Your lenders are just as much your bread and butter as your customers are…even more so. If you treat your lenders like I treat my ex-wife (this is the car business, most of us have one or two) then you have no reason to complain when they don’t want your business. That’s right Lenders will get to the point where they no longer want your business. We have to treat our lenders with respect and responsibility on our part. If you want them to be there for the long term, act like it. This week my assistant and I are taking our annual Christmas trip to our lenders offices. We take a day and travel to visit all of our lenders. We will greet them with a bottle of nice wine for Christmas. Our top lender, Transouth, will receive a nice bottle of champagne and champagne glasses and the branch manager will receive his bottle of Dom Per ion. It is not always necessary for your lenders to come take you out to lunch, try taking them out to lunch occasionally.
It goes beyond that however. We request a portfolio report from our lenders each month. We want to know if there is a problem in advance. We want to know if we need to focus on more “B” paper to help offset the costs of the “D” paper. Our finance department has a monthly meeting to review our reports and we take it very seriously. The lenders love the fact that we are just as concerned with the performance of our paper as they are. We ask our lenders what their expectations are, what is good, what is average and what is unacceptable and we will work with the lenders to make sure we stay above par. We have even been known to call customers in conjunction with our lenders to help in collection efforts. Portfolio reviews should be an essential part of your Special finance plan.
Take it seriously and don’t take your lenders for granted. They may not always be there. I think instead of asking who is buying that paper under 475 without a big discount, we should be asking our lenders what we can do on the other end of the spectrum to make this deal make more sense to them. What can I do to make sure the lender will be here next year to buy the same way they are buying for me today? A little—no a lot of consistency is needed in our industry, but it starts with us.