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Well, thank you guys so much for joining us today, and I'm,

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I'm super excited to welcome this individual.

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He is a person that has a wealth of knowledge and equipment financing.

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He's been in the industry for over two decades and he has done

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so much for this industry. So, without further ado,

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go ahead and introduce yourself, your title, and I know who you are,

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but tell our audience, uh, who you are.

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Sure. Thanks Johnny. Uh,

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my name's Andrew Carmen and I happen to be the senior managing director here at

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S Q N Capital Management. We are a, uh, equipment leasing, uh,

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financing provider. I'm also the, uh,

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chief executive officer and founder of the Pina Report,

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which is a credit technology that helps folks in this industry package deals,

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uh, assess deals and place 'em in the market faster and more efficiently.

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So let's get straight into it. Sure. So in equipment and financing,

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there's a lot of different branches.

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There's a lot of different things you can do.

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So specifically for your companies,

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what type of equipment and financing do you guys work with?

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We work with the wide range of industries from healthcare to manufacturing,

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to transportation, marine, air and rail,

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as well as things like injection molding and, and machine tooling.

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So we cover the gamut, Johnny.

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So how long have you been in the industry and kind of walk us through if there's

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any specific equipment market that does smaller deals like the, the,

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the gambit of deals that you guys work with.

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Sure. We work with things from a small, as small injection molding machines,

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but also like 3D printers.

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We'll see those transactions and small pieces of construction equipment like a

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Bobcat, um, et cetera, all the way up to, you know, a, uh, a wide body,

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uh, aviation, commercial airline.

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How many years of experience do you have under your belt with, uh,

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this specific industry?

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More than a couple decades, about 30.

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So for brokers that are starting out in this industry, what problem or what,

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uh, challenge have you seen specifically in this day and age that they're facing

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right now?

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Well, a couple things. As deals aren't getting closed,

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there's plenty of deals that get identified.

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Funding sources like banks now are pulling back and the reason they're pulling

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back is twofold. One is interest rates, number one,

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their own cost of capital continues to be increasing and that makes it

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difficult for them to find a transaction and actually, uh,

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officially decide on doing a deal to approve a deal, uh,

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because they don't know what their margin will ultimate ultimately be. Secondly,

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they're worried about can the company that they're gonna finance for the piece

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of equipment, can that company maintain, uh, their own cash flows?

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So let's talk about that. Brokers are not closing deals, right?

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So specifically with high interest rates,

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that's not playing in their favor and that's not something they can control.

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Exactly.

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So what do you do as a brand new broker that's trying to break into this field?

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What do you do? How do you maneuver that?

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Great question. Like I said earlier, focus, secondly,

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separate the things or identify what you control and what you don't control.

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You're spot on. They can't control interest rates.

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They can't control the behavior of a financial institution or funding source.

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What they can control is knowing their deal,

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knowing their customer as best they can,

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knowing the funding source and what they need.

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So package that effectively together. Remember,

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this is a relationship business even in 2023. It hasn't changed in that regard.

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And so if you can present to me consistently,

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and we don't expect you to know everything about your transaction,

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but if you can identify what is needed in a transaction and you come to us and

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you say, look, we know these three things, what would

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You say is the single most important thing that every broker starting off in

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this industry should know?

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It's really critical for new, uh,

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brokers in the industry and they can be successful.

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Focus initially both on the industry equipment and then on a handful of funding

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sources like us. And then we work together and actually confidence builds.

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And the next time you show me a deal, I'm not asking 10 questions,

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I'm asking five.

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Let's talk about from start to finish.

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Kind of walk us through how do you get a deal, work it,

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close it.

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So you've identified a need, you found somebody who wants the equipment, uh,

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finance, you've found a potential funding source. Now the real fund starts,

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and what I mean by that is figure out who you're getting paid from.

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Are you picking up a fee from the funding source, two points, five points,

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whatever it may be? Or are you getting paid by the client? That can happen too.

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Takes longer to get to that position,

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but I expect you to know the deal and help me get it across the finish line.

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So what happens, you know the deal, you found the equipment,

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you've presented it,

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it's okay to feel out pricing and you may want to call around or present the

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deal to a couple of different folks to get a sense for that.

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Once you've narrowed that down and you've got one or two parties that are really

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interested like me, then we start working on getting the customer on the phone.

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So you get the customer and me on the phone,

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we have those diligence discussions, and then we take it from there.

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And you're a point person,

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which means that you need to be responsive and don't focus on 15 deals at a

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time. Focus on two or three so that when I call you,

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you are there and I at least feel that you're chasing the answers down.

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So a lot of people have this mindset that the more deals they chase,

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the more money they're gonna get. Why is that fitting

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The Craig mind? It's the, it's the absolute opposite.

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I think it comes down to what type of broker somebody wants to beat.

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And I would say there are plenty of brokers that play the volume game.

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And what I mean by that is coming across any type of deal,

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throwing it over the fence, you know, and that works sometimes.

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And if you get a bigger, a big size deal,

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you might be able to make a sizable fee that only works in booming markets.

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In this market in particular, you have to go. Less is more.

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You have to focus more,

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you have to be more thoughtful and purposeful about how you package that deal

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and how you place that deal with whom.

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And I think you need to spend more time and you might not close deals earlier in

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the year because you need that timeframe to, uh,

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to get deep and build a relationship.

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But I think you'll find by the end of the year you'll close probably more deals

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at a higher margin because you've focused and you've helped me, uh,

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answer questions that I have. That's what's critical.

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What's the number one mistake that brokers do when they're getting ready to

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close a deal? What is the thing that you've seen that's the biggest, uh,

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that's the biggest no-no.

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Well before they're just about to close a deal or early on.

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Oh, that, that would make this deal fall apart.

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Oh, they,

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they drift off back or they actually stop being there for me.

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I'm not confused. We know that they also represent the customer and the client,

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but in most broker relationships,

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it's the funding source that's paying the broker fee.

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And so we don't expect them to, uh, you know, do everything in our favor,

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but we expect a transparent relationship.

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So brokers face a lot of obstacles nowadays. Um,

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what are some other obstacles that you have seen they face?

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So what are some solutions?

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That's a great question.

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I I think they face a lot of things where they sometimes focus too widely.

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So they find a deal and yes, it's a legitimate deal. A customer needs financing,

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but they really don't understand the industry. So they may come across a manuf,

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you know, a plant, a manufacturer who wants to do an entire manufacturing line,

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but they've spent most of their time focusing on smaller deals like construction

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deals or you know, maybe over the road trucking, small logistics companies,

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another great little business for brokers. There's a lot of, you know,

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small trucking companies that need help. Um, and all of a sudden I'm used to,

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I've seen five deals from broker ABC in trucking or in injection molding,

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and all of a sudden I see a 10 million manufacturing line that they

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have no knowledge of the equipment,

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they have no knowledge of how those transactions get worked out in a bankruptcy,

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and they have no real knowledge of how to position that deal with me.

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That is a huge mistake.

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I see brokers trying to be everything to everybody and really following the

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deal. That happens to be a legitimate deal,

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but it's not the right deal for them.

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So it's really hard to walk away from a transaction that will

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close in the next, you know, three to six months or 12 months,

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but you may not be the person to get it across the finish line.

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So what I recommend in those situations, find somebody who is team up,

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you'll split the feet. It's not too different from real estate brokers.

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So the name of the game and the goal of this specific industry is being

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efficient. Yes. Having a system in place mm-hmm. To make money. That's correct.

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So if someone put has a system in place and they have their own their own,

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you know, system where they get the job done,

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they're having success mm-hmm. In their first year,

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what is a salary? They could expect?

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Salary.

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I can't speak to the salaries because I think there's a lot of individual

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companies that start out sole, you know,

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individual brokers and so how much are they paying? Sell,

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don't know if you're gonna go work for a broker,

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if you're gonna be on the inside sales desk, you know, uh,

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maybe 30 to $60,000 is a sales base plus commission.

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Normally what a lot of brokers do, if you wanna learn the trade and you're,

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you're willing to spend a year or two with one of the major broker houses,

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they're gonna be looking for inside sales reps. They pay them a base,

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a small base, high commission,

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or normally a lot of 'em will pay you up to 15% of the fees that get generated

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on a deal that you, uh, you originate. So that's, that's one angle.

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If you're running your own shop or you're part of a small team and you're

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originating deals and placing them, uh,

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completely with a funding source like me,

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you can pick up anywhere from 2% to this is where I get jealous.

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10% of a transaction based on how you structure it. Your

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Advice for the young guys that are young people, let me rephrase that.

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Young people that are getting into this industry, right?

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And they wanna make a million dollars, they wanna make the big,

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big money you're getting

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Now you're getting me jealous of

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Their general, yeah, I want a million dollars. Right? But for those guys,

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what advice would you say would you give them in regards to the time period they

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have to put in to make big money? Three

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To five years? You can go make minimum. You can go make, yes,

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you can go make decent money if you want to in three years you have to go work

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for another larger firm, but you're grinding,

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you're gonna have a certain patch that you can work i e zip code or states or

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region or product type. Uh, you're gonna be smiling and dialing.

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That's not necessarily bad,

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but if you're good at that and you don't mind the grind, it is a lot of work.

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And the challenge with that though is you're working for somebody else and so

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you're not really building equity in your own pipeline that you've spent years

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maybe pu pulling together, you'll be rewarded, but you know, not as much as if,

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for example, you did that for a year,

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bounced off and perhaps started your own shop. I hope my,

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my current partners and customers out there on the broker side don't hear this.

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Um, you know, but go off on your own so to speak or join a smaller team.

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Smaller teams has have less overhead and don't be greedy on the fees.

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It's okay to earn two points on a deal.

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It's okay to work with another broker and earn an a appointment. The deal,

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get the deals closed. When you get more deals closed,

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you build momentum and within five years you're gonna have people knocking at

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your door, seeing you as an origination machine and wanting to know,

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do you want some equity to come into your business?

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And how do we make you a finance company? That's what happens.

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Andrew,

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thank you so much for joining us and for sharing the wealth of information that

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you provided here, because I know brokers out there appreciate that information.

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Johnny, it's been great. Thank you very much.