Knowing Your Channel to Generate Business — Part 2 Direct Independents
Within equipment finance, lenders/lessors use various channels to generate business.
Shifting from last month’s focus on the direct bank channel, this edition of Talent+ will focus on independent finance/leasing companies and provide opinions from Molloy Associates recruiters on the equipment finance go-to-market strategy and skillsets required for sales roles in this channel.
We have summarized two approaches commonly found within the direct independent finance/leasing channel:
1. Originate to Sell
In this scenario, the finance company targets capital intensive companies to finance their capital expenditures. In many cases, the sale is made virtually with limited in-person contact. The companies that employ this strategy tend to have a call center/back room with individuals working the phones. This option tends to be less expensive than having feet on the street.
Originate to sell companies make their money by selling off the loans or the debt streams (tax leases) while retaining the residual. In addition, these companies tend to work with companies up and down the credit spectrum as they are able to find funding sources for strong, average and tough credits. Most have strong technology platforms that allow them to service the leases/loans and retain the client relationship.
Sales skill set required:
Some experience in equipment finance. The candidate should have a background with a strong emphasis on cold calling skills and the ability to work in an environment with accountability for calls and proposals.
Strong interpersonal/relationship management skills. These are the requirements for working with many internal resources and external clients.
Ability to learn. This salesperson should have the ability to learn and present various product structures to clients.
2. Originate to Hold
Finance companies that take this approach target mid-size to larger companies. They tend to focus/call on companies that are non-investment grade. In some cases, these companies are looking for prospects that have had an adverse event take place and have the need for funding.
Their transactions tend to be business that banks will not fund. These companies tend to have a multi-pronged go-to-market approach where they call directly on companies, are active in the capital markets as a buyer/participant in transactions and also try to develop relationships with referral sources such as lawyers, accountants and investment bankers who may have a line of sight to the types of transactions the companies would like to fund.
Sales skill set required:
Significant experience in equipment finance. This would include working with mid-size and larger clients, a demonstrated ability to structure/tailor transactions to meet the needs of the client, and a solid credit background to understand complex credits.
Solid interpersonal/relationship management skills. This person works with both internal resources and external clients.
New Business Development/Prospecting. This candidate needs to be able to hunt and be nimble enough to work several avenues (direct, referral sources) to achieve their volume goals.
We hope you have found this edition of Talent+ to be interesting and informative. We plan to cover additional channels in future editions of Talent+.