The commercial equipment leasing and finance industry is the process of reacting to the current economic crisis. Strong companies are resetting their priorities, their strategies, their credit policies, and their relationships. Leaders are making difficult decisions and working to stabilize the viability of their companies. Major and necessary changes are taking effect on a weekly, daily, and even hourly basis. These changes will affect every originator, every company, and every transaction. Our industry is preparing for the recovery and originators are on the front line preparing to lead the industry forward. Below are a few comments shared by originators in the last week:
- A call from an existing client (a medical research company) required the originator to move quickly to secure an approval and funding in record time. The originator confidently explained to the client that conditions had significantly changed since his last request and that a lengthy list of items would need to be submitted to the credit department. All of the items were supplied by the client in a matter of hours with literally no push-back by the client. The pricing was aligned with the current risk and accepted by the client immediately. The originator didn't panic. He professionally explained the new process, made no excuses, and moved the transaction forward.
- An existing February approval was pulled by the credit department immediately prior to funding. The economics of the transaction had greatly deteriorated because of the current economic situation. Instead of fighting the decision, or wasting time, a seasoned originator worked with his credit department and the customer to significantly restructure and re-document the transaction. The originator acted professionally and was willing to potentially lose the transaction, rather than compromise the stability of his company.
- A long-term strong client requested several million dollars of working capital to weather the current storm. The finance company typically had not supplied working capital loans - all of its financing was for new equipment acquisitions. However, the credit department, equipment valuation department, and sales department worked together to secure a transaction with unencumbered equipment and 60% LTV to provide the client with capital.
- An origination company lost one of its primary "C/D" funding partners. The owner gathered his sales force and explained how quality is most important in uncertain times - that quality originators seek out quality assets and quality relationships. The company will move forward and focus on its strongest clients and it strongest relationships. The future is based upon quality.
Many years ago, during a previous recession, I remember reading the following statement. I do not remember who said it or which publication printed it; but, I will never forget the statement:
I choose to not participate in the current recession, but rather to be a strong advocate and initial participant in the forthcoming recovery. With every adversity comes opportunity.
This "Sales Tip" is provided by Wheeler Business Consulting.
Comments, questions and suggestions regarding
weekly tips are welcome.