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Welcome to Money, the show devoted to supporting our brother and sister veterans. I'm Patrick Murphy and I'm Dan Cairns. Fiscal discipline and access to capital is critical to succeed personally and professionally. When only 21% of Americans have only $2000 in their savings, you gotta lean on your friends and family to pay unexpected bills or emergencies. Did you know that according to the Federal Reserve, borrowing from your friends and family is over $200 billion a year.Today we sit down with a fintech founder, Navy veteran, and co-founder and CEO of Zeru who revolutionized automated lending to friends and families with digital promissory notes. Please welcome the Warrior Money, Dennis Cal. Dennis, thanks for joiningus,

brother. Thank you, Patrick. Thank you, Dan. Super excited to be here with my fellow service members. Yeah,

and listen, we have all our bases because we have Army and Navy, so we'regood to go.

I love it. I won't hold that against you.We're here.

And, and listen, I know you're coming in from Dallas, Texas, so, you know, welcome. Uh, we always start with bottom line out front. So bottom line out front, uh, you heard me mention friends and family, $200 billion a year industry, critically important. Um, and it's really, you know, the biggest, you know, bank in the world when you look at it. But you started as an enlisted navy man to become a fintech CEO and founder. How did that happen?

Mostly by God's grace, but you know, really it's a very crooked path. Uh, started my career in the Navy, as you guys alluded to, uh, but really, uh, grew up in low income public housing in Monroe, Louisiana. Uh, we didn't have any banks or credit unions in my neighborhood, butUh, we had several liquor stores and pawn shops that would cash your check for 30% of whatever your check was. So even at a very young age, I knew that was bad math, right? And you kind of fast forward, uh, when I joined the Navy as a systems engineer, uh, setting up ship to shore, ship to ship communications, working with routers, transmitters, receivers, couplers, all the stuff you guys like to talk about at parties. Uh, and had a top secret clearance for several years, butUh, you know, it was one of those situations where when I walked outside the naval base after boot camp, very much a similar scene from the neighborhood that I grew up in. A lot of predatory lenders, uh, buy here, pay here car lots, rent to own furniture stores, payday lenders.And it just hit me in that moment that all these predatory lenders are targeting every demographic that I've been a part of, which is minority, low income, and military veterans. And so for me, in spite of my humble beginnings, it really planted the seed that if and when I had the time, resources, and access to capital to chip away at this issue, so that people that either come from these underserved communities like the one I come from.Uh, that many of us come from, uh, or maybe they have a life event. Maybe you know, you're a high income earner, but you get laid off or you have a medical emergency. You don't have to turn to a predatory lender and pay a 400% interest rate. And so that's really kind of what drove me from humble beginnings to the military.To ultimately starting. Yeah,

and that's, I think that's why Dan and I were so excited to have you on because, you know, you told us how, you know, obviously your grandfather was in the army, America's varsity team, your dad, you know, two tours in the Navy in Vietnam, but you, the first and thes OK and then, but you, the first time you were on an airplane was when you went to basic training, first time. So that story and I kind of feel.You know, all three of us kind of like with a blue collar background, that chip on your shoulder, and then also trying to help people on the outside don't realize, listen, that the millions of folks who are in active service right now or the 18 million American veterans, they understand in the military, if you don't pay your loans off, you can get a court martialed to get UCMJ. There is, it's you actually have to pay your bills by the law or or you could arguably get court martialed.Is that been some of a motivating force when you talk about virtue and that friends and family, not just the access to to do it, but then that digital promissory note that is the backing behind in that paymentplan.

I think so. um.You look at the stress that you called out, Patrick, that comes with not just being a service member, but the fact that you have to stay current on your bills and it's not just a ding on your credit score uh in the civilian world, but if your company commander or you know your superiors get.the letter from your creditors, it becomes a real issue for your service, right? You get court martial and everything else. That same level of stress is kind of what I grew up with in Monroe, Louisiana, where I'd be in the middle of watching TV and the lights would go off because the bill wasn't paid. And as a seven year old, eight year old, you know, that's a very stressful situation. So the stress is sort of transferred itself, you know, for all intents and purposes.Uh, and so what we try to solve for its virtue is look for ways and opportunity to mitigate that stress for people, to meet people where the pain point is, uh, so that they can get that hand up versus a handout when they need to pay those essential bills.

Yeah, we talk a lot on the show about finding purpose and transitioning purposes, right? And so let's talk about the end of your resume, not kind of where you are now. You're on the board of several nonprofits, you're on the board of several businesses, and you founded a business.Uh, can you talk a little bit about what you're currently doing and what that what that all looks like?

Sure, absolutely. So I sit on a couple of different boards. Uh, the YMCA Foundation board is one, the Goodwill Dallas, uh, board, uh, as well. Um, I'm on the Dallas Regional Chamber Board in Dallas, which does a lot for the city of Dallas, um, on the American National Bank of Texas board of directors as well. So a few, uh, nonprofits and for-profit companies, butUh, very much a long ways, you know, from where I started in Monroe, Louisiana. Uh, Dan, to be honest with you, and I'm very humbled by this, but I always try to look for ways and opportunities when I'm in the room to make sure that I'm being a voice for the people who are not in the room, right? And uh, so before I join any board or organization, I always try to look for ways to say, OK, how can I be helpful? Because it's not just about me being on the board and taking up a seat.That's not my uh idea at all. In fact, I've turned down more positions that I didn't feel like I could add value to, right? But where I see opportunities to add value and where I think the organization is being very intentional about the problems that they're solving, those are organizations that I want to be part of and I want to figure out how.We can amplify that. So

to get where you are, to be able to have that impact, you had to have started somewhere in the transition outside of the Navy. When you were in the Navy, can you talk about how you transitioned? Like how did you actually transition from the Navy to go into school, to having the ability to have that start of their path from post-service time?

Yeah, I think umI didn't have I didn't have a road map, right? I didn't have a blueprint or anything like that, but I knew I wanted to just do my 4 years in the Navy and get out because I figured if I did 8, I would just end up doing 20. And nothing wrong with that. I have a lot of fellow Navy buddies who did the same thing. But for me, I started applying at a bunch of different colleges about a year before I got out and was hoping to get some sort of scholarship andEnded up getting a computer science scholarship and ultimately uh getting my MBA in finance as well. SMU in Dallas. And so for me it was just a lot of work just to really try to figure out what things would work and, uh, but it started with education too, right? Because it's one thing to have the military experience, which gave me a lot of discipline, uh, a lot of focus that I didn't have before, um.And then once I got the education, uh, that just sort of opened my mind to all the opportunities and possibilities that were out there. And I started trying to use my God-given talents and skills to figure out how I can be helpful, right? And so it was a lot of God's grace, I think, you know that helped put me in these situations so that.You know I can get the education that I needed to get the careers that I wanted to have and then ultimately try to figure out ways to reach back and be helpful and mentor other folks as well.

You mentionedscholarship for computer science. Did you also use GI Bill or any of the any of the government sponsored.

Yeah, we use the GI Bill because college is expensive.Uh, it's not getting any cheaper. I mean, you look at the numbers, uh, today, uh, think about 4 million Americans are at risk of being in default on their student loans. They just started again. Yeah. And so the mandatory payments are going to kick back up, I believe May 5th or 6th. Uh, so I'm sure there's a lot of stress going on in this country right now, just on that one data point.Uh, alone. So, uh, but yeah, the GI Bill was super helpful. Um, the military experience just was helpful. It just helped me grow up, to be honest with you. Um.And I'm, and I'm, and I'm honored to have been able to serve in the navy.

AndI think the great thing is about in the military we're always taught about ser, you know, you solve problems, you solve pain points, right? So the pain point of, hey, listen, only 25% of Americans have $2000 in the bank account, right? So when emergency does happen, when I can't make the electric bill or whatever.75% of Americans don't have it, so they go to friends and family, and they go to and walk us through how that how search you helps, you know, how that works in the front end where you could actually lend the money, but also how the promissory note and the payment plan is there because you could always bemo someone, right? But then when you need that money back, I do it with the homeless veteran. I'm looking to do that deserts you to, to maybe do it with him because, you know, I lend him money. I'm, you know I'm trying to get him the right way and not just give it.Uh, for free.

Yeah, I, I think that's that's just it. I think you know you can always sell, Venmo or PayPal someone money and hope and pray you get that money back. But with with Zeru, there is a digital promissory note. We keep a digital paper trail of how much is owed, how much has been paid. If I'm borrowing money on Zeru, I am required to link my bank account and my debit card to my Zeru profile, and I'm agreeing based.The terms that I'm setting with my friend or family member, and these are zero interest rate loans that Zeru's going to draft my account each month until my friend or family members fully repay. Now that right there by itself is already vastly different than what you can get with your standard peer to peer payment apps. Um, but at our core, what we do is, uh, we work with national, local and regional billers.Uh, and so if you have a borrower who's trying to get from one bill to the next or one paycheck to the next, but doesn't want to pay a 400% interest rate to a payday lender, and then you have a family member or friend that's willing to provide that financial lifeline but doesn't want to be taken advantage of, uh, wants to have some more transparency into where the money is actually going, how the money is actually being used.And then third, but not least, you have that biller that's looking to capture at-risk payments while creating a better customer experience because the last thing billers want to do is disconnect your service or ding your credit score. So er you is really the nexus that sits in between all of these relationships to solve for this problem in a very real time meaningful way.

Yeah, well, listen, that's awesome. We're gonna take a quick break. We'll come right back with Dennis Cowell.Welcome back to Warri Money. We're here with Dennis C. Dennis, uh, I got these stats. I thought they were pretty, pretty interesting because we talked before the break about, you know, peer to peer, friends and family, you know, lending money, but we also do it, uh, business to customers, right? So,Um, last year, Goldman Sachs found that 77% of small businesses are concerned about access to capital. OnDeck said 70% of small businesses were less than 4 months had less than 4 months of operating costs. So you know how important that is, uh, and that basically, you know, majority, um, have to tap in to the personal funds, you know, when they're running a small business, which the majority of companies in America are small businesses. How does ZRU help small businesses help their customers?

Yeah, we realized just the same thing, uh, that you just called out, Patrick, that a lot of companies, especially our small, medium sized businesses are struggling to even stay alive, to even stay in business, and a lot of that has to do with their ability or inability to collect on the money that's owed to them, right? So.About a year or so ago, we started getting outreach. People started reaching out from different small companies saying, hey, can we leverage search you to collect on some of the money that we're owed, you know, whether it be from people or from other companies.And uh at first we didn't do anything with it and about 10-12 companies later we decided we'd start a beta program which we're in the middle of that now that gives companies the same opportunities that we give consumers who want to lend money and have a better chance of getting that money back. Uh, we're basically allowing those companies to sort of set payment terms with companies and consumers that owe them money, uh, versus writing.Those funds off, uh, and it essentially allows them to allow those vendors and or customers to pay over time, but at least they get to capture that as revenue versus writing it off. And that's a meaningful thing for companies that are just looking to stay alive because most businesses go out of business because they simply can't collect on the money that's owed to them or you can't get the you can't get adequate business to support your business, right? But I think once you figure outHow to solve the problem of staying in business, you've really figured out how to grow your business.

So there'sa there's a kind of funny adage that you're the best way to make a lot of revenue is start by a little bit of revenue. That's right. And if you make a little bit of revenue, then you can figure out how to make a lot of revenue. But there's always inflection points like the 0 to 1 million, 3 to $5 million and above that, like you've got to learn how to kind of manage manage your.Money through that scaling process. Absolutely. Yeah, so there's, um, I was fascinated by the stat. I didn't realize that this was true, but there's 5.6 million about unbanked Americans currently in America. That's it's hard to imagine that there's 5.6 million people that are either putting money into, um, I don't know, laundry basket or a refrigerator. How do you, how do you view that? Because it's it's almost so primitive to us like on this show thinking about like.At Yahoo Finance, this is great, but there's still people that don't have bank accounts.5.6 million

of

them.

Yeah. I mean, a lot of them use Virtue as well, and we talked to a lot of them andWe asked them that same question. Why, why are you not, you know, why do you not have a bank or use a bank? And a lot of them, it's because of the relationship they've always had, their family has had with banks or institutions. There's a lack of trust there that they don't have, uh, and then, but a large percentage of them.Uh, tell us that look, I don't make enough money to have a bank account. By the time I get my paycheck, it's gone. So what would be the point in me even having a bank account? And that's something I don't think that gets talked about enough, right? So, uh, and they're paying their bills through different services, whether it's going into one of these pay direct services through a Walmart or something like that.Uh, so we actually hear different things when we're actually talking to people and uh in terms of the reasons why.

I'm, I, I got to ask. So before the show we were talking about like customer experience and talking to people and how sometimes it's not a great experience. I'd love to know how you actually talk to people that don't have banks. Like how do you get to them? How do they get to you? What does that conversation look like? How are you engaging with them?In a real way where they're even telling you that they don't trust banks.

Yeah. Soagain, our whole mission is to drive financial equity and inclusion one relationship at a time, and we do that by simplifying loans between friends and family. So close to 1 year, 2 years ago, a lot of unbanked underbanked people reached out and said, Hey, I want to borrow money. I want to pay it back, but I don't have a bank account. That's what and we have this whole model.where we what that we call partnership with purpose. So OK, we're not going to force you to get a bank account. Maybe we can put you in a position where you can get the money you need to pay the bills you need now and then graduate you into, you know, traditional bank accounts and credit products that work for you. But let's meet you where you are today. That's what drove our partnership with MoneyGram, right? So we partnered with MoneyGram so that people that are unbanked can borrow money on.you receive those funds via cash, go to the closest agent, and also repay that money via cash as well. In the process of them doing this, you know, we're learning a lot more about them. We start to offer up different alternatives. Yeah,

the reality is there's their lack of trust in government and institutions. That's right. So being a navy man and coming from the most well respected profession, you're telling folks, hey, this is as simple as this. You just have to tie into it.Got it. Yeah, and especially when you look at the rise of crypto and everything else, people do want to be, especially the younger generation, they want to be unbanked. That's right.

It's alsofascinating because you're capitalizing entire communities. You know it's not just like the person that's that doesn't have the bank. It's the fact that they can't go into the corner store and buy whatever they need to go buy, or they can't go to the laundromat and like so you're capitalizing the ecosystem around where you're talkingabout.

Yeah, yeah. And that's that's that meeting people where the pain point is and um.And, and we don't try to enforce our way of doing things. We just try to figure out what partnerships make sense to drive more

impact. Yeah. Well, listen, I know we're going to we, we're Q&A in a second here, but the fact that like Ernst and Young said you're the entrepreneur of the Year in the Southwest, the fact that you're in the Texas Business Hall of Fame.The fact that you're still on these for-profit nonprofit boards and that you're here with us today is pretty awesome. And I hope you were listening and there's a, there's a light at the end of the tunnel and a way forward would search you but let's go to Q and A. I hope so.

My my first question is, what's some money that you know now that you wish you knew when you were younger?

Man, money advice, uh, invest early and often, um.I think some people that grow up in the neighborhoods I grew up in, they have a perception that if you invest, you can lose your money. So there's a there's a huge perception in low income communities that the stock market is a lot like Vegas. It's rigged. So I might as well go to Vegas, right? Uh, and it's rigged, right? And so I think you know having someSort of financial literacy education early on would have been super helpful for me to just even put a few dollars away into, you know, S&P or some safe place and just watch that grow, I think would have been advice that I would that my older self would give to my younger self. And and and and by the way, there's noSuch thing as not having enough money to invest.

Sowhat's the biggest financial mistake that people make on their on their journeys?

The biggest financial mistake I would say people make is probably not saving money, um, not paying themselves first, and my mom taught me this, right? Uh, always pay yourself first, um, and make sure that your lifestyle doesn't exceed, you know, what you need to do to take care of yourAnd so I've always made it a practice not to live beyond my means. I'm just obsessed with that. So because I always like to have money in my pocket and know that I'm tucking money away somewhere. So I think not doing that or being intentional about that is a mistake.

And I think you've got kids. Yeah. So as you're on your journey now, what are you hoping to expose to them now that you didn't have exposure to when you were akid?

Uh, entrepreneurship. I think that's my big thing for them. I want them to have an owner's mindset. Um, nothing against corporate America and you know they'll grow up and they'll have internships and they'll work for people and do everything else. But what I really want them to do is have a sense of ownership and you know, not be afraid to take risks, um.And be OK with, you know, failing. But you know one of the things I try to really, really, really teach them is that if you can find a way to not let your failures discourage you, you will always find a way to be successful. So I'm really trying to make sure they get that point and then with that, whatever they do, they're going to be wildly successful.

That's awesome.If you're afraid you're going to get hurt, you're going to gethurt.

That's right. That's right. I mean, if I'm playing football and I'm afraid to get hit.I will never get on the field, but the reality is I'm going to get hit, right? So I try to make sure that that that we instill that uh that value system in them that to know that it's, it's OK to make mistakes.

Yeah. Listen, Dennis C, thank you so much, Navy veer, co-founder.CEO, thanks for joining us. We appreciate you.

Thank you so much.

Thanks, that's our show. So listen, subscribe and review on Apple Podcast, Spotify, or wherever else you get your podcast or find us at Yahoo Finance. I'm Patrick Murphy

and I'm Dan Coons. We'll see you again next week.

This was not intended to be financial advice and should not be used as a substitute for professional financial services.