Five Reasons the Independent Lending Industry is Growing
*This post is from CMB partner Essex Lease. Visit them for flexible lending solutions.
Independent lending in Canada is growing in a big way — in fact, it’s anticipated the sector will be worth more than $100 million CAD by 2025.
There are many compelling reasons business owners are reconsidering where they’re building lending relationships. So, we sat down with three members of the Essex team – Trevor Sterner, Maria Vaccaro, and Luke MacKenzie, for an inside look at the reasons more people are choosing independent lending, the difference independent lending options are making for Canadian businesses, and what’s next in the industry.
Reason #1 – Business Owners Recognize There Are Good Players in the Independent Lending Industry
In the past, many Canadians only ever dealt with traditional banks, so it’s natural to have some questions about how independent lending works and whether they can trust that a lender has their best interest at heart.
“Before I started in this industry, I’d heard from some that the industry had a less-than-great reputation,” explains Trevor. “However when I asked specifically about Essex, I was told of the great reputation of the company and people, which was the main reason I was willing to consider and ultimately join the Essex team. I’ve come to see there are good players out there. Not just us, but Essex definitely strives to be the best in terms of putting customers first and representing our industry in a positive way.”
While it’s important to do your due diligence before working with any lender, there are many independent lenders out there who are pushing the industry forward in a great way. And businesses are recognizing the value of flexibility that independent lenders offer.
“I have been in finance my entire working life,” adds Maria, “I believed that independent lenders were limited in what they could finance for their customers. However, I’ve come to realize that’s not the case at all. The industry has many different styles of deal structuring to accommodate the needs of our customer base.”
Reason #2 – Relationships Matter More With Independent Lenders
A good independent lender prioritizes customer service and relationship-building — and that can be a huge draw for businesses that aren’t seeing that level of service at their bank.
“Independent lending is a personable experience,” explains Luke, “It’s a lender who takes the time to understand both the client and the way the business operates.”
“I come from a place where you buy one unit and get it financed through a bank, and the deal is done,” adds Maria, “At Essex, we do a lot of different structuring of deals to help our customers achieve their goals. Independent lenders go to extraordinary means to get a deal done for a client. Traditional banks must be within financial guidelines before even attempting to consider the deal. Independent lending is the ability to compete against the large banks on our own terms.”
Reason #3 – Independent Lenders Can Save a Business When a Bank Can’t (or Won’t)
Every business owner knows that banks are risk averse. But all businesses go through cycles (as does the economy).
“Over my years of experience with banks, I have witnessed transactions that would often end in the dismantling of companies,” says Trevor, “It often appears to be more important to the bank to finalize things than to find an optimal outcome; acceptable is usually the bar measured to.”
“This means that many companies that are left without options end up being collapsed unnecessarily due to a lack of patience and detailed customer knowledge on the part of the bank. At Essex, we’re a lender that understands times will be good and bad but that will continue to be there for our customers through the cycles. For us, an optimal outcome is to help our customer’s business succeeds.”
“The key difference is that at Essex, we will take the risk on a client,” adds Maria, “Sometimes good people are in a bad situation that they cannot control. The Essex team listens to their customers and works with them to find a solution.”
Reason #4 – Independent Lenders Help Businesses Manage the Unexpected
When the unexpected happens, a stronger relationship with your lender will always put your business in a better position to manage the storm.
“Because independent lending is way more personal than a traditional banking relationship, there’s huge value in that relationship for the business if they find themselves in precarious circumstances, ” explains Luke.
“It’s harder work during the tough times,” adds Trevor, “but that just means we have to keep our creativity hats on more. Because we can be flexible in our lending style, we can be there for businesses at all stages in their cycle. Working with a customer to achieve a win-win scenario gives us a strong sense of pride.”
Reason #5 – Independent Lending Will Become More Essential to the Success of Canadian Businesses
To say that the last couple of years have been unprecedented would be an understatement, and businesses will continue to need flexibility to adapt.
“I believe that independent lending is necessary in the world we live in today,” states Maria, “Big banks would not even consider assisting some of the clients we help because they would be too preoccupied with the risk.”
“Simply put, independent lending fills a void that banks are not well structured to fill,” says Trevor,” and that requires us to be smarter than the banks, providing form fitted solutions, rather than simply transactions for our customers.”
“I know we have put together some amazing deals that have helped businesses navigate through distressing business cycles and get back on their feet.”
If your business is looking to build better lending relationships in an unpredictable market, it may be time to consider independent lending.
For over 35 years, Essex Lease Financial has been the best-of-the-best in the independent lending industry. Our financial experts care about helping your business succeed with every deal, every time.
Get in touch with us today to learn more or get started.