So I'm very excited today because today
we're gonna be talking about a specific area of the alternative Finance
industry and we have someone very special that's gonna walk
us through just different topics regarding that industry.
So go ahead and introduce yourself and your
title and the company that you're with
president of
LLC, we're Bank owns company we're owned
by Brookline Bank and we just celebrate our 25th
anniversary last year the 25 years in the
industry. Yes. So how did you get involved in
this industry I get in in 2000.
I started working.
I got a power legal degree. I was 25
years old with three children
under five and I was on welfare and I went
to a local college and got a party good degree in 18 months.
And so I got a job at Fleet Healthcare, which
is no longer around they were brought up a Bank of America in 2005,
but I got a job there doing contracts and that's
how it started the school sent me
on an interview. I got the job completely accidental
and it is now my passion.
So let's talk about Eastern funding what exactly does Eastern funding
do and kind of give us a brief walkthrough of the
industry.
Well Eastern funding, I guess it's been around for 25 years it was.
Founded by Michael fanger and Brian Grau who are
both still part of the organization and when we
when they started the company it was primarily with financing coin
laundry in dry cleaning Ensemble Vegas.
We have since evolved a bit. We no longer Finance
dry cleaning but coin laundry is about
80% of our portfolio. Excuse me. We also finance
car washes. We still Finance bodegas.
We do some commercial real estate financing primarily
to for customers who have who
are within our industry, but we also have two other
business lines one of which is specialty vehicles
and then we most recently acquired a company
that finances fitness equipment. So those
are our expertise. So if we
want to get even more specific into the equipment what type of
equipment would you guys say you guys specifically Finance if
you can give us a brief breakdown of that so we Finance everything
from the carts in the coin laundry to
the big gigantic, you know machines then
when I talk about car washes we're talking about, you
know, the car wash an Express Car Wash smaller or
the bigger ones with the big tunnels. We're all
talking about, you know, like I said tow trucks and those
types of vehicles, but then also when we're talking
about fitness equipment, we're talking about, you know, the treadmills and
all the machines.
That's a lot. So
your company specifically it's huge in the equipment
financing world. So the main question is
how do customers find you guys?
Well, we are very fortunate in that we are
65% reply customers and I
will tell you that that's completely 100% based on
relationships. We are you know,
our our salespeople are not just salespeople. They're
people's they become family to our
customers. We have generations of customers where
we Finance the first coin laundry for the parents and
now their children are getting into the business now,
we're financing their children's businesses. So it's really really
a lot of it is based on,
you know, the relationships we have with our customers our
borrowers. So let's talk about the importance of building
a relationship with a client making sure
that they become like family so you
can build up this network of repeat customers
over and over and over again because that's what's
Driven you guys to be this successful in this
industry. So how do you build that?
Well, I'd say that it's a combination of our salespeople
are experts, right so they're not
selling just different types of loans or
leases. There are part of what they do for
their customers is they become advisors sort
of right someone that you can trust and talk
to about you know, is this a
good idea is this a good location and have real honest conversations. They're
all experts within their area and I
think also there really believe in what they're doing. They're really
passionate. They don't want to this is not about just selling
a product moving on to the next loan. They're really
care. They know people's families. They're they're invited
to weddings like their relationships Run
Deep. And so I think that that's part
of it also though, you know, look at our
our customer base. Our customer base is very diverse. And
we as a company are 63% minorities
and
think that one of our secrets is that we give
people
a safe place
they you know, when you're a minority and you
interact with people whether they're same ethnic group or different ethnic
group or whatever. It may be but you see that there's it is
an organization the values you as a person.
Then you tend to want to continue those types of relationships with
them. So talk to us about how big it is
to get a referral. How do you get a referral in this industry? We do
use Brokers on occasion most the people
that we've been doing business with for very very very long
time. And there's a lot of trust and loyalty
but I think our referral
source is is really mostly our borrowers who've
had great experiences. And then also the
vendors who have had great experiences and understand that
we will prioritize them and they're equally as
valuable to us as our customers are how important
is it to create an environment where these workers
number one stay here this long and also build
that type of relationship kind of walk me through how important that
is to balance out.
But it's what you in terms
of longevity and employees. That's critical. For example,
I've been here 18 years Michael fanger
who started the company the founder and Brian been here
20-something years, right? We have employees have been here 15
20 years. So let's talk about an
application process simple application process here at
Eastern funding from start to finish. What does that look like? How long
does it take to close and kind of walk us through the process? Typically the
way it works is
For example, we have an electric electronic app on our website so
you can apply right on our website.
And receive that application and either comes in
house or like I said a large a number
of our referrals come through vendors since it would either
be someone that goes into a vendor and says I want equipment and then
it gives a handmar application or they go online
they found the find us and apply online. Once we
have that application in-house we've
Focused a lot on having a very robust system
in terms of technology. So we
have a lot of Automation and then go through on the writing and
it depends on the size of the transaction whether one person
can approve it. Our credit committee can improve it or it has
to go to the bank for approval right? Because we are bank owned company
and there's a lot of compliance that we still have to adhere to
everyone wants to kind of start diversifying.
What would you say to a broker that hasn't really worked an
equipment financing and has worked with like unsecured working
capital?
And now they're diving into human financing. They're discovering. This
is trying to work this what advice would you give to them?
Well, I would say someone getting in you really have to study and you
have to
Understand the equipment that your financing the needs
of your customer also the type
of customer you have right? It's is it a small business or is
it, you know, a larger public company
that your financing is it a non-for-profit and
so you have to understand all those different variables before
before you can you
know, really take a risk and and then determine
how risky do you want to be in terms
of?
You know because unsecured is very risky. So but you
know, if you're gonna make a larger transaction you want to make sure you understand do I
do I need what's my collateral? What does it look like? Is it
moving collateral? Is it collateral? You know, for example
a car wash once you have a tunnel in there, you can't
remove the tunnel. So is this do I have
the documentation in place for me to be able to say oh
I can bring someone else to run that business. Yeah or something
on that nature. So you really need to understand what you're doing so
can weighing it?
In order to become an expert and not wing
it.
What would you say for someone that's that's getting in learning. What would
you say is the timeline for them to become an expert?
Oh, well, I mean depends out
quick of a study you are how much time you devoted I would say. I always
feel like
Well with it's funny because with employees always tell them for a year.
You're new in my eyes. You're new for a year because there's so much to learn
even within this organization. So I would
say you need at least five years to be
an expert at least five years. Yes, minimally five years
and I say minimally
because it you have there's so many different aspects
to lending everything from the documentation, you
know, your documentation determines whether you go
to litigate or not how you collect can you collect, you
know, everything from customer service understanding how to
provide customer service on their writing is critical
if you don't understand your equipment and your collateral and
your customer, you can't underwrite a transaction and really understand
the risk that you're taking what impacts have you seen and
what changes if people had to do because of things like
inflation and because of the way the economy is today.
Well again.
it's we look at equipment Finance as
Global thing but it's really segmented right because
for example if you financing planes is a very different experience than if
you financing computers or phone systems or copiers and
so inflation impacts every
industry differently and that's why our relationships come in right? That's
where what makes that separates us from our competition. Is
there our salespeople are able to have
conversations with our customer around how you be impacted
by the change of cost of living right everything
from the utilities the equipment costs the increasing
rates all these things impact the customers'
ability to pay their loan. What
we want is long-term success for our customer
right for us. It's not just selling this one product. It's not
just the bottom line is the entire impact is
we want long lasting relationships. That's what
we're 65% repeat customers people need that
and want that. So that's really really what
makes Eastern funding.
An amazing place to do business with and to work
for so when Nancy thank you so much for your time and for
chatting with us regarding Eastern funding and Equipment financing because
I know that the knowledge you shared with us people are gonna take it and
they're gonna run with it. So, thank you so much.
He's been a pleasure. Thank you.