Celtic Capital Corporation: A Legacy of Growth and Independence
Founded in 1982 by Bron Hafner, Celtic Capital Corporation began as a small, family-owned business with limited capital. In June 1985, Mark Hafner, Bron’s son, joined the company after graduating from college, marking the beginning of a significant growth trajectory. At the time, Celtic Capital had total outstanding loans of only $1.5 million, with an average loan size of $75,000. Operating with minimal equity and subordinated debt held by family and friends, the company faced challenges in scaling due to limited resources.
Over the next decade, Mark and his father expanded the company, gradually overcoming capital constraints. In 1995, Mark was promoted to partner and became instrumental in Celtic Capital’s leadership.
A Shift to Larger Deal Sizes and National Expansion
By the late 1990s, Celtic Capital shifted its market focus from small deals under $1 million to larger transactions ranging from $500,000 to $5 million. In 2024, the company increased its maximum loan size to $8 million to meet growing demand. This shift involved expanding the business development team, upgrading internal staff, refining policies for a higher level of borrower, and implementing more robust accounting and monitoring software systems. The business was leveraged with the growth that ensued.
In 2005, frustrated by ongoing capital constraints, Mark and Bron sold Celtic Capital to Discovery Bank, a small San Diego-based institution. Discovery Bank recapitalized the business, significantly improving its financial outlook. Bron retired but Mark continued to lead the company alongside Alex Falo, who had joined Celtic Capital as Executive Vice President in 1995.
A Period of Record Profits and Strategic Changes
Celtic Capital experienced a period of record profitability between 2005 and 2008. However, Discovery Bank faced its own financial challenges during the late 2000s, leading the bank to sell Celtic Capital. Mark and Alex partnered with Pine Tree Equity, a private equity firm based in Miami, Florida, to repurchase the business and restore its independence.
With this new capital structure in place, Celtic Capital expanded nationally. The company hired salespeople across the U.S., which resulted in tripling its business within three years. By 2011, the company’s lines of credit exceeded $100 million. Celtic Capital expanded into key markets including Dallas, Houston, Minneapolis, Cincinnati, and Pittsburgh, complementing its established presence in Southern California, Denver, Phoenix, and Seattle.
We are dedicated to serving small and mid-sized businesses nationwide with financing options from $500,000 to $8 Million.
The Strategic Sale to Pacific Western Bank (PWB)
In 2012, with continued success and asset growth, Mark and Alex decided to explore a sale to a larger institution. They were introduced to Pacific Western Bank (PWB), which had a strong understanding of the asset-based lending market. PWB purchased Celtic Capital, and the company continued its focus on providing up to $5 million in asset-based financing to small and mid-sized businesses across the U.S.
Although the acquisition by PWB proved beneficial, Celtic Capital longed for the independence it once had. After PWB’s merger in 2014, Mark and Alex decided to take back control of the company by buying it out with Pine Tree Equity’s assistance, regaining their ability to focus on the needs of small borrowers.
A Return to Independence and Long-Term Stability
In 2014, after a successful buyout, Celtic Capital regained full control of its operations, allowing the company to streamline its decision-making process and focus on growing its client base. In 2022, Fourshore Partners, a family office, replaced Pine Tree as the company’s equity partner, further solidifying the company’s strong financial foundation without disrupting operations.
Mark and Alex remain committed to leading Celtic Capital, ensuring its independence, and driving growth while staying true to its mission of providing reliable financing solutions to small and mid-sized businesses. The current ownership structure, a blend of equity backing and management ownership, allows the company to respond swiftly to market demands while retaining its independence.
Advice for Business Owners Considering Selling
For entrepreneurs managing independent finance or factoring companies, it’s crucial to sell only when there is a compelling reason. Celtic Capital’s history of strategic sales and repurchases reflects this principle. The sale in 2005 was intended to recapitalize the business and reduce capital costs, while the 2008 repurchase was driven by the need to exit Discovery Bank and fuel growth. The 2012 sale to PWB aimed to improve capital access, and the repurchase was motivated by a desire to return to the company’s roots and focus on its core strengths.
Today, Celtic Capital’s structure provides the flexibility needed to stay competitive while maintaining a strong foundation for future growth. Mark and Alex plan to continue running the company for many years, remaining dedicated to serving small and mid-sized businesses nationwide with financing options from $500,000 to $8 Million.