Can a "Too Big to Fail" Leasing Company deliver quality service?
Kevin F. Clune, CLFP
Following the 2008 financial crisis, General Electric Capital Corporation (G.E.C.C.) was designated as a systemically important financial institution (SIFI). A SIFI is a bank, insurance company, or other financial institution whose failure could trigger a financial crisis.
Why is this information relevant 8 years later?
In an effort to reduce its’ size and try to shed their SIFI status, G.E. recently sold a $32 Billion portion of their $400 Billion financial services business, to Wells Fargo Bank, in the first quarter of 2016. This segment of G.E. included their lease finance services.
What impact does this sale have on your company?
Surprisingly, this division of G.E.C.C. operated in every facet of the leasing industry and was actually a competitor of our Company and many other lease finance services across the country. They were always the 800 lb. gorilla in the corner that was impossible to ignore. Whether you are an equipment dealer or a leasing customer, you have probably been introduced to G.E.C.C. as a potential source of financing for your customers or your business.
To gain market share, closely held lease & loan financial service companies such as Clune & Company distinguished themselves from G.E.C.C., and other similar companies, with enhanced sales support services, customized & transparent contracts, and accessible & professional human contact. While many valued these benefits, G.E.C.C. was a household brand which was able to attract customers with state of the art technology and lower monthly payments, despite the imposition of surprise fees and onerous return conditions.
Is your business a former G.E.C.C. customer or are you partnered with a similar provider? If faced with a choice between a “G.E.C.C.” or an alternative as described above, which would better serve your needs and also ensure customer retention for vendors?
Could “Too Big to Fail” also be “Too Big to Care”?
There are no guarantees or bail outs for companies that aren’t designated as a SIFI. Wouldn’t a creditor that is more prone to be adversely affected by the loss or failure of a customer be more likely to provide the quality service and support necessary for success?
To paraphrase a well-known credit card commercial that asks “What is in your wallet?”, we ask, ”Who is your lease partner?”
Let us know if we can serve you,
Kevin F. Clune CLFP
Clune & Company
