Loan and Lease Software: One size does not fit all
Equipment finance or asset-based financing companies provide an alternative financing to both business and consumer customers competing against and often having the edge over traditional lending sources such as banks and credit unions. Much of the growth and expansion of both goods producing and service companies is facilitated by a multitude of financing options available to them so that they can acquire capital equipment, hardware and even software in virtually all sectors of industry. In turn since these companies become the driving force in both the national and global economies through capital expenditure and investment.
In this very competitive finance industry, equipment finance companies must provide flexible, tailored and diverse financing products to their customers in order to earn their business. To do this successfully, they must take the time to really understand their customer's business and financing needs so that they can configure and structure a finance solution which meets the specific requirements of that customer. This approach is obviously more personalized and customized than the traditional lending source which often is restricted to a few industries and only limited types of assets.
Take a closer look at how finance companies describe their company, products and services and you will see the same adjectives used over and over, such as "Innovative", ‘Customized", "Tailored", ‘Flexible", "Creative", "Real" etc. The message seems clear in that even financing has become a custom business.
With this customized approach, comes a stronger demand for these very same equipment finance companies to acquire loan and lease software to help them manage their business more intelligently and effectively. The software must also be able to withstand the increased complexity and continue to evolve as their businesses change. The software must be able to offer flexibility and diversity in financing options available, provide detailed pricing and financing breakdown, maintain valuable customer and asset information, credit scores and much more.
As well as manage day-to-day servicing and tracking capability, the software's value comes from being able to obtain real-time critical feedback and analysis from the origination stage throughout the lending cycle to manage risk, identify trends in customer and/or product financing needs and forecast portfolio cash flows . They also need to provide a high level of customer service with accurate real-time data.
Many "off-the shelf" loan or lease management software packages tend to be modeled around the traditional financing options and may not offer the flexibility and diversity to provide the very much needed benefits of this customized and tailored financing approach.
Equipment finance companies need loan and lease software which can also be flexible, adaptable and be tailored to their very specific business data requirements, especially in the areas of customer and equipment profiles. For example, a consumer customer will have different data requirements than a business customer. If your finance business serves only one type of customer, then the software should conform to that customer profile only, and even have the ability to be tailored to revise or add data which may be of specific value to your lending business. Similarly with the vast range and types of equipment being financed, the software must be able to be customized to capture specific details depending on the type of asset being financed. The more complex and high value the asset, the more details required.
The saying ‘one size does not fit all' is as true of your equipment financing business as it is for the software that will help you manage your business and provide valuable insight into your specific lending activities.
Ryzn Enterprise Systems Inc, is a software and service provider of tailored software solutions designed specifically for asset-based financing companies.