When the application-only machine breaks down…

As a dealer, having a reliable application only funding source that can knock down those A+ to B- credits is great. Quick approvals, fundings, happy vendors/customers and hopefully…a stream paychecks. But, what happens when the application only players can’t help. FULL – FREAKING – DOC. Ugh. Chasing down tax returns, statements, oldest children’s DNA records. Ugh.  But, wait a minute…

What if the uglier credit situation wasn’t an “ugh” moment but a staple of your originations? After all, recent research indicates that following the 08/09 mess, 59% of all small business owners are C rated credits and below.

While the app-only machines are nice, what kind of dough are you making? You know why it’s hard to start a fast food restaurant? Low margin and the necessity for high volume. But more and more cities can tout their local successful steak place that charges $54 for the filet. I don’t care where you are buying the meat..$54 has profit that doesn’t require a sign that counts your millions of customers. A steady stream of asset-based challenged-credit deals as a defined part of your strategy will beef up your bottom line.

Also, isn’t the application only place where the most aggressive competition lives? In addition to impacting your ability to win deals, this ultimately impacts your deal flow. App-only dealer finance offerings require real volume for success and with increasing and crazy competition out there, dealers can be at a disadvantage compared to HUGECO commercial finance companies and banks. Where the app-only place doesn’t play, might just be the biggest opportunity for dealers.

We hear dealers say that business outside the app-only machine is too hard. First, most things that require more hustle provide greater return on investment. And none of us are in this to donate all our earnings to charity, so more profit is good. Second, any lender that makes any process hard, app-only or not, should find themselves at the bottom of your list. Working tougher deals shouldn’t be so tough.

If a business owner is not a clean credit, helping them improve might just be one of your best value propositions. Is a HUGECO dealership or VANILLA BANK OF THE NORTH gonna take the time to counsel someone help someone is a tough spot when they need the help the most? Of course not. They just sell another burger. You, however, are grilling steak…over time…with love and charging $54 for the filet because of the quality of your advice and counsel.

At Dakota, we are an asset-based equipment lender that can quickly solve challenged-credit problems. We take the deals the app-only machine spits out and turn them into valuable long term relationships for dealers. And we make the process simple, keeping you involved every step of the way. If you have a deal that just won’t fit an application only machine, has a few assets to work with and needs to get done, contact us today.