Want Easier Access To Capital? You Got It!

The Treasury Department released a report today (7/31/18) with 80 recommendations that are aimed at tailoring regulations for non-bank financial institutions and encouraging the development of financial technology.”   

“Creating a regulatory environment that supports responsible innovation is crucial for economic growth and success, particularly in the financial sector,” Treasury Secretary Steven Mnuchin said in a statement. The WSJ reported that Mick Mulvaney, the outgoing director of the CFPB, hopes to create a “regulatory sandbox” to help fintech companies create new products.  

  1. How does Clune differ from their “Non-Bank” Competition?
  2. What are the advantages and disadvantages of these recommendations? 
  3. Will this affect the lease finance services our company provides? 

Clune & Company counts itself as a “Non-bank” lender who provides lease financing services in the capital equipment sector for both vendors and leasing customers.  As such, we are only secured by the collateral that is being financed on the lease contract as opposed to a cash loan that may be secured by a blanket lien on all of the assets of the debtor.

Just like a cash purchase, a capital lease also qualifies for the Section 179 Tax Bonus.  We differentiate ourselves from other lessors in many other ways, however, culminating in a lower total cost. 

Overall, easier access to capital is a positive force in the growth of our economy, as it will allow entrepreneurs to start and expand businesses, hire employees, and contribute to the tax base. This is welcome news to many businesses who could not easily access capital. 

This environment might unleash new “fintech” services that will build instant decisioning tools that are more reliable indicators of a customer’s creditworthiness. As a result, consumers may have more lenders offering them credit but with different terms and conditions.     

Since our guiding philosophy is to “self-regulate” ourselves in a largely unregulated industry, Clune will not be greatly affected by the relaxation of the regulations. Unlike many creditors, our Company services their own portfolio and thus has a vested interest in assessing the creditworthiness of our customers. We feel our leasing customers benefit from this business model as it enables them to obtain a quick and personal answer to any questions concerning their lease contract(s).  

In an effort to provide more efficient services, we will be watching for innovations in the credit decisioning process that enhances our ability to be more responsive, without sacrificing quality. We look forward to competing for your business.  

Kevin F. Clune, CLFP
Clune & Company LC