NOVATO -- Novato-based Warren Capital is charting a path for the future as it celebrates its 30th anniversary, seeing continuing growth from a long-running business model that focuses on providing financing and advising for some of the North Bay’s most well-known industries.
It is an approach that founder and CEO Warren "Clay" Stevens said has helped the firm weather a number of recessions and to carve a niche among lenders serving the North Coast region and beyond. And while a new platform that allows equipment vendors to offer in-house financing for customers through Warren Capital is expected to play a growing role in the coming years, Mr. Stephens pointed to trends like the recent surge of interest in craft food and beverage as a sign of the ongoing merit of the company’s original formula.
[caption id="attachment_68352" align="alignright" width="200"] Clay Stephens[/caption]
“The business plan said, ‘Food and beverage, health care and business services,’” Mr. Stephens said. “Thirty years later, that’s still our focus.”
Mr. Stephens founded Warren Capital in 1984 after more than 15 years in East Coast corporate finance and banking. A Bay Area native, he relocated his family to California and settled in Sonoma County.
“I came up here and fell in love with Sonoma County,” he said. “I loved the semi-ag, good business community and proximity to San Francisco formula."
Business grew quickly in those years -- Mr. Stephens said his relationship with a number of East Coast lenders eager for business in California helped him to structure competitive financing arrangements that provided an alternative for the structures typically offered from a traditional lender.
“The thing we try and do is not just be a one-size-fits-all,” he said. “We add new ideas, new capital and deep relationships.”
Notable customers in the North Bay have included Frank Howard Allen Realtors, the 103-year-old North Bay residential real estate firm acquired by NRT in 2013, Stark Reality Restaurants, which operates a number of high-profile restaurants around the North Bay and Manzana Products, the Sebastopol-based apple producer that merged with a French agricultural cooperative in 2012. Warren Capital has also provided financing to a number of distribution companies and surgery centers in the region, and today has completed over $1.8 billion in financing for over 4,000 clients across the United States.
“$600 million of that $1.8 billion has been new capital we’ve brought to the North Bay,” Mr. Stephens said.
Completed loan volume is around $75 million to $100 million annually, with most loans ranging from $5 million to $10 million, he said.
Focusing on core industries has helped Warren Capital weather several recessions, tying the company to relatively stable sectors and limiting its exposure to the tumultuous real estate market during the recent downturn, Mr. Stephens said.
“It goes back to what I call, ‘steady Eddy’ companies,” Mr. Stephens said. “They got us through the Great Recession, and other recessions before that.”
Today Warren Capital has funding relationships with around 25 entities throughout the U.S., acting as manager and administrator for financing partnerships involving those firms. The company also lends from its own capital base.
“We’re the spear head. A client deals with us. But behind us, we have a very deep capital base,” he said. “Even though we’re a small company, we have financial resources all over the country.”