Monitor’s Top Private Independents, upsized to a group of 30 this year, grew by 35.6% in 2021, the highest percentage of year-over-year growth recorded in the history of the ranking. While expanding the field is part of the reason for such an impressive mark, this year’s Top Private Independents still bounced back from 2020’s sluggish pace of growth, as the group originated $10,185.3 million in 2021 new business volume, a gain of $2,671.3 million from the previous year. Only five independents reported volume decreases, leading to a combined decline of $113.7 million, while the remaining 25 companies achieved a collective annual increase of $2,785 million.
Collectively, the top five private independents reported $4,302.1 million in 2021 new business volume, representing 42.2% of the Top 30 group total. Additionally, the top five companies provided $985.9 million (36.9%) of the whole group’s collective gain.
The Rankings — Top Five
Stonebriar Commercial Finance retained the No. 1 position in the ranking with $1,509.6 million in 2021 new business volume, a $76.5 million (5.3%) year-over-year increase, with 82% originated via its direct channel and 18% coming from indirect sources. The entirety of Stonebriar’s 2021 volume was attributed to large-ticket equipment.
GreatAmerica Financial Services easily maintained its No. 2 ranking with $1,031.6 million in new business volume, up $79.3 million (8.3%) from $952.3 million in 2020. GreatAmerica originated more than 99% of its total volume from its vendor channel, while 0.5% came from portfolio purchases. Almost half (47.8%) of GreatAmerica’s volume came from small-ticket transactions, while micro-ticket (34.3%) and medium-ticket (17.9%) transactions made up the rest.
After sitting out last year, Amur Equipment Finance made a strong return to the Top 30 listing, finishing at No. 3 with $648.8 million in new business volume in 2021, a 110.5% increase from 2020.
On the back of 138.4% year-over-year growth in 2021, Onset Financial broke into the top five, landing at No. 4 with $563.7 million in 2021 new business volume. Onset built its impressive road to the top five, primarily in the direct channel and on a foundation of large-ticket transactions, with $476.3 million (84.4%) of its deals falling into this category. The company added $86.2 million (15.3%) in medium-ticket deals and $1.2 million (0.2%) in small-ticket deals to round out its production for the year.
After jumping into the top five last year, Trans Lease held onto a spot, although it slipped slightly from No. 3 to No. 5. Trans Lease reported $548.4 million in new business volume in 2021, which, despite leading to a fall in the rankings, was actually a 42% increase from its volume in 2020. Trans Lease compiled $289.5 million (52.8%) of its volume total from the medium-ticket space and $256.7 million (46.8%) from the small-ticket side, with a dash of micro-ticket activity ($2.2 million or 0.4%) making up the remainder. The company’s origination strategy focused on the vendor (54%) and direct (30%) channels, with a portfolio purchase accounting for 16.5% of its total volume.
With Onset breaking into the top five and Amur returning (it was No. 4 in 2020), two companies had to leave. First National Capital and Kingsbridge Holdings had the misfortune of being the odd ones out, with First National finishing sixth with $461.7 million in new business volume, a 24.7% increase from 2020, while Kingsbridge took a 9.4% hit, recording $289.5 million in new business volume to fall to No. 15.
Top Percentage Gainers
Auxilior Capital Partners, a relatively new player in the equipment finance space, turned heads with a 482.1% increase in new business volume in 2021, climbing to the No. 13 spot in the Top 30 ranking in its first year of eligibility. Two other new entrants in the ranking made the cut thanks to impressive gains in 2021, with Accord Financial vaulting to No. 23 with a 160.4% year-over-year increase in new business volume, while Financial Partners Group leapfrogged more than half the list to land at No. 9 with 151.7% year-over-year growth.
Other big-time gainers included Onset (138.4% growth), 36th Street Capital (116.1%) and Amur (110.5%). Onset and Amur’s strong performances got them into the top five, while 36th Street Capital inched up to No. 21 from No. 24.
Amur wasn’t on last year’s list, but it was a staple in years before, so there were technically six new entrants on this year’s Top 30 ranking. Financial Partners Group made the biggest splash, racing its way to No. 9 with $370 million in 2021 new business volume. Encina Equipment Finance came in at No. 12 with $350.7 million in new business volume, while Auxilior Capital Partners was just a spot behind with $305 million.
Further down the list, MMP Capital made its way to No. 19 with $203.2 million in new business volume, Accord Financial got to No. 23 with $135.4 million and Great Altantic Finance made the final cut at No. 30 with $62.9 million.
Although the COVID-19 pandemic remained a top concern for several companies, the most cited worries by this year’s Top Private Independents were margin compression, the economy and capital spending in 2021.
“There have been strong pockets and strong windows of time, but the economy, supply chain issues and swings in the COVID landscape have created a choppier than desired environment for business origination,” a survey respondent said.
“Availability of capital has resulted in continued significant downward pressure on prospective returns,” another respondent said.
Competition and hiring were other primary concerns, while some companies identified factors like supply chain disruptions, regulatory constraints and availability of equipment as stressors for their businesses.
“Prevailing uncertainty was a key challenge during 2021,” a survey respondent said. “The continued spread of the COVID-19 pandemic combined with the resulting supply chain disruption impacted planning and forecasting and caused us to pause some growth initiatives.”
Speaking directly to concerns around staffing, one survey respondent said, “Our biggest challenge was finding, hiring, training and managing credit, docs and funders. We were not able to find and hire local experienced operations, so it forced us to hire very qualified and experience[d] remote operations people.”
Focus in 2022
Improving internal operations and the customer experience will be a focus in 2022 for many of this year’s Top Private Independents.
“Overall operational efficiency has been, and will remain, a focus for our company,” a survey respondent said.
To win new business and smooth out workflows, several companies expect to upgrade their technology suite to ensure they are on the cutting edge in terms of performance, specifically through automation.
“Continued ‘futurizing’ of business process and technology,” a survey respondent said when asked about their top focus for 2022. “Clearly the future state requires a more automated internal and external experience for team members and for customers.”
Although adopting new technology will be important, this year’s Top Private Independents are also focusing on adding talent, something that has become a challenge in the current environment.
“[We have] tremendous objectives to continue to grow our business and expand our talented team of professionals,” a respondent said. “We have found difficulties with doing this based on the labor shortages in the marketplace.”
This year’s Top Private Independents may have serious concerns to deal with, but they remain optimistic about their prospects for 2022. Calculated on an average weighted basis, the group expects to grow collective new business volume this year by 20.51% compared with 2021, with no company forecasting a decrease. Although an increase of 20.51% would fall short of the increase the group achieved in 2021, it would still mark a return toward normalcy compared with 2020, when the Top Private Independents managed 9.1% growth in the face of the COVID-19 pandemic’s initial onslaught.
The COVID-19 pandemic may not be over, but this year’s Top Private Independents bounced back in a big way in 2021, achieving an impressive and record-setting 35.6% increase in new business volume as a group, although, in fairness, some of that is due to the expansion of the list to 30 companies.
There was a nearly even split between direct new business volume and vendor-based new business volume, with the latter coming in at $4,313.2 million, up from $2,442.6 million in 2020, while direct volume came in at $4,311.7 million, up from $2,804.6 million in 2020. Meanwhile, portfolio purchase-based volume experienced a major increase in 2021, rising from $29.1 million in 2020 to $154.9 million in 2021. However, the gain came at the expense, to some degree, of volume through indirect and parent channels, with indirect originations down from $1,400.7 million to $1,073.7 million and originations from parent companies down to $168 million from $206.6 million.
In terms of employee productivity, the Top Private Independents reported an average of $4.55 million per employee, up from $3.29 million last year.
After the challenges of 2020, 2021 provided a bit more clarity for the Top Private Independents, leading to a record-setting year. However, as they traverse 2022, the 30 companies on this year’s list will have to navigate ongoing and emerging challenges to succeed like they did in 2021.
Monitor’s staff is grateful to the companies that participate in our annual survey and make this report possible. •
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