Hi everyone, and thank you guys for joining us today.
I'm very excited because I am talking to a veteran of the equipment finance
world and he is gonna bring us a wealth of knowledge.
Steve has been in the industry for over 30 years. Steve,
thank you so much for joining us. Why don't you go ahead and,
and introduce yourself and the title of your company and the role that you play
in your company.
My name is Steve Geller. My company is Leasing Solutions llc. Uh,
it's a company that I formed in 2001 to work with, uh,
with brokers to assist brokers in getting transactions funded.
So, for those watching,
can you kind of explain to us in a sentence or two your exact position and how
exactly do you work with brokers because you,
cuz you have a very unique position.
Sure, sure. So I came up with this plan to, uh,
to do broker deals with funding sources and reveal to the funding source
that there was a, another broker involved. For the most part, these were,
uh, funding source friends of mine, and they said, go ahead. If you,
if you qualify the broker, were okay with moving forward.
So is it okay to say you're a broker's broker?
It's fair to say I think of myself as an intermediary.
What is the thing that you would say is, uh,
the one biggest challenge that brokers nowadays are facing?
Finding the right funding source. Uh, knowing,
knowing which funding source to send a deal to, and, uh,
accepting the results.
That is the biggest challenge that you see brokers facing.
What is the biggest mistake brokers make that you've seen
recently?
Well, definitely trying to put a, uh, round peg in a square hole.
Uh, you know,
sending the wrong deal to the wrong funding source and not understanding the
requirements of the funding source, what niches they're in, what they like,
and what they dislike. Uh, geographic restrictions, rates,
uh, that will, uh, allow you to close the deal with the,
with your customer. If the rate's too high, the customer might say,
I'm not signing with you. After spending all that time on an approval, uh,
with the funding, with the funding source charging too high a rate,
you walk away without, without a deal because the customer won't accept it.
So I, I want to elaborate a little bit more on that, but before we do that,
let's talk a little bit more about the size of these deals,
the range that you work with. What does that range look like?
Are we talking $50,000 in equipment financing? Are we talking about 5 million?
What is the range?
No, no. My range is, uh, at a low end I can do $5,000 deal. Uh,
and I usually do up to two, 2 million at maximum.
But, and it depends on the amount of work involved.
Like I tell my brokers if I can,
if I can take a $5,000 deal from you and just put it in the, uh,
you know, as a pdf, send it to a funding source without not a lot of work,
and I get an answer easily that I make a few hundred dollars on a,
on a deal that makes sense for me. You know, I'm not a,
a shop that grinds out every deal that's gotta pump out the business.
Uh, I can do a small deal and, you know,
and if there's a minimum amount of work, uh,
and I can do a large deal to put the work into it to make sure it
Fits. There's so many funders out there.
How do you shop for the right ones for your, for your business?
Well, you have to get to know what the funding source likes,
go on their website, attend, attend conventions.
There were zoom sessions, there were meet the funder sessions.
Well, let me ask you,
there's a lot of people that they think equipment financing, you know,
is just like heavy machinery.
Could you walk me through the different branches if you,
if you want to call it that, of equipment financing and, you know,
knowing that it's just not heavy, heavy equipment machinery?
Well,
It's technology equipment.
We got technology,
Computers, uh, there's a healthcare marketplace, medical, dental,
and a specialty retail, uh, restaurant financing, you know,
franchise financing.
What do you look for when you're looking for funders?
Well, the funders will generally list what industries they like,
what industries they don't like, and what industries are forbidden.
So you have to look at the keywords on the website. Right,
Right, right. Well call up the broker rep and say,
will you do restaurants? Will you do computer equipment? Will you do trucks,
trailers?
And that seems something so simple to do.
But you've seen the problem with brokers that people don't really do that.
Correct. Right,
Right.
It's something that seems logical.
Elemental,
Elemental. That's a, that's a great word. Right. But people don't do that.
Right.
What else should people be doing in order to be successful in this industry in
order to find the right funding source in order to build that relationship,
in order to make money? What el what should other people be doing?
Well, you should have a number of different funding sources.
So a number of different funding sources is number one.
And, and you should have more than one funding source in each niche.
Okay. More than one in each niche. Right, right.
Okay.
Because what happens if you have a repeat customer and the first funding source,
you're, you have a, your prior deal at,
they may be up to the maximum.
So you need another funder with similar taste in deals to take,
to take the second, second transaction. And you also want to protect yourself,
especially in this marketplace, if a funder pulls back,
you, you don't want to be relying on,
on one funding source if all of a sudden the bank has liquidity problems and
they're gonna say, we're growing too fast, or, you know,
we have to slow down and, you know, and some brokers have been cut off.
Give me three tips on how a broker could build a relationship with a
funder for their deal, whether it's now or in the future. Well,
Again, you know, conventions, phone calls to broker reps,
to the funding source reps, uh, talk about what they like and what they dislike,
size,
size of the deal they wanna look at if they have those kind of
transactions, try out the funding source
When it comes to the smaller deals, uh, uh,
for someone that that's just starting in the industry,
what would you say is the best piece of advice for them to continue to, to,
to build, uh,
their portfolio and continue to build their relationships with others?
How do you do that? How do you maintain the momentum?
Well, just,
you have to have a source for that business to get deals approved for a vendor
and get the vendor on your side referring that,
that business to you as a broker. And, uh,
and make sure you send it to the right funding source. Uh,
get 'em turned around fast, get 'em approved, get 'em documented,
get 'em funded.
Let me ask you this, from start to finish, from when,
when a broker starts the deal, they have the right funder.
They ha they understand the funding source from start to finish.
How long should it take?
Uh, no more than a week.
I've talked to a lot of people and they've told me anywhere from three to five
years is when you fully start understanding a specific niche when
someone's just starting out. I'm
40 years and I'm still learning it. Exactly.
I think that's, that's,
that's a great perspective to give the people viewing this.
But for people that are just starting out and they're trying to understand
everything, walk us through why it's important to find a niche,
find the funders of that niche and really start creating your business around
that versus trying to learn everything.
The key is to find a mentor,
to find another broker in the business, uh,
who you get friendly with.
Maybe someone you've gone to a convention and met and chatted with and,
you know, pick up the phone and call and say, Hey, I have X, X, Y,
Z transaction. Uh, what, what can I do with it?
Or what do I need to know about it? Or who does these types of deals? You know,
and, and, and why, why should I go here or not there on a,
on a transaction? You know? And it,
we have a very friendly industry and, uh, you know,
if you make the right friends and mentors,
they'll lead you in the right direction.
So for those guys that are just starting out in regards to the size of the
deals, what should they be focusing on?
Because I know everyone wants to make money and everyone wants to make the big
bucks.
So what would you say is the range that they should start focusing on to start
making money?
Well,
it's a tough question to answer because there are a lot of different funding
sources that look at, again, look at different size deals,
and it depends what you, uh,
what the broker feels comfortable getting involved in.
If he likes complex transactions, do a million dollar deal and, you know,
and make a few points on it, that's a healthy commission as well.
But there's more work involved on a small transaction, you know,
$25,000, $50,000 deal. You can do some work on it,
send it in and, you know,
and get it done faster than a million or $2 million deal.
Let's talk commission for someone that's starting out,
for people that are new to the industry and they want to have a solid,
healthy commission their first year, what does that range look like?
What have you seen?
Well, I, you know, on a smaller transaction, you can make 10 to 15 points
And on a bigger transaction, on the bigger deals, well,
Uh, two or three points, you know, a million dollars,
you can make two or three points, not, not an unhealthy amount as well,
but, but if,
but if you have a million dollar deal and you try to make eight points on it,
you know, and you could sell a customer on it, you got a weak credit, you gotta,
it's, it's indicative that there's a problem in the,
in the transaction that may be the funder who approved it doesn't
realize
because a customer who's willing to pay that high rate,
uh, could be desperate for the money.
So when it comes to points and when it comes to understanding, uh,
what someone can expect their first year, um, in commission,
I guess like their salary, you know, obviously this is a commissioned job.
What would you say that magic number is between what range?
Well, there's some, some guys who are making in the, uh, uh,
close to a hundred thousand dollars if they pick the right,
if everything pans out right, you can start pumping out deals and, uh,
and do pretty well,
Inflation is big right now. Um, that's,
a lot of companies are worrying about that.
What impacts have you seen impacting the equipment financing world?
Well, I'm seeing tougher approvals, uh, more,
more declines on good transactions.
So for someone that's seen, how do you maneuver that?
How do you maneuver this type of environment?
Those of us who have lived through past events like this, you know, it's,
you know, you ride with the punches. If you're a new broker and you see this,
you think it's the end of the world. And, uh, you know,
it's tough to get, get beyond that. I mean, we, we spoke about recently at a,
at a conference that, uh, you know,
the new brokers don't know that this,
that there are cycles and this is just another business cycle.
Steve, could you give us tips about maneuvering this type of cycle?
What tips do you have
Now? Look into different niches. Uh,
if you get comfortable in a niche that lenders don't want to, uh,
don't want to partake in, you're gonna have to find another niche.
So defensively, you gotta always be looking at different niches.
Don't get comfortable in, in one, in one type of financing. In,
in one, one niche. Don't, don't do wall bowling alleys,
you know, because the bowling alleys, uh, go away, which they have,
you know, then you're stuck.
Any other tips on understanding funding sources and building a relationship with
funding sources? Any tips for that?
Invest in conventions. Visit funding sources, which, uh, a lot of, uh,
many brokers don't do.
They get on with the funding source and don't visit, and,
and if they go to conventions,
they only meet the top two or three people from that funding source.
They're representative, but on a daily basis,
they're dealing with the, with the person and credit,
they're dealing with the documentation people they're dealing with,
the funding people. Most of these people don't go,
don't generally go to conventions. If you show up and visit a funding source,
you're gonna meet all these people that, that are just voices over the phone.
And likewise for them, they get to meet you and, and understand,
you know, your, your abilities.
Steve, thank you so much for your time. Thank you. I appreciate it. Yeah,
thank you.