Each week, we’ll interview one of our experienced Finance Officers for a brief question and answer session about something interesting from the week, along with tips and tricks to make your finance process easier, and their unique perspective on the industries and customers we work with.
This week, we caught up with Travis Van Houten in our Portland office who talks a little bit about his first ever Hawaii deal, and unique circumstances that are inherent to a deal outside of the continental United States.
Q: Hey Travis, I know you had said that you had somebody from a couple weeks ago that you thought would be a good fit for a Q&A? What about this deal made you reach out according to how it fit in to some of the other deals we’ve been looking at?
A: This guy had a pretty solid credit application, however, he was Hawaii-based. Looking at the best place he would qualify, we came to the conclusion that one of our funding sources would be the best fit. I got him approved with no obstacles on that front, however some of the other obstacles in the case were one, obviously him being in Hawaii, two, the equipment was here in Oregon, three, the equipment was under lien with US Bank, and four, It was a private party sale.
Q: Woah, quite the list!
A: Yeah… five as well, he wanted to include the shipping in the financing. Let’s see if there is six… yeah, six was that we could not pay the shipping company directly because of just how they account for it on their end. So, I think those were probably the six main obstacles there in putting this deal together.
Q: So, how did you get things going with obstacles like that?
A: To start out, you know, we got with the private party seller, and they informed me that they were selling this for $32,000, where they still owed six-two or seven thousand, so we had to pay US Bank, and US Bank being a big institutional bank, you know, their process can be a little bit slow. We had paid them, and then they took 10 business days (exactly on the mark from what they told us) when our funding source received the title down in Colorado. So once that was done, we were able to pay the sellers, the private party, the rest of the money, because we wouldn’t release the funds to them until we had the title in hand, obviously signed off, and the lien removed. So obviously, private party sellers being private party sellers, they want their money as fast as they can, so that was a little frustrating on their end, which I totally get that. But, we got that taken care of.
Q: What came next?
A: Then, it was time for the buyer. He had a brother out here to pick up the truck to bring it up to Seattle and get it out on the barge, which, you know, took about another 7 to 10 business days to get it delivered to Hawaii, and then the truck sat in Maui for a few other days because of some weather, or something like that. So then he finally got the truck, took possession of that, paid the shipping company, and then we reimbursed him, finally, to essentially fund the entire deal – that took about a whole quarter. It was really dragged out, but I think we were really able to add value to the customer. You know, we were able to get him approved, get everything paid for, actually get it shipped out to him while he was there in Hawaii. I just think all of that together, it was just a really solid added value to the customer. It may have taken 3 months to complete, but you know, sometimes things like that are out of our control? The buyer was a really nice guy, really patient.
Q: So, with having the deal out of Hawaii, were there any restrictions because of the location?
A: A couple of our funding sources don’t really do deals that aren’t in the continental United States, but luckily, we had one of our sources whose manager spends a lot of time out there, so they made a couple exceptions, and we were able to get this one done in the end. This was my one and only Hawaii deal!
Q: Would you do one out there again?
A: Umm… Absolutely! Just have to send it back to the same funding source.
Q: And maybe make sure you have three months to spare?
A: Well, maybe we’ll make sure the equipment is actually on the island haha. Just kidding. This was a very specialized truck, so it was definitely part of the circumstances. Could have been worse – the equipment could have been on the east coast!
Q: That’s what I was going to say!
A: But at the end of the day, we were able to get three different parties paid – the shipping company, the private party, and the bank to release the lien, and we even got the equipment shipped out to Hawaii. Overall, I think we added a lot of value to the customer on this one, and got everything finished up in a good way.
Next week we will check in with another one of our finance officers. Stay up to date and learn more from our valuable resources at www.AmericanEFS.com/The-Bottom-Line
