Fidelity Bank Celebrates 50 Years and Counting

Fidelity Bank first opened its doors to customers in Edina, Minn. on October 8, 1970. The bank was originally chartered in September 1970 as Southwest Fidelity State Bank of Edina and affiliated with Fidelity Bank and Trust in northeast Minneapolis. Fifty years later, it is one of the few remaining locally owned and operated community banks. 

Initially, the bank focused on consumer services and real estate lending. However, in 1978, under the leadership of then-president Jim Morton, the bank’s focus shifted to commercial banking – a move that proved pivotal to Fidelity Bank’s long-lasting success. 

Today, Fidelity Bank serves primarily small to mid-size businesses and offers a full spectrum of business banking services, including commercial lending, mortgage warehouse funding, equipment financing, equipment leasing, cash management, and factoring services. 

Throughout its history, the bank has gone through two ownership changes. In 1986, local businessman Robert Reznick purchased the bank and renamed it Fidelity Bank. Then, in 2005, a long-term investment by a group of related trusts purchased the bank. Through each transition, Fidelity Bank successfully maintained the same high level of client service, strong financial results, and continuity of leadership. 

In 2008, Jim Morton retired as CEO and became chairman of the board (retired from the board in December 2014) while Charles Mueller took the reins as president and CEO. 

Making Relationships Matter

Mueller started with the bank in 1983, working his way through the leadership ranks before being appointed president/CEO in 2008. Throughout his career, he has made a significant impact on the culture and success of the bank by valuing the contributions of his employees and understanding the importance of developing relationships with clients.

Under his leadership, the bank earned a reputation for its commitment to relationship banking. At Fidelity Bank, the bankers take time to really get to know each client and anticipate their financial needs, becoming not just a valuable resource but a trusted partner leveraging long-standing relationships in the local business community. Clients have come to appreciate this personal approach as well as the bank’s flat organizational structure, which empowers the bankers to make decisions quickly and eliminates unnecessary red tape. 

Finding Their Niche

With more than 30 years of industry experience, Fidelity Bank is one of only a small number of community banks to specialize in mortgage warehouse funding. During the downturn in 2008-2009, many warehouse lenders exited the warehouse business, leaving a large demand and few providers. 

Charles understood the market need and led an initiative to double down on the bank’s expertise in warehouse funding by upgrading all documentation and expanding to other markets, primarily in the midwestern states. 

In 2014, Fidelity Bank purchased a warehouse operation in Houston that served a smaller mortgage banking market. Based on these strategic expansion initiatives, the warehouse division of the bank continues to thrive and funds $4 billion to $6 billion in mortgage loans per year,  originated across the country, for mortgage banking clients with headquarters in 11 states. 

Expanding Capabilities

In 2018, as part of the bank’s strategic plan to grow and diversify in ways that differ from other community banks, Todd Williams led the acquisition of a well-established factoring operation, TCI Business Capital. By essentially providing an advance on accounts receivable assets, factoring enables a business to receive a quick influx of cash when they need it most. Invoice factoring services provide clients with consistent cash flow to meet payroll, manage expenses and grow. 

It’s attention to strategic development and diversification opportunities that has led Fidelity Bank to remain relevant in various asset classes through the course of market changes (economic and banking industry changes) as they celebrate their 50th year in business and look ahead to the next 50+ years. 

Rising to the Challenge

Like most businesses, when the COVID-19 crisis hit earlier this year, Fidelity Bank had to react quickly, not only to meet the financial needs of their clients, but to ensure the health and safety of its employees. In a matter of days the bank pivoted from everyone working onsite to social-distancing scenarios with a few employees staffing the bank while the rest of the team transitioned to working from home, something the bank had never experienced before.

Meanwhile, as small businesses across the country scrambled to apply for the federal government’s initial $349 billion Paycheck Protection Program (PPP), many found themselves stuck in a frustrating state of limbo. Despite having long-standing relationships with large, national banks, business owners weren’t even being given the opportunity to apply for a loan. 

Unable to gain access to much-needed emergency capital through larger financial institutions, many small businesses in Minnesota turned to independent banks for help. Fidelity Bank was uniquely positioned to adapt quickly and execute the program. The bank’s small, but nimble team had the expertise and dedication to pull together and respond to the need.  

From the time the first phase of program became available on April 3 to when funding ran out on April 17, Fidelity Bank had approximately 20 people working 12-14 hour days to service the program. Between Friday and Sunday, the first weekend the program was available, Fidelity Bank authorized 144 loans, 100 of which were done on Sunday alone. Over the course of the program, the bank authorized more than 400 PPP loans, funding $131 million for small businesses.  

What’s Next? 

In recent years, as part of its strategic plan, the bank has been making changes to its leadership structure. This includes expanding the senior management team with an eye toward future growth.   

On July 15, Todd Williams was elected president of Fidelity Bank. Williams has been with the bank for more than 30 years, most recently as executive vice president, and is responsible for guiding much of the bank’s strategic growth in recent years. 

In keeping with the bank’s commitment to continuity of leadership, CEO and outgoing president, Charles Mueller, will shift his focus to work on more targeted strategic projects while continuing to support Williams in his new role.

Most importantly, as it celebrates the first 50 years, Fidelity Bank team is grateful for the relationships that have made their success possible and look forward to continuing to support the needs of the business community in the Twin Cities for the next 50 years and beyond.

Todd Williams Elected President of Fidelity Bank

EDINA, MINN. (August 17, 2020) – Fidelity Bank ( recently announced the election of Todd Williams as president of the bank.

On July 15, Fidelity Bank’s board of directors voted unanimously to promote Todd Williams to president, effective immediately. Williams succeeds outgoing president Charles Mueller, who will continue in the role of chief executive officer for the foreseeable future.

Williams has been with Fidelity Bank for more than 30 years, starting his career as a credit analyst and later moving to commercial lending. In 2002, he was promoted to the head of commercial lending. He was appointed executive vice president in 2017, at which point he took on more of the strategic leadership of the bank.

“I’m very proud of the progress we’ve made toward our goals of diversification and growing the bank. We’ve made some key hires in the last couple of years, which allowed me to focus more broadly on guiding our strategic plan,” said Williams. “I feel very fortunate to work with such great people and look forward to our continued success as we take Fidelity Bank into the next 50 years.”

In his new role as president, Williams will manage the day-to-day strategic leadership of the bank with a continued focus on the type of service and strong financial results Fidelity Bank clients have come to expect. 

The move comes as Fidelity Bank prepares to celebrate its 50th anniversary this fall and is part of the bank’s long-term strategy to drive continued growth into the next 50 years.

Throughout its 50 year history, Fidelity Bank has maintained a legacy of serving the business community in the Twin Cities through client service, strong financial results, and continuity of leadership. As the bank transitions to this new phase of leadership, CEO and outgoing president, Charles Mueller, will shift his focus to work on more targeted strategic projects while continuing to support Williams in his new role. “Fidelity Bank is very fortunate to have the best of both worlds with respect to talent and continuity of leadership. Todd and I have worked together for 30 years and he is one of the most capable and dedicated leaders I have known,” said Charles Mueller. “This move is a natural evolution for both Todd and the bank.”

About Fidelity Bank

For nearly 50 years, Fidelity Bank has helped small to medium-sized businesses in the Twin Cities and surrounding region gain access to the best financing terms. Fidelity Bank offers expert business banking solutions, including commercial lending options, warehouse funding, and more to a wide range of industries.

With an ESOP, many winners in sale of a business

Article originally published in the Star Tribune.

For many business owners, a succession plan is about more than creating an exit strategy or profiting from the sale of the company. It’s about preserving a legacy in a way that benefits the company and its employees as well as the business owner(s).

One way to do that is by selling the business to your employees through an employee stock ownership plan, or ESOP. Unlike selling to a competitor or private equity group, establishing an ESOP provides a range of benefits to all involved.

With an ESOP, business owners sell some or all of their shares to a trust that manages the company’s stock. Employees get an ownership stake in the company and a potentially valuable retirement benefit. The sellers receive a fair price for their shares and have the option to remain involved in the business. The business benefits from continuity and stability.

For Mark Gaetz and Jim Burns, former owners of Mulcahy Company, establishing an ESOP was a way to continue to be involved in the operation and growth of their business while rewarding the employees who helped make it a success.

Founded in 1929, Mulcahy Company represents a variety of manufacturers producing products for the heating, cooling, and plumbing industries. Gaetz and Burns purchased the company in 2009, and under their leadership it tripled in size.

“When we hit 60 employees, we had a lot of people wanting a piece of the pie,” said Gaetz, Mulcahy Company CEO. “So you’ve got to concern yourself with how to divide it up every year. Invariably you can’t do it right, there are too many politics involved. So we started going down the ESOP avenue.”

Setting up an ESOP can be complicated. Partnering with the right team of experts makes the process easier and ensures a smooth transition of ownership.

“After meeting with Mulcahy shareholders there were several common themes,” said Joe Skorczewski, director of Chartwell Financial Advisory. “Younger shareholders valued a smooth transition, with continuity in management and the opportunity to work another 15-20 years. Shareholders nearer retirement valued liquidity and limited business disruption. The board sought a tax efficient way to transition ownership to the next generation and set up Mulcahy to perpetuate itself. In this case, all signs pointed to ESOP.”

In order to purchase shares from the sellers for the newly established trust, most ESOPs require some portion of funding through a loan. When financing is involved, working with a lender who understands ESOPs and your business is key to the transition.

Our team collaborated with all of Mulcahy’s advisers to get the deal done as quickly and seamlessly as possible by remaining flexible, giving easy access to decisionmakers, and ensuring the funding was structured for success.

“With remarkably stable financial performance and a wonderful employee focused culture, Mulcahy was well suited to take the next step in its ownership transition journey,” said Skorczewski. “Employee benefits are set to increase, management will be even further motivated to drive shareholder value, and the customers and communities Mulcahy serves ultimately stand to benefit from transitioning ownership broadly to the ESOP.”

For some companies, the journey to becoming an ESOP is not quite as direct. Both timing and company culture play an important role in determining the success of an ESOP.

Some questions to consider before pursuing an ESOP for your business:

  • Does the current business valuation for the sale of the company meet the financial goals of the owner/seller?
  • Is the right management in place order to achieve a smooth transition and ensure company longevity?
  • Will your employees embrace the mind-set of an employee-owner and approach their roles in a way that benefits the company as a whole?

Diversified Plastics spent several years considering options for a succession plan before pursuing an ESOP in earnest. Founded in 1977 by Jim Dow, Diversified Plastics is a full-service plastic injection parts manufacturer providing prototyping, manufacturing, and assembly.

“As not just the owner but the founder of the company, Jim was very concerned about the people that stayed with him, because we had some very long-term employees,” said Roger Vang, Diversified Plastics CFO.

Once the timing was right, things began moving quickly to get the deal done. Their bank initially agreed to finance the transaction based on the outside valuation of the business.

However, not all financial institutions are comfortable handling the financing for ESOP transactions. Despite their increasing popularity, funding ESOPs is still a relatively niche market for lenders due to the complexity of these transactions.

After additional analysis, the bank was no longer willing to give up the personal guarantees that heavily collateralized the seller’s personal assets. So, on the recommendation of their financial adviser, Diversified Plastics turned to Fidelity Bank for financing.

Becoming an ESOP improved cash flow so dramatically that the company has been able to finance a lot of their capital equipment internally. It also proved to be a valuable recruitment tool.

Today, there are nearly 7,000 ESOPs in the United States, with more than 14 million employees participating. On average, ESOPs are 25% more likely to stay in business and employee-owners were four times less likely to be laid off during the recent recession.

With the right financing and structure in place, becoming an ESOP has the ability to improve the financial performance of your company, keep jobs in your community, and help build the overall wealth of your entire workforce.

About the Author

Jeff Campbell Senior Vice President, Commercial BankingJeff Campbell is a senior vice president and commercial lender at Fidelity Bank. Jeff specializes in working with entrepreneurial, closely-held and family-owned businesses, helping to find the right banking solutions that fit their unique needs from working capital to M&A to ESOP transactions. Jeff aims to genuinely build relationships with his clients, watching their businesses evolve over time. He is known for proactively working with clients to address their business challenges and opportunities and being a trusted resource and advisor.

Jeff joined the team as a commercial credit analyst after graduating from Hamline University with a degree in Economics and Business Management in 2001.

Fidelity Bank’s Summer eNewsletter: July 2020

A message from our President and CEO, Charles Mueller

We understand the importance of communication, especially at a time when some traditional communications have moved from in-person to online. I encourage you to stay in close contact with your banker as that person knows your business well and is ready to be your partner through this unprecedented time.

At the center of our company’s purpose is a commitment to help our clients, this is why we have worked hard to keep our operation seamless and have put new systems in place to ensure we are ready to support you and your business. To that end, I am proud to introduce our latest communication method – an eNewsletter. This edition provides several articles and information we hope you find valuable.

Financial Best Practices for Times of Economic Uncertainty

As the initial frenzy of the Paycheck Protection Program (PPP) fades into the background, businesses and bankers alike are looking ahead to what’s next.

As a bank, it’s important for our team to help clients stay on top of the most current guidelines and to provide supporting documentation to ensure everyone is knowledgeable about the spirit of the law.

Businesses need to determine their new break-even point and plan for contingencies based on assumptions. In this article, Jeff Campbell shares several financial best practices to achieve greater insight and control over the financial health of their business.

Read the full article.

Jeff Campbell SVP photo

By Jeff Campbell
Senior Vice President
Fidelity Bank

Connections make the difference – especially now


During this time, when connections have moved from in-person to remote, Fidelity Bank is committed to staying connected with you.

We are here and continually working to support your business banking needs. If you prefer in-person, online, or mobile, you can bank confidently knowing that our experienced bankers are still part of every transaction.

We proudly offer you and your business secure capabilities from deposits to payments to risk mitigation, all at your fingertips. Click here to learn about the available remote banking solutions.

And please know that our team of connectors are available to support your business, especially now. We work to connect with our clients, to connect with our networks, and to connect our clients with our networks.

See remote banking solutions.

Newest senior leadership team members


Late last year, we added two new Senior Vice President roles to the Senior Management Team.

Brian Bueche in credit and Mike Heil in commercial lending. These two started shortly before the COVID-19 pandemic and have been invaluable players supporting the internal team and clients through several related financial changes, including the Payment Protection Program application process.

Brian Bueche brings 28 years of commercial banking experience, including the origination, servicing, and credit administration of commercial banking products. Read more about Brian.

Nearly three decades ago, Mike Heil began his career with Fidelity Bank and rejoined the team in November to bring his experience in commercial banking back to Fidelity Bank. Read more about Mike.

Risk Mitigation service

Argos Risk®

Fidelity Bank’s partner, Argos Risk, offers comprehensive business information and immediate insights to help clients be proactive to risk mitigation by providing monitoring services of your third-party relationships, including important vendors, etc. Fidelity Bank customers are afforded the opportunity to use this service at a discounted rate. Learn more here.

COVID-19 Update

We continue to work to keep our employees and clients safe with adjusted interactions that include auto bank access, in-person appointments, and video conferencing appointments. We want to stay in contact with you, please reach out to your banker directly or contact us at: or call us at (952) 831-6600.

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This publication does not constitute legal, accounting or other professional advice. Although it is intended to be accurate, neither the publisher nor any other party assumes liability for loss or damage due to reliance on this material. Websites not belonging to this organization are provided for information only. No endorsement is implied.
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Financial Best Practices for Times of Economic Uncertainty

As the initial frenzy of the application, documentation and funding phases for the Paycheck Protection Program (PPP) fades into the background, businesses and bankers alike are looking ahead to what’s next.  

For many that means confirming that PPP funds are being used appropriately and as efficiently as possible. As a bank, it’s important for our team to help clients stay on top of the most current guidelines and to provide supporting documentation to ensure everyone is knowledgeable. Our dedicated team is responsible for helping clients apply for loan forgiveness, with the goal of maximum forgiveness in a timely manner. Once this phase is behind us, it will be time to focus on the big picture moving forward.  

While the PPP loans and other SBA funding options have provided a bridge for many small businesses to get through the initial economic impact of the COVID-19 pandemic, there is still a lot of uncertainty. Who knows what it will look like in 90 days? It’s likely to be a tough road and the economy is going to look a lot different.  

Businesses will need to determine their new break-even point and then plan for a variety of contingencies based on certain assumptions. To do so effectively, we are recommending clients implement several financial best practices to achieve greater insight and control over the financial health of their business. 

Cash is King 

In times of economic uncertainty, it is more important than ever to manage your business’s liquidity effectively. Consider if revenue slows, how much cash do you have on hand to get you through? And for how long? Build up cash reserves as best you can. As a business owner, assess if you have additional capital you can inject into the business. This is a time where liquidity is going to be imperative for long-term success.  

Monitor Key Relationships 

Be mindful of how the pandemic is affecting your partners, suppliers and even competitors. Are your vendors having trouble sourcing materials? What are your partners noticing in other parts of your industry? Are your competitors holding steady? Or have they pivoted to serve a different industry with greater demand? There is value in monitoring relationships that are key to your success. 

Now is also the time to watch your credit like a hawk. Are your customers taking longer to pay? Or unable to pay? Be acutely aware of your accounts receivable aging and mindful of the terms you are extending to new and existing customers alike. Are your vendors paying their bills on time? If not, that could signal trouble on the horizon as well.  

According to Lori Frank, President and CEO of Argos Risk, slower payments may indicate your customers are conserving cash, while an increasing number or credit inquiries could be a sign the business is looking for money. 

If you are extending new terms, it’s crucial to develop a system for assessing credit risk. For instance, if you land a new customer, how do you determine if they are a credit risk? You can do a bank reference or request other referrals. But when watching your cash and credit more closely, the more information you have access to the better. 

“Don’t just look at where they are today because that’s a snapshot. Look at the trend for the last six months. Are they trending down? Are they trending up? Or are they flat? Trending is really the number one thing to look at,” said Frank. “It’s also important to look at the health of industry they are associated with as well as recent news.”  

Watch for Opportunities 

Even in uncertain economic times, it’s not all doom and gloom. While some companies may be scaling back or more vulnerable, there are opportunities for growth if the risk is appropriate. Businesses with sound management and good fundamentals may be able to increase market share through acquisition of a company that’s in trouble. 

Now is also good time to take a closer look at your own processes and systems with an eye toward operational excellence. Could automating certain functions or implementing digital solutions provide the bandwidth necessary to focus on new growth areas? Could incorporating lean strategies (i.e. 5S, value stream mapping, mistake proofing, etc.) eliminate waste and reduce costs? Doing so now will likely position your business to withstand longer periods of slow growth and deliver larger returns once revenues bounce back to normal and human capital becomes scarce again.  

Keep Timely and Accurate Financial Information 

Maintaining an accurate set of financials for your business should always be a best practice. But quick access to timely and accurate financial information is even more critical in times of economic doubt. Keeping meticulous books makes it possible to be nimble when addressing capital needs or working with banks. Having a firm handle on your financial situation also makes it possible to be responsive or even get out in front of potential problems when they arise. Your banker and other financial advisors will thank you.  

Create a 13-Week Cash Flow Projection 

Now more than ever, you should be painstakingly tracking your business’s cash flow. Setting up a 13-week rolling cash flow projection, which shows cash in and cash out, which is updated every week is an immensely valuable tool. It can be as rudimentary or as robust as you like. Its purpose is to forecast your liquidity for the next three months, so you have time to get out in front of any issues or opportunities. It also provides more transparency and visibility when working with your lender.  

Utilize Your Trusted Advisors and Peer Groups 

Whether it’s the state of the economy, your business’s financial health, or potential opportunities, now is a great time to work with outside advisors to gain additional insight. This could mean something as simple as a conversation with your banker or could include participating in an industry forum or roundtable.  

Increasingly, many businesses are turning to fractional support for areas such as finance, accounting, human resources and even marketing. In some cases, businesses are finding the outside fractional model makes a lot of sense to provide much needed high-level support while managing costs moving forward.  

Stay Close to Your Banker 

At Fidelity Bank, we’ve always believed in the power of relationship banking. In times of economic uncertainty, having a good relationship with your banker will certainly give you a leg up. Working with a bank that knows you, knows your business, and knows your industry is important. It is more important than ever to have direct access a decision-maker.  

None of us knows how these next few months are going to go. But it seems logical to assume that the economy is going to be tough for a while. Perhaps for some industries more than others. Industries will be tested. Businesses will be tested. Leaders will be tested. We may have some tough conversations and tough decisions ahead of us.  

Together with a strong banker relationship, implementing the best practices outlined above, will put your business in a better position to plan for whatever opportunities or challenges come your way. No matter what, we are all going to need to work together to manage the outcome of this pandemic for a long time to come. If we haven’t had the chance to meet with you yet, I’d like to extend an invitation on behalf of the team here at Fidelity Bank, our team is here to help. 

About the Author

Jeff Campbell Senior Vice President, Commercial BankingJeff Campbell is a senior vice president and commercial lender at Fidelity Bank. Jeff specializes in working with entrepreneurial, closely-held and family-owned businesses, helping to find the right banking solutions that fit their unique needs from working capital to M&A to ESOP transactions. Jeff aims to genuinely build relationships with his clients, watching their businesses evolve over time. He is known for proactively working with clients to address their business challenges and opportunities and being a trusted resource and advisor.

Jeff joined the team as a commercial credit analyst after graduating from Hamline University with a degree in Economics and Business Management in 2001.

A Note to Our Customers About COVID-19

To our valued clients,  

On Wednesday, Minnesota Governor Tim Walz signed Executive Order 20-20 directing Minnesotans to stay at home and limit movement outside of their home beyond essential needs. This order will be in effect March 27th through April 10th.

I want you to know that Fidelity Bank is taking this order seriously and has been taking guidance from the CDC to prepare for such an order. We have transitioned much of our workforce to work remotely, and we have made necessary decisions to reduce in-person meetings and transactions:

  • In-person transactions and meetings will be available by appointment only
  • Auto Bank hours will be adjusted to Monday – Friday from 7:30 a.m. to 4:00 p.m.
  • The night drop is available 24 hours per day

Despite these circumstances, let me reassure you that Fidelity Bank will continue to operate and serve your needs. We encourage you to use our online channels and contact us by phone or email. We will continue to be at your service.  

In addition to these changes, our team has also launched a COVID-19 resource page at to aggregate key business topics and resources in one central location for our clients. 

At the center of our Bank’s purpose is a commitment to help our clients; this is why we will continue to support you and your business throughout this unprecedented time. 

Chuck Mueller
President & CEO
Fidelity Bank

Cybersecurity & Infrastructure Security Agency (CISA) Scam Warning from the Department of Homeland Security

The Cybersecurity and Infrastructure Security Agency (CISA) warns individuals to remain vigilant for scams related to Coronavirus Disease 2019 (COVID-19). 

Fidelity Bank wants to help protect our clients. We are asking clients to exercise caution in handling any communication related to COVID-19. Please be advised that Fidelity Bank will never ask for credentials by phone or email.

The Department of Homeland Security warning that Cyber actors may send emails with malicious attachments or links to fraudulent websites to trick victims into revealing sensitive information or donating to fraudulent charities or causes. 

CISA encourages individuals to remain vigilant and take the following precautions.

If you receive a communication that looks like it is from Fidelity Bank but you want to ensure it’s truly from the bank, we are always here to help. You can contact Fidelity Bank directly to verify the communication. Fidelity Bank customer service can be contacted by email at or phone at (952) 831-6600. Your lender is also available to help. 

These are unprecedented times and Fidelity Bank is here to help. If you have questions about this scam warning or other business-related topics, please reach out to our team for support – we are here to be your business partners.

Customer Notice

To our valued clients,

The Coronavirus is top of mind for so many people, and it is top of mind for us too. Please be assured, the health and safety of our customers and employees is our priority.

Fidelity Bank has always taken great pride in having a clean and well-run bank, and we know this is more important than ever right now. Like many others, we’re taking guidance from the CDC, which recommends regular cleaning as one of the most important preventive measures we can take.  On top of our daily cleaning procedures, we have instituted more rigorous cleaning at individual workspaces, including the front reception desk and teller line. As another cautionary measure, we have temporarily stopped serving coffee and monthly cookies.   

We’re also ensuring our contingency plans are in place in case the virus spreads into our area of Minnesota, to ensure we provide uninterrupted service.  

And of course, we’re committed to taking care of our team. We’re encouraging sick employees to stay home and are asking our teams to only travel if it’s business-critical.

At the center of our company’s purpose is a commitment to help our clients, this is why we’ll be working hard to keep our operation seamless so we can be there to support you and your business.

Chuck Mueller
President & CEO
Fidelity Bank

Strategic Financing: Funding Automation on the Manufacturing Floor

Article originally published in MPMA’s Precision Manufacturing Journal January/February 2020 issue.

Automation is a growing trend in the manufacturing industry with manufacturers turning to it as a method for solving business needs.

Twin City EDM & Manufacturing, a machine shop in Fridley, with customers in the health care industry, recently invested in a robot to do a job that it couldn’t fill because of worker shortages facing the manufacturing industry. “Finding labor was very difficult, so we decided to bring in a robot to do the job,” said Steve Lindell, Vice President at Twin City EDM. “That robot is able to run multiple machines and work through the night.”

Twin City EDM has a few robots doing very labor-intensive work, such as running the wire EDM, and it plans to invest in more. “We’ll add another robot to do our milling work, with the goal of having this robot be flexible and move from job to job,” says Lindell.

Tolerance Masters, a Circle Pines-based contract manufacturer for the aerospace industry, purchases new CNC machines regularly to help meet their customers’ increasingly tight turn-around times.

“We don’t produce a high enough volume that would justify investing in robotics,” said Jim Mackin, CFO and Controller of Tolerance Masters. “Instead, we’ve been buying new CAD and CNC machines every year to address the needs of our customers.”

Mackin says the company purchases rather than leases the equipment because it makes sense economically. There’s also a fairly quick return on the investment – sometimes in as little as 18 months – and the company can get the benefit of the depreciation. What’s more, state-of-the- art equipment can be used for multiple utilities as the business expands.

Whatever the reason, automation can help manufacturing companies increase productivity, efficiencies, and competitiveness. Whether it’s robotics, artificial intelligence (AI), or simply additional machines, automation can equate to big gains for manufacturing companies.

Financing Options

But of course, the big question is how do companies pay for the investment?

The good news is there are options. If a manufacturer wants to simply write a check for the full amount of the new automation equipment, they can. However, most manufacturing companies do not have the capital to spend or do not want to spend it out-of-pocket.

Instead, they look to purchase or lease automation equipment through financing. Manufacturers have several financing options available when looking to invest in a new piece of automation equipment.

  • Current Banking Relationship: This option is typically straightforward and simple since an established relationship exists and the bank is usually familiar with the business and business assets. As a result, there is generally less documentation and work required to determine eligibility as compared with a new bank relationship. While there aren’t many downsides to financing through an existing banking relationship, some businesses choose to use their equipment financing needs as an opportunity to diversify their financing relationships. That is, they maintain the relationship with their bank, but choose to work with a different financial institution to finance new equipment.
  • Bank-owned Leasing Company: These companies are specialized divisions within a bank that are usually able to get financing completed quickly. Most bank-owned leasing companies hold the transaction for their own portfolio. This is an important point when a company finances equipment. Some equipment finance companies will sell the transaction unbeknownst to the customer and suddenly the company is unaware of who owns or finances the assets on the manufacturing floor. This can be problematic as not having a point- of-contact eliminates the company’s ability to know who to contact if they need to renegotiate equipment financing agreement terms or have questions relating to the contract.
  • Vendor Financing: Getting financing from the company that manufactures the equipment or the dealer selling the equipment is a good option for a few reasons. First, a vendor financing program may offer a subsidized interest rate, which could save money over the life of the loan. In addition, they may take a higher residual position on a true lease, providing lower monthly payments over the term of the lease. This can be advantageous if there are no plans to buy the equipment at the end of the lease. It’s always a good idea to ask the vendor if they offer financing and if so, to investigate the terms. Depending on the situation, vendor financing could be a good option.
  • Independent Equipment Financing Company: Another financing option is to use an independent equipment financing company. This may be a viable option for some, as these companies operate independently from banks and may be able to offer financing solution that a bank will not.

“Finding labor was very difficult, so we decided to bring in a robot to do the job. That robot is able to run multiple machines and work through the night.”

Steve Lindell, Vice President, Twin City EDM

Other Considerations

Along with choosing the right financing partner, there are other considerations related to financing new automation or other equipment.

One key consideration is how to structure the financing. Sometimes it can take several months after a new piece of equipment is ordered to get it manufactured to specifications, installed, and producing to its full capacity. In this case, it may be important to consider a step-up payment structure where the initial payments start lower and increase every year thereafter as the equipment operates more efficiently and at capacity.

It also makes sense to consult with a tax expert to determine if the purchaser can fully utilize the depreciation benefit. Depending on the answer, a knowledgeable equipment financing company will help structure the most beneficial financing product, which may or may not be a “True Lease.”


It’s important to work with someone who understands the business, its goals, and the reasons why an investment is being made into equipment. Lenders will need to know if the equipment is needed to help with one customer and the duration of that customer contract. They also will want to know plans for the equipment once the contract ends; will the equipment be sold or used for a variety of applications? This level of business understanding will help a lender offer the best financing solution based on the situation.

What’s more, sometimes automation technology is so new – think 3D printing when it first came onto the scene – that the financing company needs education before being comfortable financing it. While they can do their own research, a company can add value in the education process by providing any research that has already been conducted within the organization.

It is fair to say that automation is here to stay. As manufacturing companies consider new equipment to improve manufacturing processes or to help with labor shortages, there are many financing options. Collaborating with a trusted expert is key to identifying the best financing solution for equipment investments.

About the Author

Mark Paetznick photoMark Paetznick is vice president of equipment finance and leasing at Fidelity Bank. With over 28 years of extensive experience in equipment finance, Mark understands the nuances of credit analysis, structuring transactions and negotiating documents. An out-of-the-box thinker, Mark has a knack for finding solutions that fit his clients’ immediate needs, while also supporting their long-term goals.

Fidelity Bank Adds Michael Heil to its Senior Management Team

EDINA, MINN. (November 25, 2019) – Fidelity Bank (, an independent, privately-owned business bank serving small to medium-sized businesses in the Twin Cities for nearly 50 years, recently named Michael Heil its Senior Vice President of Commercial Lending.

Mike Heil Senior Vice President, Commercial Lending

With more than 28 years of experience in commercial banking, Heil is a forward-thinking strategist who is well suited to lead the bank’s local business lending team into the future. In his new role as senior vice president of commercial lending, he is responsible for supervising and motivating the lending team to grow Fidelity Bank’s commercial portfolio.

Nearly three decades ago, Heil began his banking career with Fidelity Bank as credit analyst and was later promoted to assistant vice president. Most recently, he spent the past 13 years as a senior vice president for a large national bank, where he helped set overall strategic direction and led his sales team to exceed production objectives consistently.

Heil is the second Senior Vice President hired by Fidelity Bank within the past quarter. The first hire was Brian Bueche on September 30, 2019. The two new team members were hired as part of the bank’s strategic plan to be positioned for continued success into the future.

About Fidelity Bank

For nearly 50 years, Fidelity Bank has helped small to medium-sized businesses in the Twin Cities and surrounding region gain access to the best financing terms. Fidelity Bank offers expert business banking solutions, including commercial lending options, warehouse funding, and more to a wide range of industries.