Sales Make it Happen
"App. Only" is for "Girlie Men" *
by Christopher "Kit" Menkin
The trend in equipment leasing the last five years has been "application only," with companies such as Balboa Capital and Main Street National Bank today advertising they go up to $250,000 with this procedure. Machine Tool Finance states on their web site they go up to $350,000 "application only." Even a hold out major funder has gone along with this trend: Bank of the West Leasing for over a year, perhaps longer, considers "application only," but at a different "buy rate" than with "financial statements;" yes, higher rate, of course.)
The thrust in sales since the founding of Direct Capital and Preferred Capital has been approval by mail with "credit cards" or by fax in certain states, followed by telemarketing. The computer scoring by Dun & Bradstreet, Faire Issac and PayNet presents "pre-approvals." The callers read from a script, even make 200 calls or more a day, telling the "prospect" they have been approved for $75,000 or $100,000.
Many of these companies were started by salesmen of small lessors or brokers, who knew telemarketing, but not sales. They also did $1.00 out leases and no lease account. They were "sales." They has a computer strategy, bought lists, find industries, have "credit consultants" who create industry lists to call. Their basic sales training is "make those telephone calls."
Today with the wireless communication and abilities, there is very little "eyeball to eyeball" selling in the small ticket soon to be middle-market leasing, according to Jeff Taylor's latest book, "The Future of Equipment Leasing."
This also has created a divide between "A" and "B" credits, leaving "C" and "D" to the old timers, who can read a financial statement and know how to sell a deal by the merits they have discovered.
They have become "customer service representatives," more a fisherman in the process, throwing out the hook, catching the fish, but another decides if they want to keep it or not.
This trend is also happening in the banking and other financial services where the individual attracts the customer and another department evaluates and actually processes what the "customer service representative" has caught.
It's an old question; where does one go to learn the equipment leasing business? There are few, if any, formal courses of study at universities, and the so called schools are really teaching people to become lease brokers, not salesmen. Others are pure tax, which are the million dollar deals of sale/leasebacks in Europe and the United States.
And think about it, company salesmen don't go to the leasing association conferences. It is the broker and smaller lessor who go there to meet funders and learn their business, not the company telemarketers or even professional sales personnel. The associations make available a lot of information at the conferences, and the National Association of Equipment Leasing Brokers (NAELB) has even started a weekly telephone conference "Meet the Funder" and "Distance Learning Session," with the first one On Being a Broker." The second module, also by Gerry Egan, is out now titled, "Vendor Value." (I was privileged to see a preview copy, which is only available to NAELB members. It is top material; a classic.)
So where do they learn about understanding tough credits and how to sell them? In the old days, they were bankers or finance officers who were taught to make lending decisions based on trade references, financial statements, collateral, and the type of industry; their financial-credit experience. They entered the leasing business and many made a ton of money.
Dun & Bradstreet has an excellent financial statement course, and there are many junior and regular colleges where you can take courses at night. Fitch has a group, too, as does the Alta Group. Steve Chriest also has developed an internet module on line.