The Changing Face of Finance

We’ve all heard about so called “bankers’ hours.” But even if they existed in the past, they certainly don’t exist today. It wasn’t all that long ago—several decades at the most—when banks were open Monday through Friday from 9:00 am until 3:00 pm and closed early on Wednesday, that was pretty much it.

Needless to say, today, those kind of bankers hours are a thing of the past, right up there with the typewriter and telephones that a­re connected to the wall. Banks have altered their entire business models to more effectively compete for retail banking customers, and these changes continue to evolve to this day.

In fact, the changes that have been implemented by the banks are indicative of widespread change throughout the financial services industry. Gone are the days when a customer’s only option was to play by the finance company’s rules, whether they needed banking services or equipment financing. Today, the marketplace dictates the tempo of the financial services industry.

To maintain pace with the evolution of the marketplace over the past several decades, the finance industry has changed dramatically, and the rate of change won’t abate any time soon. Finance companies have had to streamline their operations while developing new products and services to meet the needs of their customers and to solve the changing problems of business.

Similar to the way that personal computers have evolved over the past 30 years or so, it wasn’t that long ago when leasing equipment was a new and novel approach to acquiring equipment . Once it became clear that leasing was a viable alternative to traditional bank financing or paying cash for equipment, the concept took hold and began to evolve, right along with the customers who were now using it.

In the early days of lease financing, when the finance companies and customers were both learning the leasing ropes, each equipment transaction was a standalone event. Customers worked with their equipment vendor, decided what they wanted, and then considered leasing as one of several possible payment methods. Lease rates were the primary decision criteria, and leasing itself was essentially a commodity process.

Over time however, leasing companies have become experts at fashioning leases into powerful business tools. Today, a lease can become a strategic business advantage as opposed to merely a commoditized means of acquiring needed equipment. The knowledge of how to strategically deploy a lease has become a valuable addition to a leasing company’s portfolio.

Apart from that, equipment finance companies can no longer focus on funding individual or isolated transactions. They must instead seek to build long-lasting customer relationships that grow and expand based on mutual trust and a solid exchange of value. These companies now offer comprehensive solutions that span not only the entire lifecycle of the equipment, but also include a full range of services and related consumables as well.

To take full advantage of these changes, customers should take advantage of the new model for acquiring and funding new equipment. It’s no longer a matter of comparing rates from several different companies and then selecting the lowest one. What’s far more important is to evaluate the total value that a finance company can provide across the entire equipment acquisition spectrum, from the original quote all the way through the final retirement of the equipment.

The equipment finance industry has developed a broad range of expertise in packaging turnkey equipment financing solutions that can help customers to solve a wide array of business problems. This kind of expertise is invaluable in not only helping customers to optimize the value of the equipment they acquire, but to accelerate sales, streamline operations and to improve the profitability of their businesses as well.

Another change that has taken place in the equipment finance industry is the elimination of the “one-size-fits-all” approach. Successful finance companies now offer highly flexible financing programs that can be tailored to an individual customer’s specific needs and budget requirements. Customers are realizing that by combining this kind of flexibility with solutions-based expertise, a financing company can become a value-added partner instead of a commodity service provider.

The new reality is that business customers should not only expect but should demand extended value from their financing partners. Bankers’ hours are a thing of the past—full-service, value-added, customer focused financing is the new reality.

See Also // For Successful Selling, Focus Your Focus and The Hardest Sale You’ll Ever Make


Miles Herman

Mr. Herman is President, Chief Operating Officer, of LEAF Commercial Capital. Mr. Herman has more than 25 years of operations experience at commercial finance and leasing companies in various senior executive operational roles with Fidelity Leasing, Inc. and its successor, the Technology Finance Group of CitiCapital Vendor Finance, as well as Tokai Financial Services, LSI Leasing Services, Inc. and Master Lease Corporation. Mr. Herman is currently serving on the Board of Directors of the Equipment Leasing and Finance Association. He holds a B.S. degree Honors from Villanova University.