As a company primarily built to be an in-house funding arm, American Leasefund has always depended strongly on American Leasing & Financial sales representatives to continue to grow our portfolio. In our efforts to encourage sustainable growth, however, we’ve been forced to turn to broker business to maintain our rate of expansion. Broker business as a model for growth is not a novel idea. Companies like Financial Pacific and Pawnee Leasing have utilized a pool of well-qualified and reputable brokers to grow their operations for several decades. For us, however, the prospect of relying on broker information has always been something we’ve undergone with a fair amount of cautiousness.
A popular question from our brokers, then, has been with regards to what they can do to increase their odds of approval? Unlike many of our contemporaries, we’re not simply analyzing a matrix score to approve or decline. Rather, we’ve built a niche for our no-nonsense, manually reviewed credit decisions. Knowing that we manual review (and in many cases even interview potential lessees/customers) is, in and of itself a powerful weapon in the application process. After all, this means that we’re very interested in the specifics of the transaction and not just in overarching generalities like credit score, time in business, and bank statements. Explanations are crucial components in our credit officers’ decision-making.
What this translates to is the reality that the average credit officer needs more than just stats to make a decision. We’ve come to rely heavily on the ‘write-up’ or ‘transaction summary’ as a critical tool to answer the outstanding questions and give a sense of humanity to the transaction that statistics simply can’t provide. A write-up, for example, can explain customer credit issues like a recent bankruptcy. It can justify the cost of the new acquisition: is the customer replacing an old piece of equipment, upgrading, or simply adding something new? The key to writing a good transaction summary is to explain any negative facet of a transaction that has a worthwhile explanation. You’d be surprised how many deals get declined that might have been approved with the benefit of a decent explanation from the broker.
Moreover, a write-up can also summarize the terms that a customer is willing to adhere to. If a customer wants a shorter-term on a riskier transaction, for example, that can be a positive selling point. If a customer can swing a larger advance payment or has additional collateral, that can lead to a sensible approval that helps the credit officer feel like they’re in a more secured position.
Our salespeople in-house with American Leasing & Financial are trained to not only prepare a transaction by collecting the minimum submission requirements, but also know to shore up any inconsistencies and prepare a transaction summary for review. Because of the sheer volume of transactions we review on a daily basis, it’s impossible for credit officers to do a broker or salesperson’s job and track down answers to such glaring questions.
From the perspective of a customer, the wisdom is to provide details and explanations to your broker/salesperson. Rather than look at a loan or lease application as an opportunity to provide simply the minimum details that are needed, it makes more sense to go above and beyond and provide more information than what’s required. Working together, a sales representative and customer can put together a package worth approving.