Sales Make it Happen
by Bob Teichman, CLP
Equipment leasing isn't the oldest profession in the world, but it comes close. There is evidence that agricultural leases were written over 4,000 years ago. Leases are no longer written on clay tablets, but types of assets leased then are leased today. We still lease agricultural equipment, we still lease land, we still lease cattle.
But leasing as we know it only really dates from the mid-twentieth century. Then a lessor could be a generalist, serving to its customers whatever kind of equipment they wanted using a limited palette of leases. Credit decisions were either heavily oriented towards collateral, or required intensive due diligence. Industry specialists were mainly affiliated with manufacturers.
Today the equipment leasing world is far more complex. Small ticket, medium ticket, large ticket, application-only, full disclosure, domestic, cross-border; the variations alone could and do fill entire volumes.
So how does a small practitioner decide where to spend his or her valuable selling time? Unlike large lessors, who cover all markets through specialized units, the small lessor or broker must establish limits and make careful choices.
Many successful lessors choose to specialize by industry. They learn all they can about their chosen industry, write articles for their industry's newsletters, join their industry's associations and exhibit at their industry's trade shows. They become part of the industry, are well-known to vendors and manufacturers, and, as a result, are the first lessors to come to mind when the subject of financing comes up.
Often, lessors work with industries with which they worked before they entered the leasing business. But how does a lessor with no equipment background choose an industry? The process may start with a preferred vendor, or with an acquaintance, or with a personal interest in a process or device. It doesn't matter if the starting point is small so long as the lessor maintains direction and a continued interest in the industry.
As with all industries, the equipment leasing business has peaks and valleys; we are still recovering from the most recent downturn. What happens to the lessor if his or her preferred industry goes into a decline? When the economy turned bad a few years ago I received a call from a lessor who specialized in an industry which few lenders wanted to fund. He believed he was at a dead end, since he didn't know any other business but that of his specialty. I suggested that he help his vendors obtain financing for their own needs and that he expand his vendor relationships by asking his industry vendors to refer companies who supplied equipment to them. This strategy worked.
Specializing in an industry doesn't mean turning away entirely from related opportunities. But it does require focus and dedication, and can pay long term dividends, both personal and economic.
Bob Teichman, CLP
Teichman Financial Training
"Education & training for equipment leasing and financing personnel"