Equipment dealers should evaluate the vetting process of their third-party financing partners to deter bad actors and prevent false alarms.
Dealers who do not have a process for sales personnel to vette their financing partners put themselves at risk. RJ Grimshaw President and Chief Executive Officer said: Unified Equipment Financeat a panel at Equipment Finance Connect in Charlotte, N.C. on Tuesday.
“You are damaging your dealership and reputation [at risk] they are partnering with someone security breachor if they charge interest rates or structures that mislead customers,” he said.
A defined investor vetting process should be part of every deal, Grimshaw said, rather than leaving decisions to salespeople. “It’s about trying to educate dealers on a defined process, and that’s what we do. We share best practices on how to vette our partners, even if it’s not us. “
“Make sure you’re doing proper due diligence when choosing a partner,” he said. [partner] Because we have all our own niches. ”
Navigating risk in dealmaking
Proper vetting of lending partners is essential for dealers to avoid financial risk when trading, says Skip Owen’s sales director. Charlotte, North Carolina Hills Machinery.
“From a money management perspective, funding in the elapsed time between the completion of a transaction and the receipt of money is a significant risk if you are dealing with a partner that has not been properly vetted,” Owen said. He said, “We need to know who we’re doing this with.”
Dealers and lenders who partner on due diligence present a best-case scenario for long-term success, Owen said.
“We try to talk to each other. [sales] The same goes for teams. very keen to trade They don’t look long term,” he said. “As dealers, we feel we have an underwriting responsibility. We are happy to help with the collection process — we have the best relationships with our customers and hopefully we can help them through it.”
https://www.autofinancenews.net/allposts/risk-management/equipment-finance-executives-evaluate-importance-of-vetting-financing-partners/ Equipment finance executives value the importance of vetting lending partners