Monitor: Please share with our readers your background. What led you to a career in equipment finance and to your position at Vision Financial Group?
CE: My background is varied from trading tax advantaged securities on Wall Street to closing large leveraged lease and project finance transactions. I was seeking out an opportunity to develop longer term relationships rather than a focus on singular transactions. This led me into vendor finance and assuming leadership roles at GE Capital, Bank of America and TCF.
Vision Financial Group was my ultimate dream with its first rate entrepreneurial spirit and minimal bureaucracy. At VFG, our associates wear many different hats within various functional disciplines. Not doing a lot of hand holding affords me the opportunity to focus on our strategy and allows our individual experts to in effect run their own small businesses. We are committee free and decisions can be made within minutes.
Monitor: After joining the company in 2008, you were recently appointed president and chief operating officer. What did the appointment mean to you professionally and personally?
CE: I am very grateful, as it only came about by being surrounded by high performance teams that were very capable of making their own independent business decisions. We all share a passion for success and know how to celebrate our successes. We have the unique ability to adjust on the fly and very quickly adapt our business model, processes and practices to changing market conditions and customer requirements.
Monitor: Did you have any mentors in the industry that helped you along the way? If so, what do you take from them and put to use in your own work?
CE: Ken Preble, president at Banc of America Leasing, had a penchant for always putting the customer first with a heightened sense of urgency. We measure our ability to respond in minutes and not in hours. Additionally, Fred Summers, the CEO of VFG, has the unique ability to maximize network opportunities by generating referral leads from our internal network of suppliers, banks, vendors and customers. Several of our client relationships were cultivated from trade shows, ELFA events, airplanes, golf courses, dinner functions and local networking events.
Monitor: VFG notes that you led the company to its highest profit and volume year in its history. Can you elaborate on the role you had and how you achieved that goal? What principles will you carry forth from the experience?
CE: We are very focused on addressing specific customer needs rather than staying within a certain boundary such as a specific industry or geography. We are customer centric — we do what we need to do to win the customer. We don’t plug a customer into our business model; rather, we adapt our business model to a specific customer. We will go after it if it makes business sense. We also embrace change and focus on non-traditional industries and equipment types. This expanded market focus has been the catalyst for profitably increasing our sales production from $28 million in 2012 to $63 million in 2014. We do very well at looking beyond what is in front of us — in other words, we have exceeded at identifying opportunities beyond the obvious. In other words, sometimes a small marginally profitable deal can lead into a larger Master Lease Agreement (MLA) opportunity, a new vendor can refer you to more vendors, and a satisfied customer can refer more and so on.
We have three operating principles at VFG that guide all that we do: (1) always do what you say you are going to do, (2) out respond the competition and (3) be competitive — this means earning a fair profit — we do not lead with price; rather, we offer a consultative approach and have unparalleled structuring expertise. We know the way to get to a yes, whereas we have found our competitors prefer more of a defined box solution.
Monitor: What are your expectations as new president and COO this year? Have you developed any foresight into H2/15 and what we can expect from your leadership at VFG?
CE: Our objectives include enhancing our technology platform. We are looking forward to deploying an updated Vendor portal allowing for greater connectivity and automation between VFG and its Vendor partners. We are anticipating a Q1/16 launch. The cornerstone of our five year strategic plan will be an emphasis on profitable growth. Anyone can give away low rates. We have zero desire to be part of the club that grows just for growth’s sake.
Monitor: VFG prides itself on building relationships with its customers. How does that philosophy tie in to your day-to-day approach as president/COO?
CE: I am very hands on and spend a lot of time in front of our customers understanding their needs to ensure Vision has the resources to deliver. We are not a jam and go volume shop — the vast majority of our revenue is from repeat business.
Monitor: Your prior experience includes sales, operations and credit. Do those experiences help relate you to your company? How does your experience lend to your leadership skills?
CE: That experience is helpful, very much so. Working for an independent requires an extensive and intimate knowledge of the functional disciplines. Our sales team is very hands on and all have significant technical expertise. Our underwriting team is excellent at finding reasons to do transactions. Our administrative, documentation and customer service staff rises above and beyond on a regular basis because they excel in a non-cookie cutter environment. We all wear multiple hats and nobody is afraid to get their hands dirty or make mistakes. I strive to help foster an environment where the team isn’t looking over their shoulders. I am surrounded by a very professional group that knows, from top down, we expect hard work and performance. My personal broad experience lends to my leadership skills because it helps me relate to our entire team on a variety of levels and perspectives. We learn from one another, we speak each other’s language and we share a mutual respect throughout the entire organization.
Monitor: Could you please share some information about the leadership team that helps you manage VFG? Can you recall a specific instance where the leadership team helped you through a difficult situation or prevailed in some way?
CE: VFG has a lot of longevity within its management team with Kimberly Smith, the CFO, having started the business with Fred Summers, our founder and CEO, 24 years ago. Lou Brill, our head of risk, has been with us for 20 years. Many of our other associates exceed 10 years of service. Our senior managers have varied backgrounds, having worked for a mix of privately owned/large corporate entities, and all bring varying degrees of expertise to the table. The real key about our company is that the longevity is not just in senior management but at the troop level. We are a sales-driven culture having made a lot of gut feel decisions within our credit and operations teams.
Monitor: What are a few of your short-term and long-term goals for VFG?
CE: We are aggressively looking for ways to grow the long-term shareholder value of VFG in the following ways:
• Expand the growth of our on balance sheet lease portfolio with new committed senior facilities while deploying very conservative leverage.
• Grow our small ticket vendor alliances through a more robust vendor portal that will automate the entire lease origination process all the way through to the back-end reporting process.
• Expand our sales team in VFG’s key local target markets, including Pittsburgh.
• Significantly expand our FMV product offering to maximize our return on capital.
• Exploit new relationships with our veteran-owned small business designation.
Monitor: Can you speak to the size and scope of VFG’s clients? What areas do you serve, both geographically and by industry segment? Are you looking to expand?
CE: We serve the entire spectrum, from start-ups to investment grade Fortune 500 companies. We navigate nationally with an emphasis on local markets where we have a sales presence. We focus on non-traditional and sometimes very sensitive market segments such as alternative energy and selectively target the more traditional industries such as healthcare and C&I. Our orientation to “hit ‘em where they ain’t,” has been instrumental in allowing us to earn a fair and equitable profit. VFG’s business is a mix of about 50% direct and 50% vendor relationships. And yes, we are looking to expand, so long as the growth makes good business sense. Again, we don’t want to be part of the club that grows for growth’s sake and just “gives it away.”
Monitor: What does VFG bring to the equipment finance marketplace that differentiates it from the competitors?
CE: VFG’s value proposition and delivery models allow us to maintain higher spread achievement for equivalent credit profiles. Our approach has allowed us to grow volume, while at the same time minimizing our portfolio costs. We are customer centric, with an extreme focus on repeat business with our customers. We started a long-term relationship with a Fortune 500 company by financing a couple laptops. The customer has grown into a $20 million relationship because we have been flexible up-front and listened to their needs.
We always take a non-traditional approach to a new or untapped industry or equipment type and use our creativity to employ unique financial structures. We take a long-term viewpoint with each of our customers and have a penchant to be able to look around corners and differentiate our product offering. We have extreme flexibility; we are generalists in that we accept all equipment types, all transaction sizes, all industries and all product structures. We are very good at cross-selling; we have unparalleled customer service; and we have the energy to stimulate significant growth by mining the heck out of our existing installed based. Forty percent of our volume is generated from repeat business.
Monitor: VFG managed to pull through the economic downturn with continued and growing success. What helped the company mitigate economic and fiscal concerns? Are you navigating any challenges as the world’s economy continues to slowly improve?
CE: Coming on board in 2008 presented its own unique set of circumstances with limited capital availability, portfolio credit quality concerns and cash flow. As a family business, it was quite difficult to eliminate headcount and steer the company through the head winds. Our key funding relationships, strict adherence to portfolio management and generation of significant cash flow from our operating lease portfolio allowed us to weather the storm and position us for strong future success. We never took our eyes off the ball and stayed ahead of the curve by constantly looking for market changes and opportunistic times to reenter various market segments. VFG takes a very pragmatic and common sense approach — our competition centers their thought process on should we or do we do this? But at VFG, we think that unless there is a good reason not to do something, we do it.
Kelly Wolfgang is a monitordaily contributor.
