The US economy is entering a rising interest rate environment. Many originators in the commercial equipment finance and leasing industry have only experienced a low interest rate environment and will need to adjust their sales approach. Below are a few suggestions:
Do not panic! Commercial clients need and purchase equipment in all economic environments. Remember that you and your company do not set rates. The market determines the rates. You and your company will adjust based upon the larger market (you are not alone).
In a rising interest rate environment, vendors and end-users want to conduct business with professionals and advisors. Top originators are contacting their "key" accounts and helping them to accelerate their 2022 purchases before rates start rising. Top originators use future increases in rates to create a very real sense of urgency to close transactions now rather than waiting. The current environment is a great opportunity for those originators that are connected to the market and know what is happening. The commercial equipment finance and leasing industry had record activity in the last quarter of 2021, because businesses knew what was coming and started to accelerate their purchases. Savvy originators are pushing hard in the first quarter of 2022 to capitalize on that momentum. Do not ignore reality, embrace it.
Be proactive in supporting best industry practices. End-users will want to lock-in fixed rate financing for as long as possible; and will be requesting longer terms. Your company and funding sources will be seeking shorter terms to mitigate their rate risks. You want to protect the long-term viability of your company and be prepared to explain your position with confidence. Do not be surprised when approvals must close within 15 or 30 days or will be subject to payment increases. Do not ignore reality, embrace it. Explain it with confidence.
Top originators understand the market. They are connected to the market. They are the professionals that vendors and end-users turn to in changing times. Top originators outperform their competition because they are advisors and help their clients navigate new challenges and opportunities.
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This "Sales Tip" is provided by Wheeler Business Consulting.
