourself in there. But that was some of the thought process. That’s something that the owners could probably give you a better, better example of why they went with Denim. But I know that if the lengthy process, they had several good names and eventually settled on Denim.

Anthony Codispoti : Yeah, it’s a solid one. I like it is catchy. And it’s a single word domain name. Those are hard to get these days.

Chad Capooth : Yeah, everyone’s all get emails from people saying they don’t like the genes they bought or they brought their own side genes. So everyone’s will look at those and get a kick out of them.

Anthony Codispoti : So it just got one more question for you, Chad. But before I ask it, I want to do two things. First of all, I’m going to invite everybody listening here to go ahead and hit the follow button on your favorite podcast app. We’ve had a great interview today with Chad Kaputh of Denim.com. And I want you to continue to get great interviews like we’ve had today. Chad, I also want to let people know the best way to get in touch with you. How would that be?

Chad Capooth : Yeah, with me. You can email. It’s probably the best way if you if you got questions, concerns, this product interests you. If you just want to know more about it, feel free to email me. That’s ckaputh at Denim.com.

So ccapooth at Denim.com. Pretty quick to get back to you. But I’m always happy to have these conversations in any regards. I think factoring, while it’s a growing industry, there’s still a lot of light that could be shed on it. And I think there’s still a lot of positivity that can come from it. And so maybe it’s a good thing for you.

Maybe it’s not. Reach out, happy to have a conversation. You just want to know more about it. Even if you just want to have a conversation about it, I’d be happy to have an answer.

Anthony Codispoti : That’s generous of you. And we’ll make sure to include a link to your email and the show notes. But last question I have for you, Chad. You and I, we’re going to stay in touch and say a year from now, sitting down, you’re celebrating one thing. What is that thing?

Chad Capooth : I’d like to think I helped Denim become the disruptor in this industry. And why I think we’ve made a headway, I think there’s a lot more to go. And there’s a lot more process change in technology we can interject in this industry and continue to take this industry from what has been archaic into this century and provided better client experience. And one thing is I’m sure we’re all heard about by now, but I think AI is going to play a big part of that.

And so I really like to be one of the front runners, one of the leaders behind. How do we take a process that’s outdated and now leverage it with AI and what does that look like? I said earlier on the show, I think a lot of companies are going and say, well, hey, we can wipe out a whole entire department with AI. It shouldn’t be the goal. The goal is to be how can we build AI or AI agents that can do what we need to do, but still need to be managed by a team?

Because these things aren’t at a stage where they’re perfect. And so how do you build these processes around them? And how do you do it effectively? That’s not only good for your business, but good for your client. So I want to continue to be a disruptor.

I want to be able to look back in a year and say, I helped, you know, I’m not going to program the code, but I helped, I helped kind of design it, I helped kind of lead the journey. And like, we have now been or created a product, we have now made a product that is so disruptive, people are knocking down on our door to get to it. And I think we’re on that direction. And that’s been dinner’s vision from day one is kind of these leaders in technology. But it’s really important to make that like also make sure the client experience is there.

And I think that can be easy to get lost. So I want to continue to be an innovator, and I want to be able to look back and say, man, we changed it, right? Like factoring is a completely different animal now because of the technology differences, you know, we made a dinner.

Anthony Codispoti : Well, and I like what you’re hitting upon there, Chad, sort of this balance of, you know, how do we use the tools and AI is a big one lately to make us better at what we do, make the customer experience better, but not replace the human element wholesale, you know, I, a subscriber to, you know, several software services. And I’ve seen a trend recently where not only are, you know, more of the chat bot response is coming from AI. And I’m fine with that. But when the AI can’t get the answer right, I need to be connected with a human being.

And increasingly, it’s becoming harder and harder to get to a person to the point where, you know, one of the softwares that I rely on, on a regular daily basis, very integral to my business, it takes at least one week to get a human reply now. And so that’s not what you guys are talking about. You’re like the human element is still very important. How can we, you know, bring AI and bring the software in to help us be better at our jobs and free those people up to do more of those parts of the interaction that require the human experience? Yeah.

Chad Capooth : I mean, first of all, the AI chats, I understand it, but like you, they can drive me up the wall. And I agree with that. I was flying on a major airline the other day and my flight got canceled. And so like, I’m trying to go on a website and change it, but it won’t let me. So I reach out on the chat and get the AI chat bot.

It takes me an hour to get to a human. And it’s it was not a great experience, right? And look, I’m sure they saved a ton of money with it.

But for me, not a great experience. And so like, to go to answer now to answer a question, like, I think the role of AI, where it needs to be in the days, it needs to empower your employees, right? And it doesn’t mean you need to replace whole department. It needs to say, okay, we have five people in collections a day. So how do we take AI and empower them to continue doing their job, but take on five X the book, where previously it was a flat one to one ratio, no per dollar per collector ratio, how do we now five X them? So how do you take your employees that are there? And how about you build a foundation where you’ve got to because it takes employees to build a foundation.

It just does. And so if your goal is to replace them, then I think you’ve missed the point. Your goal should be to empower employees with AI and let them continue doing their job more efficiently.

And then they win and you win, right? And so now you’re five times 10 times 50 times your size, but your off x been your spin on your operations employees or your spin on your employees overall. So your revenue per employee, skyrocketing, but your spin had gone down because you’re even power them, right? And so you know, how do we take what used to be one client service rep could handle about $7 million, $10 million of AI, before we had to hire another one. Now how do you empower them? And now they can take on $50 million, $75 million because AI is there prompting them, helping them, providing them feedback, points of interest, ways of phrasing.

So like it’s remarkable. So it’s got to empower. It’s not to replace.

It’s got to be to empower. And I think that’s the way you get ahead. And I think we’ve probably seen companies that have tried to go the replace route and now they’re starting to backtrack it, right?

And they’re starting to hurt. And I think that’s AI is just, it’s not perfect. And it’s going to take humans to kind of guide it. But more importantly, you need to build it to empower your employees otherwise.

Anthony Codispoti : Empower, not replace. Chad Kaputh, VP of Ops at Denim. I want to be the first to thank you for sharing both your time and your story with us today. I really appreciate it.

Chad Capooth : I appreciate having you on, Anthony. This is the blast. Have you talked about it anytime? So if you ever want to have me back, let me know. But if anyone’s interested in factoring, reach out or search the web. There’s a ton of information out there. But Anthony, I have a blast. I really appreciate you having me on.

Anthony Codispoti : Folks, that’s a wrap on another episode of the Inspired Stories podcast. Thanks for learning with us today.