Knowing Your Channel – Part 3 Vendor Leasing Companies
Within equipment finance, lenders/lessors use various channels to generate business.
Continuing our series on the different channels, this edition of Talent+ will focus on companies that service the vendor (sellers of equipment) channel as their sole or main avenue of generating business. We will provide our opinion on the equipment finance go to market strategy of these companies and the type of skill sets that are required for sales roles in this channel.
We have summarized three different approaches commonly found within the vendor oriented companies:
1. Formal Programs
In this scenario, the finance company tends to target larger original equipment manufacturers (OEMs) under a formal agreement that normally involves working with the dealer network of that OEM.
These programs can generate a high volume of business and require a substantial investment in resources on the part of the finance company. These resources would include investments in people, technology, and marketing.
Sales skill set required:
Significant experience as a “Hunter” in the large program arena. This person must possess the ability to probe for needs and develop solutions that can differentiate their organization from the competition.
Strong interpersonal/relationship management skills. This person works very closely with larger clients and with various levels in their own company.
Prior success with a long cycle sales process.
Track record of accomplishment.
2. Less Formal or Informal Programs/Relationships
This is when the finance company has relationships with distributors (could also be an OEM) that may or may not have a program agreement. In many cases, the distributor or OEM will have relationships with several finance/leasing companies.
These informal programs could generate small or large amounts of volume depending on the size of the vendor/OEM. The companies that do well in this space tend to win based on a combination of items such as superior technology and a high level of service (quick turnaround and simple documentation).
Sales skill set required:
Decent experience in equipment finance. This includes calling on various types of vendors and OEMs. Experience across various industries/collateral types is a plus.
Solid interpersonal/relationship management skills. This salesperson works with both internal resources and external clients.
New Business Development/Prospecting. This person needs to be able to hunt and constantly develop new sources of business.
3. Other Considerations
Application Only/Deal Sizes – application only (no financial statements) credit approvals have become very prominent over the last several years for smaller transactions. Some finance/leasing companies, however, use application only approvals for transactions up to $500K.
Transaction Sizes – some companies will fund deals below $1,000 while others have a minimum transaction size of $25,000 to $50,000. Some transactions in this space, however, can be in excess of $1 million.
Types of Credits – most finance/leasing companies tend to have a niche in that they fund A/B (better credits) or more challenged C type credits.
I hope you have found this edition of Talent+ to be interesting and informative.