HUNTINGTON BEACH, Calif. — Equipment financiers see diversification in funding sources and products as an opportunity for continued growth amid strained financial conditions.
For lenders reliant on outside funds, diversifying their funding sources across the lending spectrum helps prepare for downturns at any single bank, Quentin Cote, president at Gig Harbor, Wash.-based Orion First, said during a panel discussion at the National Equipment Finance Association’s spring conference.
“This idea of ‘don’t run out of money’ is a big theme,” he said. “Diversity of funding sources, diversity of partners on the funding side, whether you’re selling whole cloud, backline or ultimate net loss agreements,” is crucial, he added, noting “you don’t know who’s going to be there for you in the long term.”
Strong strategic partnerships with borrowers and vendors can help keep business flowing, Cindy Fleck, managing director of independent equipment financier Minnetonka, Minn.-based Channel Partners Capital, said.
“Stay close to your borrowers,” she said. “There’s a ton of repeat business with those good customers — and stay close with your vendors.”
Helping the smaller guy
Small- and medium-sized businesses need a range of products, which opens the door for lenders to alter their financing approach to better capitalize on opportunities, Jason Zeager, president of Hawaii-based Pacific Business Funding, told Equipment Finance News.
“I changed my business model to be able to help with a wider range of products and services,” he said. “So while a lot of purely equipment guys here told me their business is slowing down, I’ve never been busier because I’m offering a different range of products.”
Small- to medium-sized businesses represent a significant opportunity for lenders because these businesses have a variety of needs, Channel Partners’ Fleck said.
“There’s a need for working capital, and Channel launched a choice product that’s a better price working capital product because, again, small- to medium-sized businesses need capital to grow and take advantage of opportunities,” she said.
Registration is now open for Equipment Finance Connect, the nation’s only dealer-centric equipment lending and leasing event, which will take place May 5-7 in Nashville, Tenn. Learn about the event and free dealer registration at EquipmentFinanceConnect.com.
