How have we been financing equipment for the past 40 years?
This is such an interesting and rewarding industry to be in and creates a true opportunity for an entrepreneur, even one with absolutely no experience in the equipment leasing business. Being a great salesperson really helps and since I have always sold non-tangible products, working in this industry has been right up my alley.
When I started 40 years ago, I floundered around with little training and no help from any associations. The handful of equipment leasing associations that existed at that time were for banks and lenders, not little brokers like me.
Eventually, I began working for a leasing company to which I once brokered deals. The company was setting up offices around the country and asked me to open one in Albany, NY. This was in the early 80s, just before the prime rate was 16% to 18%, and we offered leases with or without the investment tax credit.
During this time, I learned about the shortcomings and disappointments of having one set of credit guidelines, approved types of equipment and a small credit team making all of the credit decisions. After one and a half years, the company closed all 20 offices and I was back on the street, albeit with a bit more wisdom. I called a broker 150 miles away who had placed an ad in the phonebook and started feeding him all my deals.
I began by calling on a few choice vendors. My first three vendors were a copier vendor, an office equipment vendor and one selling and servicing garbage trucks and containers. I was calling in my own credit applications on the phone to my broker in Long Island, NY, for two years because you usually had to have two years of experience to be approved by lenders. When deals were approved, I generally typed out my own leases and UCC forms and went out to have them signed with a goal of making $50,000 per year.
Becoming a charter member of the National Association of Equipment Leasing Brokers (now the American Association of Commercial Finance Brokers) is a highlight of my years in this industry. Volunteering and helping others as well as learning from many more was all incredibly helpful to my growth and education in the equipment leasing business. After serving on the board of directors for several years and serving a two-year term as president of the NAELB, the equipment leasing business became easier and more fun than it had been. Meeting so many peers and lenders in the business over the years has been the best thing to help me grow.
After my first 24 years as a broker, during which I had as many as 15 employees, I had the good fortune to sell my business to a bank in 2004. Three years later, I realized I was bitten by the equipment financing bug and started all over again.
Over the years, I have learned to listen and sift through what I hear and carefully consider the source. I have come home from many association conferences scratching my head, wondering if I was doing the right thing. I heard many other brokers brag about some new things they were trying or segments of business they were seeking and what lenders they were using. It made me often question if I was still doing things correctly.
In times of self-doubt, the most important thing we must do is stay positive. I can remember how devastating it was in 2008 when we had a big blip in the economy. I was actually telling myself leasing just wasn’t fun anymore. That was a big mistake because I started to believe it was true and took an eight-month hiatus from the industry to try something else. As I faltered in the new endeavor, I realized how challenging it was. Suddenly, I began to remember what a good thing I had in the leasing business. One of my old customers called and wanted me to finance something for them. After quickly completing the request, I made a couple thousand dollars in less time than it took me to prepare for a sales call in the new business into which I was trying to break in.
As we come out of the COVID-19 pandemic slowly and surely, we are all holding our breath and hoping we have been doing the right things for our businesses this entire time. We must be confident in the way we conduct business and with whom we are doing it. We must stay true to our lenders and to our customers as well. They will believe in us if we believe in them. We must go back to the things we did in the past that worked and in industries that are still robust and alive. Many businesses closed their doors in 2020, but not everyone shut down in the past year. Let’s remember that and hit it hard for the next seven months and make 2021 the comeback year of our careers.
Gerry Oestreich is owner of ABC Leasing & Financing. He enjoys being able to quickly and competitively provide businesses and professionals with the capital they need to acquire the technology, equipment and vehicles they need to move their businesses and professions forward.
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One Reply to “Tales From an Equipment Leasing Broker”
Love this article… Love Gerry!