Alerus Financial has embarked on an expansion with the recent launch of its new equipment finance vertical in June 2024. The addition of the full-service equipment finance division is aimed at bolstering its commercial and industrial banking segment.

The Tip of the Spear

Equipment finance has long been part of Alerus Financial’s strategic plan; in fact, the company has utilized equipment finance verticals previously. However, the implementation of a fully dedicated team required, for Alerus Financial’s leaders, members of the team to align with the bank’s culture. Brian Scott, managing director, equipment finance at Alerus Financial, and his team were not only the right fit, but engaged with Alerus Financial at the right time for the new vertical to launch successfully.

Within Alerus Financial’s strategy and product offerings, equipment finance can be the tip of the spear to generating new accounts and enhancing relationships. “An equipment finance team was a natural fit for the company,” Scott says.

Introducing the Team

Heading this new venture, Scott is an industry veteran with a career spanning over two decades in various roles from credit to management. He began his career at Safeco Credit in 1997 and served most recently at Western Alliance Bank for the past seven years.

Scott is joined by seasoned professionals Dan Littlefield, serving as the division’s chief credit officer, and Mike Ryan, who oversees equipment finance operations. Littlefield has over 20 years of financial industry experience and previously served with Scott at Western Alliance. Ryan has over 30 years of experience in the industry and, like Scott and Littlefield, garnered extensive experience within banking and equipment finance at GE Capital and Western Alliance.

By the end of Q4/24, Scott plans to expand the equipment finance team to include additional credit and operations staff. By Q3/25, Scott’s year-over-year goal is to grow the vertical to 10+ staff members.

Delivering on Client Needs

Scott describes the new vertical as “generalist,” catering to the middle market. The team will not only target new client acquisitions but will also seek to deepen relationships with Alerus Financial’s current commercial and business clients.

The vertical’s overall strategy will emphasize flexibility to meet diverse client needs. Though the team plans to focus on industries such as trucks and trailers, manufacturing, healthcare, IT and corporate aviation, with little to no focus in sectors like oil and gas, mining and rail, they have experience within and are well-equipped to serve any and all of these markets based on demand. “Within the bank footprint, we need to be able to execute whatever our bank clients need,” Scott says.

Initially leaning on syndication for market penetration, the team plans to gradually shift towards a balanced approach of direct deals and syndication over the next five years. “What we really hope is that, by year five, we have a 50/50 split between direct originated deals and syndication,” Scott says. “That needle will turn as we grow here at the bank.”

Establishing Mutual Value

Scott and his team hope the new vertical will be another “arrow in the quiver” for Alerus Financial, generating new clients and enhancing current client relationships. Aligned with Alerus Financial’s existing commercial and business banking segment, the equipment finance team aims to complement and expand the bank’s service offerings. The vertical also aligns with the bank’s footprint in North Dakota and Minnesota, which the new team will be working in addition to their home base in Phoenix.

The team has a strategy for differentiating Alerus Financial’s equipment finance vertical from other equipment finance companies — relationships and execution. “There is a need in the equipment finance world for regional players like ourselves to find that gap between the big banks and the finance companies,” Scott says. He and his team aim to have a credit appetite, as well as the flexibility and speed to market that community banks can provide.

As they lead Alerus Financial into the equipment finance landscape with this new vertical, the team remains focused on delivering mutual value to clients, enhancing growth prospects for the bank and solidifying their position within the sector. Scott says, despite being only a month in, there’s already a lot of excitement surrounding the new vertical—primarily on the syndication side. “The market is ready for us,” Scott says. “Our team is very excited. We’re looking forward to reestablishing the relationships that we’ve had in the industry and delivering on all the commitments we made to the Alerus team.”