The commercial equipment leasing and finance industry is active and the first quarter has been strong for most participants. The outlook for 2021 and into 2022 is also positive. Over the past six months I have worked with management teams to establish post-Covid19 strategies. The business environment is changing, and organizations are required to institute internal changes in order to stay in the forefront of the industry. Many of these required changes were present before the pandemic; they are now being expedited to better serve vendors and end-users. The market is demanding efficiencies from the commercial equipment leasing and finance industry and successful participants are providing their stakeholders with more efficiencies, better buying experiences, and more expertise than ever before. Below are just a few examples of how the industry is changing.
Participants in the industry have been using scoring systems to adjudicate credit decision for years. However, progressive companies have supercharged their proprietary systems to measure significantly more data than ever before. Instead of the typical four or five matrices (TIB, FICO, PayNet, bank balances, equipment types), systems are pulling 20, 30, or more data points from public records. The systems are reviewing trends rather than static data. The systems are making better decisions based upon multiple historical data. Additionally, the systems are projecting future viability of potential customers. It is no longer good enough to have a scoring system. Strong companies have, or are in the process of, developing robust proprietary scoring systems which are delivering better decisions in a timely manner.
Management teams are encouraging their younger staff to participate in forward-thinking strategies. The next generation of leaders are contributing to corporate cultures and allowing companies to eliminate outdated processes and policies that no longer promote creativity and innovation. I have seen veterans embrace new ideas brought forth by their younger team members. The old guard is learning from the younger, more technologically advanced, generation and learning what will be expected from the next generation of entrepreneurs.
Sales teams are offering more expertise than in the past. Organizations are providing comprehensive training on all aspects of the leasing and finance process. Top originators are expected to know more about the credit process, the valuation of equipment, and the challenges of portfolio management. Many value-added finance/leasing companies are becoming equipment-centric and have sales professionals who, more than ever before, fully understand the specific equipment that they finance and lease.
Companies are integrating their departments and functionalities. Credit professionals understand the sales process. Sales professionals understand the portfolio management and collections process. Most importantly, data is being freely shared and monitored by all departments to create a more holistic approach to generating and managing equipment assets. Companies are requiring their entire staffs to understand all aspects of the finance/leasing process.
These are truly exciting times to be involved in the commercial equipment leasing and finance industry as we prepare for the coming years of growth and prosperity.
Wheeler Business Consulting works with banks, independents, captives, origination companies, and investors in the equipment leasing and finance arena. We provide training, strategic planning, and acquisition services. Scott Wheeler is available to discuss your long-term strategy, to assist your staff to maximize outcomes, and to better position your organization in the market.