The article excerpts below are from one of the top equipment leasing brokers in the field and his take on what it means to be a broker is spot on. The general sentiment is that a broker who expects to thrive and win new business has to do more than transfer an application from client to funding source- much more.
That is something we are firmly in agreement with at EZ Equipment Leasing.
In order to earn the commission paid and expect to do well in the equipment leasing industry a broker has to be able to add significant value to the transaction in the form of both advising the client on a customized solution to meet their business needs and assisting the funding source on understanding the deal and seeing the way forward to make it happen.
For a broker to be successful it is important that they have an understanding of both the business and the marketplace from which the client is operating as well as the equipment in question in order to be able to better advise them on what is feasible and fundable rather than simply taking down a list of requests.
At the same time, the broker has to have a good working knowledge of the entire funding side including how decisions are made and what variables and information are taken into account that the broker might be able to shed more light on and help the decision be made more easily.
As the industry evolves and the business environment thins out the herd the ones who will do the best are the ones who can add real value to the proceedings and the ones who will see their deal flow and closing rates dry up are the ones who only have a superficial understanding of what the role of the intermediary truly is and why they are there in the first place.
Below are some particularly poignant quotes from the article.
During times of change, uncertainty and transition, the successful broker is required to enhance the process by analyzing the needs of clients, suggesting in detail meaningful solutions, and by assisting funders through the credit process with a more in-depth understanding of the complete transaction. The broker must transition from a sales person and a processor to an advisor and consultative intermediary who offers powerful, value-added substance to all of the parties involved in the transaction. The broker, dealing in small- and lower middle-market ticket transactions must move beyond an application-only mentality and embrace a complete financial understanding of the transaction. Recommendations for approval must include rational, supported data which emphasize the strengths and full explanations to mitigate any of the weaknesses in the transaction.
The savvy equipment leasing broker will be fully engaged in the market and will have established relationships with multiple funders. The savvy broker will fully understand the equipment and its value to the client. The savvy broker will be able to analyze the current financial condition of the client and present a concise credit package with meaningful and supported recommendations. The savvy broker will be a business partner whose expertise adds essential value to every transaction.
One size will not fit most transactions, but rather the broker will match lease structures to individual cash flow requirements. The structure of transactions will be of primary consideration along with the credit requirements. The savvy broker will therefore attract stronger credits and facilitate more complex transactions, which will assist in higher approval ratios, stronger funder relationships, more repetitive business and increased profitability.
With every new challenge comes new opportunity. The equipment leasing-financing broker who is improving their personal skills, is optimistically engaging themselves with new clients and new vendors, and new funders will benefit greatly from the “New Economy.” The equipment leasing-financing broker who is an advisor and a respected business partner will always be in great demand by clients, vendors and funders.
