Success Story By: Funeral Business Advisor

Jersey Memorial Group
A Ministry, Story Tellers – It’s Okay to Live, Love and Laugh

By: Funeral Business Advisor

David L. Hernandez Jr., owner of Jersey Memorial Group, is truly a self-made small business success story. His foray into the funeral profession and funeral home ownership is not typical.

David’s mother, Deborah, was his catalyst for embracing funeral service as his profession. She was a pastry chef for over 20 years as David was growing up. Deborah was seeking a second career where she could make a difference. She answered an ad from a Northeast Philadelphia cemetery to sell cemetery plots. “When she took that position, I was in middle school. At the ripe young age of 13, one of my first after school jobs was to go over there help out and chase geese off the graves. I would run markers back and forth in a golf cart. I thought I was the man! So for a number of years I was exposed to the cemetery side of the business. But over those years by watching funeral processions coming in and out of the cemetery, that is where I was exposed to the funeral side of the profession. There was an aura around the funeral directors and my introduction to funeral service was born.” When I was 18, my mom had the opportunity to move to NJ and work at a cemetery there. So we moved and I was able to get an internship at the Waitt Funeral Home and I have been in the business ever since,” David related. With his work ethic and commitment to service, David acquired his first funeral home at age 27 and now owns 5 funeral homes.

David’s successful business is built on passion for service and he incorporates this passion to meet challenges that being a new firm faces today. “The perspective of a funeral home has to be similar to a ministry. We have to meet the people where they are at and by doing that, even if that means taking funeral service out of your location, you are letting people know that you are a beacon of hope in their community. We are here to help. We are here to honor their loved one. We are here to earn their trust and help them in a difficult time. And that is what we are going to do. So rather than say, we have been here for 95 years, what I have found as a first generation funeral director is that I have had to prove myself to my community. I’m 33 and I have let people know that it is my heart’s desire to help and minister to them. I consider it a ministry. Not having a reputation of many years in business, I may be the second or third phone call from a family, but almost always they come back to me because they appreciated the time I spent with them, the questions I answered and the things I said to them,” David said humbly.

David and his staff are meeting the challenges of today by changing the vocabulary of funeral service and how to work with families. “We focus on the families that appreciate funeral service, the family circle, and creating legacies,” David stated. They achieve this philosophy by having a community relations program where they work with the needs of a particular parish, the parish’s pastor and congregation. “We can honor their lives as their faith dictates and not the way we have done it for the past 40 or 50 years. More and more, as we all know, many people are not practicing a religious faith in the traditional sense, so we have had to find ways to meet their needs as well, whether it be through community organizers, hospice or even through advertising. The message we convey in our advertising isn’t about our funeral home, but instead speaks of honoring a life – that it is okay to live, laugh and love. We also use social media and send out daily email blasts with words of encouragement to keep our name in front of families,” said David.

The challenge of cremation isn’t difficult for David’s business. David relates, “For my entire career the cremation rate has been around 35% and now it is rising to 50%. I can see where it has been hard for older, generational funeral homes that have seen cremation rise and hurt their business. But for us, my generation, we see it as an opportunity in service. For us, it has always been talking to the families and seeing what they want and then creating the service. We have always taken the position that your choice of disposition is your choice. We just want to figure out how to tell the story. Ultimately, funeral directors are story tellers. We need to be co-creators in that story. The family gives us the information and we have to figure out how to get it to the public. One thing that I tell families is, as funeral directors, it is our responsibility to make sure that their guests know more about their loved when they leave, then when they entered. Funeral directing is not simply a set-design, setting up the casket and flowers, make the body look good and cross your hands and stand at the door and welcome people – but instead it is creating an experience where you are story telling. It is revolutionary.”

“An approach we have been taking, especially with direct cremation is – ‘listen, we understand that you don’t want any service or anything of that nature, but our staff will take a moment to honor your loved one before we go to the crematory. A moment of silence, quickly before we head out in honor of your loved one. I can’t tell you how many people say to me – ‘really?’ And we say, yes, a moment of silence. Looking back at this, it cost nothing to be human. This is what we are called to do. I firmly believe that funeral service is a calling. Yes, you have to run it like a business, but to take a moment of silence before you go to the crematory (where no one else is going to go) that’s where trust and integrity happens behind the closed doors of our profession,” he stated with conviction.

It is important to David to serve as many people in his community as possible and because of that he owns five funeral homes. He had built and grew his first three funeral homes with local bank financing, but when he wanted to expand to meet the needs of his community to a fourth funeral home he came up against some obstacles. With a closing deadline fast approaching and local financing options not working out, he contacted Live Oak Bank. They were able to make the deal in time for him. “Live Oak Bank has been an incredible resource for my business and a wonderful partner as well. They understand the financials of the funeral industry and they can help you obtain the financing you need because they understand what it takes for a funeral home to grow,” he explains.

David runs his business in a pro- active manner and sees this as a future trend. They handle all the arrangements and employ a fully licensed pre-arrangement director. They have a graphic artist on staff that creates portraits, brochures, slide shows, and prayer cards. He states, “Everything you can do with computer graphics today is amazing. That’s where it is going to be night and day where other funeral homes would have had to pay for that, but if you can bring it in-house – it is tremendous. Ultimately, our profession has to get back to service from an employment stand point, meaning Funeral Directors coming out of school with minors in English and History who are able to speak with families and extract their stories and be able to create poetic obituaries or be the celebrant or be the editor at the service is huge.”

David’s future goals are certainly to grow his firm. “I’ve got a long road ahead, only the Lord knows. The concept is I don’t ever want to grow faster than the good people I have. So if an opportunity comes up and I don’t have the right person to put there that shares our mission, our culture, I wouldn’t be able to take advantage of the opportunity at that time. We are constantly working on our great talent pool to help us grow for future opportunities. Providing families with legacies is what we will and want to continue for the future,” David said.

“At the end of the day, when people walk in and are grieving, in a very short amount of time we have to let them know we care about them. We feel their grief, we cry, we sit across from them and we are there to earn their trust and honor their loved ones. Let’s try to do this together. Most families here this message and it resonates.” “I love this business. It is a noble field and profession. I enjoy every day because of what I do,” said David. David’s devotion and compassion for the families he serves, his profession as a whole, his community and family are a tribute to our industry and proves success comes from a sincere heart.


Reposted with permission from Funeral Business Advisor. Originally printed in the March | April 2015 issue.

Claim Your Business by Google

Small Businesses that are online grow 40% faster than those that aren’t. Google is launching an initiative called “Let’s Put Our Cities on the Map“, to make it fast, easy, and free for businesses to get online. Google has traveled to all 50 states where they’ve helped thousands of businesses. But there’s more work to do. Only 37% of businesses have claimed a local business listing on a search engine–that’s a lot of missing information. And with 4 out of 5 people using search engines to find local info like business hours and directions, it also means a lot of missed opportunities for local businesses.

Since Live Oak Bank is a small business lender, we are huge advocates for tools that help small businesses grow and succeed. To get started, businesses just need to create an online listing and verify their business for free with Google My Business. Claim your business today!

5 Questions for a Lender in the Entertainment Industry

If you’ve been thinking of expanding, renovating, refinancing or seeking working capital for your Family Entertainment Center, now’s a great time to move ahead. Here are some common questions we hear as lenders in this industry.

  1. Is there money available?

The simple answer is, yes! Many borrowers do not understand that you don’t need a down payment or collateral to expand, start construction or renovate. If your business has cash flow, a strong business plan, and you have good credit, we’ll help you achieve your goals.

  1. Who is an ideal candidate for fec financing?

Live Oak works with business owners in the Entertainment Center space including FEC’s, Bowling Centers, Roller Skating Centers, Waterparks, Arcades and Hybrid Parks. Live Oak fills the gap in financing availability for those owners that have an established business and established cash flow, but may lack appropriate collateral to secure loans with conventional lenders.

  1. Should we be expanding now?

Now is a great time to expand! With interest rates still near all-time lows, access to capital is relatively inexpensive. Moving forward with an expansion or refinancing existing debt are both ideal in a market like this.

  1. How about valuation?

Borrowers often overlook the importance of valuation. Valuation goes beyond assessed value, appraised value or collateral and drives the type of financing available to a borrower. Taking a holistic view of valuation is key: revenues, cash flows, business plans and management are all components of value. These are things that a lender, like Live Oak Bank, look for first.

  1. Why would I utilize an SBA product?

In an SBA loan, the bank makes the loan, but the debt is partially guaranteed by the SBA. This allows the bank to provide credit to a borrower who may otherwise have difficulty obtaining a loan with favorable terms. SBA loans tend to be borrower friendly, flexible to equity and collateral requirements, have longer terms and no balloons or covenants. For example, a conventional loan may have a 10-year amortization with a balloon in 3-5 years, while an SBA loan will have an amortization and term of 10 years. The SBA acts like an insurance company, allowing the bank to extend its conventional credit reach, and this is a benefit to all SBA borrowers.

5 C’s of Credit Analysis

What You Need to Know About Practice Financing

Whether you are seeking to refinance existing debt, acquire a veterinary practice, finance a succession, expand or remodel, a bank or lending institution will be interested in both your business and personal financials. To determine the risk associated with making a loan, a lender will perform a credit analysis.

Credit analysis by a lender is determined by the “5Cs”: credit, character, capacity, collateral, and condition.

• Credit: As history is the best predictor of the future, a lender will examine the personal credit of all borrowers and guarantors. Good personal credit is a must. Any problems must be thoroughly explained.

• Character: Lenders need to know the borrower and guarantors are honest and have integrity. Additionally, the lender needs to be confident the applicant has the background, education, experience, and industry knowledge to successfully run the business.

• Capacity (cash flow): The business should have sufficient cash flow to support its business expenses and debts comfortably while providing the principals salaries that will support personal expenses and debts.

• Collateral: A lender will consider the value of the business’ assets and the personal assets of the guarantors securing the loan as a secondary source of repayment if the loan cannot be repaid. Collateral is an important consideration for a conventional loan, but not as imperative with an SBA loan.

• Condition: The lender will need to understand the condition of the business, the industry, and the economy. Are current conditions likely to change, deteriorate, or improve?


The five components that make up a credit analysis help the lender understand the owner and the business and determine credit worthiness. By knowing each of the “5 Cs,” you will have a better understanding of what is needed and how to prepare for the loan application process.

Determining Your Debt Service Coverage Ratio

Determining Your Debt Service Coverage Ratio

The business’s cash flow is an indicator of the financial strength of the business.  A bank or lender will look at the cash flow of the business to help determine the borrower’s ability to repay a loan. Debt service coverage ratio (DSCR) is the cash available to service debt.

To calculate DSCR, you will take your annual net income and add back any non-cash expenses such as depreciation and amortization.  You will also add-back any interest expense – as the interest is a function of your financing activities.  This is called EBIDA (Earnings before Interest, Depreciation and Amortization).

Then divide your EBIDA by the total annual debt service for the proposed loan (the total annual principle and interest payments).  A DSCR of 1.50 indicates there is 50% more income than is required to repay all debt, or $1.50 available to pay each $1.00 of debt.  However, a DSCR of 0.90 would indicate there are only 90 cents available to pay each $1.00 of debt.

Also, calculate a DSCR that includes your officer draw (EBIDA / Debt Service + Officer Draw) to ensure there are ample funds to pay yourself.

Once you know the strength of your cash flow, you can determine what steps you need to take to improve it.

Top 5 Things to Consider in Self-Storage Construction

Investing in constructing Self-storage facilities is an important decision with many considerations. Historically, there were zoning restrictions that prohibited growth in certain prime locations. With changing regulations and unprecedented growth in the industry causing at or near 100% capacity for many facilities, some owners are choosing construction for continued growth. Here are five things to consider when planning a construction project for your facility.

  1. Site Selection. Find the right location with the proper market. Consider sourcing multiple options to ensure suitable selection and opportunity. Also study visibility; can people see the business and know that is a viable option? Is it easy to access from the main roads? Is it close to a densely populated area?
  2. Feasibility study. Understanding your potential market and cash flow opportunity is key in a construction project. Here you are trying to verify that the selected location is correct and also determine the amount of storage and product mix. What are the market’s current rental and occupancy rates? Take a look at other facilities in the area and research their policies and products. Using an independent third party that is emotionally unattached to the project is recommended.
  3. Financing. The changing economy offers new opportunities in Self-Storage financing. Banks, like Live Oak, are able to offer financing for construction. Lenders will be looking for items such as a description of spending/use of proceeds, Current profit/loss statement and balance sheet dated within 90 days, as well as the past three years’ business tax returns, if the business is already in operation.
  4. Construction Team. Determine the team for your construction project. This includes a contractor, site planning engineer, building supplier, architect and project manager (likely you). Build a team of people you trust to bring your project to completion. If possible use a team that knows the self-storage industry.
  5. Management. The expectations of a Self-Storage manager are high. Acting as a facility manager, marketer and customer service manager are lofty goals for anyone. Decide if you will be an owner operator or if you will hire a third party management company. Each of these options have benefits and considering them fully will ensure your business runs smoothly.

Practice Financing: Long-Term Financing

What You Need to Know About Practice Financing

The veterinary community is an evolving yet thriving industry with many opportunities as well as some challenges. Among the challenges practice owners often face is financing. Bankers want to lend money to good businesses; veterinary practices are good businesses.

Practice owners seeking to fund a specific project, such as a business or real estate acquisition, expansion, remodeling, or large equipment purchase should utilize long-term financing or a term loan. Financing a project over the proper term is important. A project should be accretive, or create additional value to the business, while providing sufficient cash flow to service the debt incurred and an additional return to the owner.

Short-term financing, such as lines of credit, should be reserved to shore up working capital and pay expenses during irregular cash flow cycles.

Seek loans with longer loan terms and no balloons. Balloon is a term used to describe when a loan does not fully amortize over its term. This means a large single payment is required at the end of the term to repay the remaining principle balance of the loan.

For example, for a loan with a 10-year amortization and a five-year term, the loan will balloon in five years, requiring the remaining five years of principle to be repaid at the end of the term or refinanced. A loan with a balloon leaves the borrower to risk higher interest rates when the term ends. Furthermore, the borrower will have to repeat the loan process to refinance the remaining loan amount. A loan without a balloon have an amortization and term of the same length.

What is Cash Flow?

Many factors will affect the strength and success of your funeral home, including the financial decisions you make for your business. As a business owner, you want to look for ways to improve the business financially. Are there ways to cut expenses? In what ways can you better serve your customers while also improve profits? If you’ve asked these questions, then you may have been looking to improve your cash flow. In this series, we will explain what cash flow is, why it is important, and how to analyze it easily; then we will review ways you can improve your funeral home’s cash flow.

What is Cash Flow?

In its simplest definition, cash flow is the difference between revenues (or sales) and expenses that a business incurs in any given period. If there is more cash coming in from revenues than going out from expenses, the cash flow is positive. Conversely, if expenses are higher than revenues, the cash flow is negative.

Net Income and Cash Flow are often thought of as the same. However, net income often includes ‘non-cash’ expenses such as depreciation and amortization. To calculate your net cash flow, you should take the net income per your profit & loss statement, and add back any depreciation and amortization.

Terry Campbell to Lead Live Oak Bank’s Self-Storage Lending Division

Live Oak Bank is pleased to announce Terry Campbell as leader of its new division offering financing to the Self-Storage industry. Terry joins the Bank with over 20 years experience in the industry. He is the former VP of Sales and Marketing and EVP of Operations for a leading Self-Storage building manufacturer.

Live Oak assembled a team of lenders and industry experts to address the need for financing to the Self- Storage industry in all fifty states. The Bank offers financing for new construction, real estate purchases, expansion of existing facilities, refinancing of current debt, and renovation.

The Self-Storage industry has faced certain limitations with existing financing including five and ten year balloons and conservative guidelines in their approach to credit. Live Oak plans to fill a financing gap for those established in the industry that have strong cash flow, but lack appropriate collateral to secure loans with conventional lenders.

“Self-Storage has been one of the fastest growing segments of the commercial real estate industry for almost 40 years,” said Kay Anderson, General Manager of Emerging Markets at Live Oak Bank. “With Terry leading the charge we will focus on strategic partnerships and educating the industry on our lending programs to achieve success in this market,” she stated.

“I’m thrilled to join the team at Live Oak, a Bank that truly understands the need for financing in this space,” said Terry Campbell, Domain Expert of the Self-Storage Division at Live Oak Bank. “Over the last 20 years, I’ve seen the growing need for a nationwide lending product for owners and operators in the industry. Live Oak’s loan structure, cash flow credit orientation, speed and service differentiate us from other lenders in the space, and position us to meet that demand.”

The Live Oak team has extensive lending experience and industry knowledge, enabling them to structure loans designed to meet the unique opportunities facing the Self-Storage industry. Live Oak is designated as a preferred lender by the Small Business Administration (SBA). This designation allows the bank to make loan decisions at a more efficient and faster pace, leading to quicker access to the necessary funding. Like all of their industry commitments, Live Oak Bank is invested in becoming a leader in financing this space.

Read more at Inside Self-Storage