National Funding, one of the country’s largest private lenders of small business loans, today released remarks from Founder and CEO David Gilbert’s recent panel discussion at the 53rd Annual Equipment Leasing and Finance Association (ELFA) Convention on the topic of the evolution of the equipment leasing industry.
Focusing on the changing landscape of alternative lending, David Gilbert; along with co-panelists Ben Gold, president of Quick Bridge Funding, and Brad Peterson, managing member at Channel Partners LLC; discussed the shifting landscape of the market from the perspective of delivery channels, changing products and changes in customer behavior; best practices and how to avoid common mistakes for marketing effectively to different types of businesses; and how to embrace the evolving technology and offer more than one product.
“Since the recession of 2008, the lending and leasing industry has seen a large impact in both the landscape as a whole and customer behaviors; many new players have joined the alternative lending space and are driving change for small ticket lending,” said Gilbert. “It is important to understand how the business has evolved from purely equipment leasing to that of offering working capital as another option.”
Research shows that banks aren’t moving quickly enough to keep up with the changing industry, and they seem less inclined to lend to small businesses, which is why alternative lending is growing so rapidly. The business has evolved into a multi-faceted industry, encompassing traditional products such as equipment leasing, and new cash-only products such as Merchant Cash Advance, Working Capital, and Daily Payment loans. According to Gilbert, some of the biggest changes being seen today are quicker approvals driven by new technology, greater access to funding sources, and new product and payment schemes designed to meet both the borrower’s abilities to pay and the lender’s need for quality.
“Some alternative lenders only offer one product, whereas many customers prefer a choice of products that address all of their immediate business needs; therefore a customer is less likely to be cornered into a product that is not 100% in line with their needs,” added Gilbert. “This is why alternative lenders need a selection of many products, to ensure their customers find a solution that both meets a budget and meets the financing need.”
With the landscape of small business lending shifting, methods of acquisition are making a shift as well. Gilbert, Gold, and Peterson emphasized that lenders understand the changing behavior of their customers who are shopping for financing. While traditional mail and the internet are still viable acquisition methods, customers more frequently seek personalized attention and guidance regarding their individual businesses and the most appropriate products to fit their needs. For this reason, National Funding’s team is specifically committed to spending time with customers so that they feel comfortable with the process, and fully understand the product offerings and their options.