Are Your Financing Partners Really Partners1 Jun, 2006 By: Howard Meltzer imageSource
Are Your Financing Partners Really Partners
from manufacturers, your product financing partners should be your best and most
helpful friends in the business. That’s what they are there for, but are you
really getting everything they have to offer? Let’s do a checklist to see if you
are receiving all that you should be:
Critique Your Financing Partners
● First and foremost, rates are only the leg of the stool, but are yours
● Are they treating your customers like your accounts or theirs?
● At the beginning of a lease are they offering insurance that can be either
accepted or rejected?
● Are they mailing invoices 25 days in advance so your customers can avoid late
● Are they charging a reasonable one time document fee?
● Do you and your customers have a guaranteed fair market buyout?
● If your customers have a $1 buyout option are they charged renewal payments if
they fail to notify the financing company on the decision date?
● Does your financing partner provide ongoing training and support?
● Do they offer unique programs like CPC; Copy Block; Skip Payments; Balloon
Payments; Deferred Payments; Bakers Dozen, etc. that help differentiate you from
● Are you getting quick approvals and funding?
● Are you satisfied with your approval rate?
● What kind of online programs do your partner offer?
Does your financing partner aspire to these values?
● Are they solution driven and rises to the occasion?
● Do they conduct themselves with the utmost integrity?
● Do they treat you and your employees with respect?
● Do they help you create opportunities for growth?
● Do they look at the whole picture?
● Are they tenacious in helping and supporting your efforts?
Let’s face it, most of your equipment sales are financed. Leasing companies are
acutely aware of this and therefore are as competitive in their business as you
are. Like yours, their competition breeds a profit squeeze that has slowly but
surely evolved into their cutting costs and finding very subtle but effective
ways to maintain their profits. The checklist above details some of the ways
they have found to generate below the line profits without raising rates.
Subtle, but effective.
Clear Agreements Make Good Partners
Should you feel that your current financing partners don’t measure up, take
heart; there are very solid financing companies in our industry that you can
work with comfortably. If you decide to check out the market, begin by talking
to other dealers of roughly comparable size or work
with a consultant until you get enough solid references to warrant making a
Once you select financing
partners, be sure to negotiate all terms and conditions up front to protect both
your company and your customers, and then confirm that they are all in the
agreement. The old saying “trust but verify” applies perfectly in this
Go back and look at your program agreements with your financing partner to
ensure that you and your customers are both protected. If not, you will surely
be able to renegotiate.
You may also want to take a look at the T’s & C’s of your manufacturer’s Major
Account Financing agreements to ensure that they are not binding you to
It’s a good idea to select two, or if you are large enough, three financing
partners. Don’t change them often; instead use your leverage to keep them
working on your behalf. After all, you really do want them as supportive and
And finally, remember to “Hope for the Best and Plan for the Worst” to keep the
partnerships on track.