Challenge Meets Opportunity

Sales is traditionally the engine which drives the business. Generating volume and building assets garners a lot of attention in any organization. In these unprecedented times, you are offered the opportunity to examine your sales strategy and the results produced by that strategy. Are you capturing the types of business you target? Are you developing relationships which establish foundations for dependable repeat business or being transactional only? Examining the results of executing your strategy helps you to redirect capital where it can offer you the results you desire.

Today’s environment has most companies focused on dealing with challenges their company will face in this pandemic crisis, and rightfully so. Customer needs and requests with regard to equipment movement, equipment usage, invoices, Insurance, UCC’s etc. provide insight into how you can raise your customer service levels in the future; thus, positioning yourself to capture more of their business or garner better pricing.

Over the last 40 plus years the Equipment Leasing and Finance Industry has faced numerous challenges to their futures. In the 70’s, FASB 13 was introduced causing temporary disruption and confusion. In the 80’s, interest rates hovered around 20% creating funding challenges to an industry built on fixed rate products. In the 90’s, the Internet bubble burst witnessing market value of companies in that sector to plummet causing Lessors to take a deep breadth on all the capital invested in this sector.

In the Financial Crisis of 2007-2009, Lessors witnessed the perfect storm of plummeting Corporate aircraft values and defaulting Real Estate entities, major users of Corporate Jets. Now we are facing the coronavirus (COVID-19), which is creating havoc with our manufacturing, transportation, energy and supply chain industries.

Portfolio quality and its ability to withstand downturns is always a priority. The various characteristics of your book such as concentrations whether geographical or industry need to be examined. How does your portfolio breakdown with regard to customer size and their customer concentrations? Challenging times offer insight into how your customers handle obstacles. Knowing your clients and their business plans is important to the performance of your portfolio. Take this time to examine these facets.

In every one of these situations the opportunity to make something positive occurs. Each discipline such as Customer Needs, Sales, Portfolio Quality and Equipment Manage presents an opportunity. Challenge meets opportunity. All the information you gather by helping your customer work through their challenges is your foundation for a better future relationship!

Equipment management is a key building block of all equipment finance companies. The equipment you finance affects all aspects of your business. Collateral value is implicit in your risk profile. Residual values affect your pricing, yields and profitability which supports your competitive position. Customer support teams are responsible for insuring property tax, sale tax, UCC’s, invoicing and insurance which are affected by equipment types and usage. Clearly knowing the types of equipment you want and build on this strategy will serve you well. It is times like these when reflection is beneficial.