Personal Guarantees & Loan Covenants: How to Not Get Burned, Ep #17
Release Date: 05/01/2025
The Cost of Quality — Why Getting It Right Is the Fastest Way to Get Paid, Ep #39
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Quality is often treated like a cost center in manufacturing. Something we have to do to satisfy customers, auditors, or certifications. But in my experience, quality is much more than that. It’s one of the biggest drivers of cash flow, reputation, and long-term profitability in a shop. In this episode of Buy the Numbers, I sat down with Mehul from Ground Control to talk through the real, often hidden, cost of quality. Our conversation starts with a simple but critical idea: parts don’t get paid for unless the paperwork is right. You can machine a perfect part, ship it on time, and...
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Owning the Problem: Why Accountability, Communication, and Culture Drive Throughput, Ep #38
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One of the patterns I keep seeing in manufacturing has nothing to do with machines, software, or technology. It shows up in how teams respond when something goes wrong. In this episode of Buy the Numbers, I sat down again with Josh McKain from Throughput Mastery to talk about the habits that actually drive throughput, especially accountability, communication, and culture. Josh has now hosted more than a dozen live conversations with manufacturing owners and leaders, and what stood out to me is how often completely different topics circle back to the same root issue. Whether the discussion...
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How a Fourth-Generation Manufacturer Measures Success, Ep #37
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What changes when you’re not building a business to sell, but building one to hand down? That’s the question that kept coming up for me in this conversation. In this episode of Buy the Numbers, I sat down with Jack Watson of HFW Industries, a fourth-generation manufacturer whose family has been operating the same business for nearly 80 years. Jack’s story starts with his great-grandfather in 1947, fresh out of World War II, taking a bet on an emerging technology that would eventually become the foundation of HFW’s identity. What struck me wasn’t just the history, but how that...
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The Inventory Blind Spot: How LIFO Can Unlock Massive Tax Savings, Ep #36
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Inventory is one of the most overlooked levers in manufacturing finance, yet it is often the single largest asset sitting on a company’s balance sheet. In this bonus episode of Buy the Numbers, Mike Payne is joined by inventory accounting experts Erica Parra and Cindy Houser from CLA to unpack why inventory accounting methods deserve far more attention than they typically receive. Most manufacturers default to FIFO or weighted average simply because that is how their ERP is set up. But in periods of inflation, tariffs, and volatile raw material pricing, that default choice can quietly...
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Innovation at the Speed of Trust: Why Real Progress Happens When People Connect, Ep #35
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Innovation in manufacturing is often framed as a technology problem. Better machines, faster software, smarter automation. But in this episode of Buy the Numbers, the conversation takes a different turn, one that looks past tools and toward the human systems that actually make innovation stick. Mike Payne is joined once again by Al Whatmough, CEO of Toolpath, for a wide-ranging discussion on why innovation truly happens at the speed of communication and why trust, relationships, and shared experiences matter more than ever in an AI-driven world. From AI-powered productivity to the limitations...
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QDISC Explained: A 5-KPI System for Smarter, More Profitable Manufacturing, Ep #34
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KPIs can feel like a buzzword—every manufacturer knows they should be tracking them, but few feel confident about where to start or what actually matters. In this episode of Buy the Numbers, Mike Payne sits down once again with Jon Hughes of CLA to unpack the real purpose of KPIs, why they’re so misunderstood, and how data-driven decision-making can completely change the way a shop performs. Mike and Jon dive into the QDISC framework—Quality, Delivery, Inventory, Safety, and Cost—and explore how these five buckets give manufacturers a clear, stable foundation for...
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Cash Flow Power Moves: Pricing, Terms & Tools That Protect Your Business, Ep #33
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In this special crossover episode of Buy the Numbers, Mike Payne joins Josh McCain on The Throughput Show for a fully interactive, live conversation about one of the most misunderstood and mission-critical topics in manufacturing: cash flow. Unlike traditional episodes, this one unfolds in real time with audience questions, open dialogue, and the kind of raw, honest examples operators rarely get to hear outside of private masterminds. Josh kicks off the episode with his hallmark energy and levity—complete with an unexpected “musical” intro for guests Mike, Jon Hughes,...
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The Section 179 Trap: Why Tax Breaks Shouldn’t Drive Your Equipment Purchases, Ep #32
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When Section 179 and bonus depreciation come back into play, it’s easy to get swept up in the excitement of “saving on taxes.” Every year around this time, I start hearing from shop owners who are ready to buy a new machine before the end of Q4—sometimes for the right reasons, but often for the wrong ones. Don’t get me wrong, I love a good deduction as much as anyone. But if you wouldn’t buy that equipment without the tax break, you probably shouldn’t buy it because of it. In this episode of Buy the Numbers, I sit down with my good friend Ty Willis from Verdant...
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How Foreign Trade Zones Can Unlock Millions in Working Capital, Ep #31
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When tariffs, trade policy, and cash flow collide, manufacturers are forced to think creatively—or risk being crushed by uncertainty. That’s exactly where Mary Buchzeiger, CEO of Lucerne International and Lucerne Global Solutions, found herself. With skyrocketing tariffs on imported automotive components, Mary realized the solution wasn’t to absorb the hit—it was to rewrite the playbook altogether. In this episode of Buy the Numbers, we dig into how Mary leveraged a little-known financial and logistical strategy: the Foreign Trade Zone (FTZ). By turning Lucerne’s Michigan...
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Building a KPI Culture That Drives Real Improvement on the Shop Floor, Ep #30
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In this episode of Buy the Numbers, host Mike Payne sits down with continuous improvement coach and Lean Six Sigma Master Black Belt Brian Karp to dig into the metrics that matter most for manufacturing leaders. Together, they explore how data can be used not just to measure performance, but to transform culture, drive engagement, and spark meaningful improvement across every department. For more than a decade, Brian has helped manufacturers simplify their approach to measurement—turning overwhelming spreadsheets and endless KPIs into tools that actually guide better decisions....
info_outlineMost of us would never machine a part without checking the tolerances first — so why do so many shop owners sign off on financing agreements without understanding the performance “tolerances” our banks are quietly measuring us against?
In this episode of Buy the Numbers, commercial banker Danny O’Keefe returns to break down two terms that sound like dry legal jargon but carry real operational consequences: loan covenants and personal guarantees. If your shop relies on bank financing to grow, these aren't just details — they’re the guardrails shaping what we can do, and what could get us in trouble.
Loan covenants aren’t just something we sign and forget. They’re the metrics banks use to judge whether our business is still a safe bet. From debt service coverage to balance sheet leverage and owner distributions, these numbers can quietly restrict how we grow, how we pay ourselves, and how much flexibility we have in tough times. If we’re not checking them ourselves when we close the books, we could be tripping violations without even knowing — and that’s a problem our lender won’t ignore.
Then there’s the personal guarantee — something a lot of us sign with a shrug, not realizing what it really means. We dig into how it works, when it’s enforced, and why it's not usually about losing your house — it’s about staying accountable and engaged if the business hits rough waters. With real-world examples, Danny explains how guarantees play out in practice, how banks try to resolve issues, and why going dark is the worst move you can make.
The biggest surprise for many: almost everything about your loan is negotiable — including the covenants and guarantees. But only if you understand your balance sheet, your bank’s priorities, and how to advocate for yourself. Whether you’re taking out your first note or renegotiating a renewal, this episode gives you the tools to treat your financing like a partnership, not a one-and-done transaction.
By the end, you’ll walk away with a clearer view of your bank relationship — not just as a source of capital, but as a strategic tool. One that, when managed well, can protect you and your shop… and when ignored, can quietly start to chip away at your freedom to operate.
You will want to hear this episode if you are interested in...
- (0:00) What personal guarantees really mean—and why banks don’t want your keys
- (0:29) Achieve on-time delivery with ProShop ERP
- (1:58) Guest reintroduction: Danny’s background in commercial lending for shops
- (4:48) Defining the "big scary words": Loan covenants and personal guarantees
- (8:12) How banks evaluate owner distributions and when limits apply
- (9:50) Balance sheet leverage: Why your assets vs. liabilities matter
- (12:53) UCC filings: What they are and why they get overlooked
- (14:37) Proactive vs. reactive reporting: How to stay on your bank’s good side
- (23:44) Types of personal guarantees and what really triggers enforcement
- (26:46) Learn how to grow your top and bottom-line with CLA
- (30:24) What happens in worst-case scenarios—and how communication can save you
- (34:14) How outside consultants and investors can step in when banks get nervous
- (40:57) What a strong balance sheet might mean for guarantees
- (46:43) Negotiating your covenants: Why the whole loan is a conversation
- (52:54) The most important things to pay attention to at closing
- (56:35) Why you need to listen to the MakingSparks podcast
Resources & People Mentioned
- Achieve on-time delivery with ProShop ERP
- Banking Secrets for Manufacturers: How to Secure the Cash You Need, Ep #12
Connect with Dan O’Keefe
- Busey Bank
- Connect on LinkedIn
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Audio Production and Show Notes by - PODCAST FAST TRACK