David Enghauser is a senior vice president with MB Business Capital. Based in Chicago, he is responsible for underwriting new senior debt facilities of $5 million to $50 million typically used for acquisitions, recapitalizations, refinancings, debt restructurings, growth financing, debtor-in-possession financing, or turnarounds. With 20 years of banking experience, he works closely with a borrower’s management team and advisors to expedite the loan approval, legal documentation, and customer on-boarding processes.
Prior to joining MB Business Capital in 2008, Enghauser served as a business development professional focusing on providing asset-based and leveraged cash flow solutions to borrowers and intermediaries across the Midwest. He earned his MBA from Loyola University of Chicago and holds a bachelor’s degree from the University of Dayton. He is an active member of the Chicago/Midwest TMA Chapter and recently completed a three-year term on the chapter’s board of directors.
Q: What might people who know you only in your professional capacity be most surprised to learn about you?
Enghauser: I’m pretty much an open book. What you see is what you get. I’m a bit of a music fan with wide tastes. I’ve been a Deadhead since high school, and I’ve seen different iterations of the band play maybe 20 or 25 times.
But my son loves heavy metal and has taken me to a couple of shows. I also have singers ranging from Eminem to Frank Sinatra on my playlists. So, going from a mosh pit at a metal show to dancing at a Dead show is a pretty wide range.
Q: I would think so. Did you follow The Grateful Dead around when you were young?
Enghauser: I saw shows in a few cities a couple different summers.
Q: How did you gravitate into asset based lending (ABL)?
Enghauser: I’m not sure anybody who comes out of college thinks they’re going to take the ABL world by storm. I don’t know that ABL gets much exposure in undergrad finance classes—maybe it gets some in graduate school classes but not in undergrad.
I was hired by a big bank out of grad school and did that for a couple of years, but I found the routine was less challenging than I wanted. Then I was recruited to lead the sales efforts of a boutique ABL lender here in Chicago, and I had the opportunity to learn the business from the founders of the firm. It was just fascinating to me.
I was lucky to be able to learn all facets of the business while developing my own network of referral sources and working with small to medium-size business operators to address their credit needs. I found those situations were always unique and had certain dynamics to them that you didn’t find in more conventional deals. I really took to it, and I’ve never looked back.
Q: Is it that you get a chance to be more creative with asset based lending that appeals to you?
Enghauser: An ABL deal generally poses different opportunities and challenges than what I’ll call a traditional middle market or corporate banking deal. Often, borrowers are not familiar with an ABL deal structure. The deals usually have special circumstances among the credit criteria variables, whether it’s financial performance, leverage, collateral, or any one of a host of other deal points that need to be addressed. As lenders, we want to put money to work, but when you have an ABL scenario, there are different governors in those deals than what you might find in a traditional middle market or corporate banking structure. Finding the appropriate governors that can work for all parties makes it interesting.
Q: I think what you said earlier about people not generally coming out of college and going into this work right away also applies to turnarounds in general.
Enghauser: I think so, although from what I understand there are more B-schools today that are offering classes in corporate restructuring and turnaround work.
Q: That’s true. I spoke to a young attorney recently who came out of school and went right into turnaround and restructuring work. He had focused on that and had a clerkship in Bankruptcy Court. Things have changed over the years.
What have been some of your favorite or most gratifying situations that you’ve been involved in, particularly with companies in the turnaround/restructuring space?
Enghauser: For me it’s really not the engagement or the deal, it’s more about the people involved. Working with turnaround professionals always has an interesting dynamic. I’ve said for a long time that a good restructuring professional plays the role of psychologist for the first 30 days of an engagement. In a restructuring matter, there are so many different parties with varying agendas and views on the facts. Plus, there is often a fair bit of tension surrounding the process. A good turnaround team needs to bring together all of these disparate groups, ease the tensions, and get unfiltered facts for the best outcome to occur.
I’ve always enjoyed working with folks who can handle those stressful situations with a deft touch. At the end of the day, when the matter is resolved or settled and we can come away with a feeling of mutual respect, if not friendship, then it’s pretty gratifying. Those are situations where you have a pretty high probability of working together again.
Q: It sounds like you’ve had a very satisfying career.
Enghauser: I enjoy what I do for a lot of reasons. First, no two opportunities are the same. I’ve had opportunities to look at companies across a wide range of industries. Additionally, I’ve worked with some really top flight management teams. It’s been a gratifying experience to see so many different companies and learn how and why the people who run those enterprises have been successful.
Q: If you could start your career over again, would you do anything differently at this point?
Enghauser: I try not to second-guess myself and say, “What if?” I’ve been extremely lucky to work with some really good people who have taught me a lot during the course of my career. I learned a while ago that it is important to learn something new from every deal I work on. I try to stay positive and avoid making the same mistake twice. I don’t think I’d do anything differently. I certainly try to avoid repeating prior mistakes, but I wouldn’t do anything differently.
Q: Do you have any advice for somebody who was thinking about getting into the industry or someone who was new to the industry?
Enghauser: That’s easy—I’d tell them to be a sponge. Learn as much as you can from everybody you talk to. Listen, don’t speak. Ask questions and sit back and learn from others. Meet as many different knowledgeable people as you can. Go into each situation you are asked to work on and try to learn something new.
If you’re coming into the industry and you find a passion for it, you really need to develop your network. That takes time and effort, but it’s critical for your long-term success. Try to understand the goals of all the constituencies in a deal so that you can add constructive value to the process—it helps get to a solution that everyone can move forward with. To do that, you need to get a decent amount of deal experience. To get deal experience you need to meet a lot of people, ask a lot of good questions, and be a proactive part of the deal process.
But first, you should be a sponge and soak up information.
Q: Do you have any advice on how best to develop your network?
Enghauser: I think being active in TMA can be really helpful. I can’t tell you how much it has helped me in terms of meeting people who have different positions in a process, whether they be restructuring advisors, attorneys, investment bankers, intermediaries, accountants, investors, or business operators. Everybody plays a role in the process. I was able to generate a lot of relationships through active involvement in TMA.
When I joined TMA over 15 years ago, I tried to go to as many networking and programming events as I could. I’d go to the programming events because you could walk away with at least one nugget of knowledge that you could file away as helpful. But, if I could also walk away from that event with 10 new business cards of people that I hadn’t met and set up five to 10 new meetings, all the better.
Q: You’ve been quite active in the Chicago Chapter, having served on the board and in other positions. I take it that’s helpful, in addition to attending the networking and programming sessions.
Enghauser: I’ve had the privilege and honor of spending a lot of time with TMA. I was co-chair for a couple of different committees, including the Awards Committee and Sponsorship Committee for years. I also co-chaired the Executive Speakers Forum for three years running, when we had Gov. Mitt Romney one year, former Secretaries of Defense Leon Panetta and Robert Gates another year, and Treasury Secretary Timothy Geithner three years ago. Working on those events was an extremely rewarding experience.
A few months ago, I came off a three-year directorship on the board for the Chicago Chapter. The chapter has given me a lot in terms of helping add to my knowledge base and build my network. You have to give back, and I really found my time on the board to be very gratifying.
Q: With all the changes in the industry over the past few years, is TMA as helpful now as you’ve found it to be in the past?
Enghauser: I think TMA is a great source for educating those of us who deal in unique financing opportunities or unconventional matters to gain insight on trends within the industry. Whether they be legal and case matters or changes in regulations, I think TMA does a great job in presenting updated information in very timely and concise formats.
I think as people evolve in their careers, TMA can always play a role but maybe in a slightly different fashion. When you’re just coming into the business and need to develop your network, there’s no better way. Over time, I think it’s a great way to give back to the community and at the same time stay abreast of current events within the industry.
Q: What about outside the office? What are you passionate about away from work?
Enghauser: First and foremost, my family. It’s really exciting to watch teenagers as they mature into adults and make thoughtful decisions for themselves. I think it’s a lot harder today to be a teen than it was years ago, and I find myself really interested in following their maturity, development, and interests.
I love Chicago and all that it has to offer. It’s a great city. Although I’ve lived here for 30 years, my wife and I will try to find something new in the city, whether it’s a neighborhood we haven’t spent much time in or a drive in a different part of the suburbs. It’s just such a great place.
I also find myself spending a lot of time in the kitchen. Cooking is a hobby, a passion of mine, one that I’ve had for a long time. Cooking allows me a little creative relief. I can’t draw. I can’t sing. I can’t play a note of music. But I can put a pretty decent meal together. There is the element of instant satisfaction when you put a taste of something you have been working on in your mouth and you know right away whether it’s going to make it or whether it’s an utter failure. I’d rather host a dinner party for 10 or 12 and serve them three, four, or five courses in a dinner than entertain 50 people.
Q: Where did your interest in cooking come from? Is it something that was always with you, or was it something you tried out of the blue one time and found you liked it?
Enghauser: As I mentioned, it’s my creative valve. When I was in college I worked in restaurants, doing everything from working as a line cook to a bartender to a server. I saw how commercial kitchens work, and found it fascinating. My wife and I love to go out to dinner. We never try the same thing so that we can taste each other’s meals. So if I can see what, to me, is a different or unique ingredient combination or flavor profile, I’ll file it away and maybe see if I can make that work in my own kitchen.
Q: I understand that you once spent a day with Charlie Trotter and Emeril Lagasse. How did that come about?
Enghauser: Twenty years ago, when the Charlie Trotter’s restaurant would get solicited by nonprofits for donations, they would offer the organization the ability to auction off a position as a “guest chef” for a day. My wife and I were at a benefit and saw “guest chef” in the auction, and my wife said, “You need to bid on this.” I said, “Honey, we don’t have the money to do that.”
She put the winning bid down, and I was guest chef for the day. That meant I got to spend the afternoon in the kitchen—we paid for me to work in their kitchen. It was fascinating to me just to see how a world-class restaurant that at the time was the dining destination in Chicago was run. It happened to be a day that Emeril Lagasse was in town for an event he was doing with Trotter. I had the opportunity to spend a little time with both of them. It was a lot of fun. I have signed menus from both of them hanging in my kitchen.
Q: Do you have a favorite cuisine or favorite dishes?
Enghauser: I know what my kids’ favorites are. My daughter loves when I do ribs; my son loves when I make jambalaya. I personally like to do seafoods and soups, but my kids aren’t big seafood eaters. To me, the more challenging or the more unusual the cuisine, the better. I’ll try dishes that other people wouldn’t normally order.
Q: Being from St. Louis originally, how did you react to the Cubs finally winning the World Series in 2016?
Enghauser: It was great. Having been born and raised in St. Louis, I bled Cardinal red for a long time. But, I’ve now lived in Chicago for more than half my life. My wife is from here, and our kids have only known Chicago as their home. There’s no place I’d rather be on a Friday afternoon in June, July, or August than at the corner of Clark and Addison.
If it’s the last day of the season and the Cubs are playing the Cardinals and the winner goes to the playoffs and the loser goes home, I’m rooting for the Cubs, because there’s no better place to be than Chicago when the Cubs are in the playoffs. That doesn’t mean that I root against the Cardinals. Usually when the Cubs were so bad that around Memorial Day they were mathematically eliminated from playoff contention, it would be OK to root for the Cardinals. But that may be changing for a while, and it’s all good.