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Aug 10, 2022

13 min read

Why Sabah chose Highbeam as its trusted banking partner

Sabah Shoes is a New York-based footwear brand selling top-of-the-line leather shoes, entirely handmade by a family of craftsmen in southeast Turkey.

In the second installment of our three-part series, we sat down with Mickey Ashmore, Founder and CEO of Sabah, to unpack his crucial decision to onboard with Highbeam. We cover:

  1. Why Mickey needed a financial partner with proactive, actionable insights
  2. His process of outgrowing banks, credit providers, and accounting firms
  3. How Highbeam helped build a mature financial stack that could scale
It’s a massive relief to know that there’s someone that has my back financially. With Highbeam in my corner, I can focus on building Sabah in a thoughtful way.

How to Recreate Offline Experiences on Digital Platforms

As it goes for most retailers, launching the first Sabah Shoes website was a game-changer for the brand. They suddenly went from one-on-one sales to having intercontinental reach.

At the same time, Mickey doubled down on translating the richness of the offline experience to the ecommerce realm. While difficult, the team maintained the Sabah identity by leveraging:

  1. An “Analog” Website — With a pared-down site, team members still had the opportunity to connect with and directly assist online customers.
  2. Tangible Contact — Every individual who buys a pair of Sabahs receives both a custom email and a custom note in their shoebox.
  3. No Paid Media — The Sabah team didn’t purchase their first digital ad until two years ago. Every early ecommerce acquisition came completely organically.

As Sabah began to build out its ecommerce platform, Mickey champions a lack of posturing and overt selling when it comes to the brand’s digital identity, social media presences, etc.

Why Sabah Couldn’t Find a Trusted Financial Partner

Despite Mickey coming from a finance background, he knew that he needed a financial partner that deeply understands ecommerce to stay on top of Sabah’s unique growth needs.

Over the years, he’s tested out an endless array of banks, credit providers, and accounting firms.

However, it became clear that large banks provided zero value-add and simply didn’t care about helping merchants grow. On the debt side, Mickey points out that most credit providers providing cash advances were often predatory and lacked transparency around interest rates.

Finally, while prior accounting firms helped close Sabah’s books, they only offered generic income statements and basic balance sheets. Yet, these statements weren’t actionable and forced Mickey to decipher what actions to take entirely on his own – with zero guidance.

It became clear to the Sabah team that none of these three options – banks, credit providers, and accounting firms – actually met their financial needs as a fast-growing consumer brand.

As separate entities, each of these three groups didn’t have incentives that were aligned with Mickey’s – which is to grow his business profitably and sustainably.

Banks want you to hold money with them, credit providers want you to take out money and pay interest on it without defaulting, and accounting firms want to do your bookkeeping and get you out the door as timely as possible. The missing piece for Mickey was a financial partner with skin in the game – someone who wants to build a relationship and grow alongside Sabah.

When Sabah’s team met Highbeam this year, it instantly clicked – one financial solution that provided integrated banking, credit, and insights designed for ecommerce brands.

Mickey needed a partner that’s trusted and can help him make good financial decisions and proactively stay on top of finances and cash flow – which every brand lives and dies by.

By using Highbeam as Sabah’s banking and credit provider, our team has the right foundation to sustainably scale the next $10M.
Highbeam - Credit Comparison

The Early Days: Understanding Financial Stack Maturity

As Mickey looked to upgrade Sabah’s financial stack, he researched available options for credit — a more interesting path for founders of brands that don’t raise VC money.

The first credit Mickey ever received was a merchant cash advance from Sabah’s processing partners. Early on, he used Square and Square Capital and received similar offers from PayPal.

These offers typically hovered around $30,000–40,000 — smaller amounts with decent rates. Mickey didn’t feel it was worth it at the time to explore anything else given Sabah’s size.

He eventually received and used a line of credit until it expired. As he explains, the only reason he could receive it in the first place was his parents’ support.

Outgrowing Old Processes

The big shift happened as the brand grew significantly in the last three years. Mickey realized that, in order to continue scaling the business, he needed to hold more inventory.

While turning inventory over quickly is fundamentally a positive metric, meaning there’s clear demand for the product from customers, Sabah was often too conservative in its forecasting. Because Mickey didn’t yet have the right financial partner in his corner to help accurately forecast demand for his fast-growing brand, the company lost out on valuable sales.

Because Sabah had been profitable, he was able to fund most of the inventory growth from cash. However, going into a new year, he needed even more to expand their product range.

Additionally, Sabah had recently opened a new store plus a workshop in El Paso. They kept growing until Mickey finally hired a finance lead to help with budgeting at the end of 2021.

All of my better options came a little too late. Coming into 2022, I could no longer fund Sabah from the same cash reserves and cash flow.

The Ongoing Issues with Banks, Credit Firms, and Accountants

Last November, the writing was on the wall: Mickey foresaw a cash crunch come February. He knew he needed significant financial support and started exploring his options.

Not Too Big: The Issue with Big Banks

He started with his legacy bank, Bank of America, where he’d been for 17 years. He’d likely funneled several tens of millions of dollars through his accounts.

When he turned to his credit tenant to fund Sabah, they simply told him Mickey would no longer be a good fit for them since they weren’t set up to help him or his business.

As he puts it, with larger institutions, most processes are based on filling out forms and receiving an automated yes or no. When you receive a no, there’s essentially no nuance to it.

Because Mickey didn't demonstrate profit on his personal tax returns in 2019, that alone disqualified him from many opportunities in the minds of most big banks.

Not Too Small: A Lack of Support

As an alternative, he began seeking out a small local bank to seamlessly work with, which proved to be a much more difficult task than anticipated.

Mickey explored several options to try and get out of his financial bind, and ended up taking a revenue-based merchant cash advance. He simply recounts, “They're simply awful.”

While you may receive a nice deposit, you have to pay it back extremely quickly. Mickey has trouble imagining how anybody can use MCA products to scale in a way that's healthy.

At the same time, it was a necessary step to get to where Sabah is now. Today, Mickey works with a bank to receive an SBA-backed loan for $800,000 and to refinance the MCA advance.

Mickey began working on the loan in January and has seen half a year fly by while carrying out the time-consuming, antiquated process with heavy paperwork and faxes.

In a few words, the process has admittedly been “a huge pain in the ass.” As a small business without a CFO, he’s stuck doing it all.

I tried to juggle it all: making our financial engine run while still running Sabah as a whole. It wasn’t easy at all and the pieces began to fall apart.

Enter Highbeam: A Financial Partner Designed for Ecommerce

Looking beyond his initial, impersonal attempts at financing, Mickey realized he wanted to share the same business-client connection with his bank that Sabah shares with its buyers.

After discovering and onboarding with Highbeam, he found that authentic connection. He highlights two key elements of the platform that make it so welcoming:

  1. A deep focus on being present to help clients
  2. Channeling that desire to help into understand founders and their businesses

For Mickey, it's nice when your bank doesn’t feel like a gatekeeper looking to crack down on you for messing up a rule — but like someone actively trying to help you as a guide and partner.

When it came to Bank of America or merchant cash advance products, he explains, they frankly felt hostile and like an opponent, even if they weren’t in reality. These two would often either:

  • Be so bound to stiff rules that even if they wanted to help, they couldn’t
  • Or simply focus on themselves, closing the sale and then ignoring requests

Meanwhile, with Highbeam, Mickey summarizes the takeaway of the dynamic as: “If we help our clients get what they want, we’ll all get what we want.”

I think money is money — but the sentiment and relationship go a long way. That’s what Sabah has with Highbeam, which has made me feel comfortable.
Highbeam - Cash Balance Forecasting

How Highbeam Builds a Financial Foundation for Hypergrowth

Mickey highlights that the user trust Highbeam has built is foundational to getting both himself and other founders to adopt the platform.

His experience with receiving that traditional, SBA-backed loan has entailed a great deal of wrangling documents from the IRS, Shopify, previous loans, and accounting efforts.

The end-to-end process — from putting everything together to filling in documents to gathering even more financial statements — has been, in a word, a nightmare.

So, as Mickey tells it, “The ability to simplify that process would be incredible.”

Since joining Highbeam, Mickey is amped to bypass that high-effort, low-reward process of the past, and instead get the best of both worlds with simplified flows and high-quality credit.

Whether it’s tax compliance, fiscal planning, accounting, credit, or banking, Highbeam has delivered a proactively helpful and efficient roster of services for the Sabah team.

Highbeam stands next to me, providing a safety net and a transparent line of credit. Unlike a debt provider, I know we can build together for the long run.

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