As we open this month’s State of the Industry report on in-house leasing, one of the most popular talking points among our panel of dealers was the need to provide those end-users who were hardest hit by the pandemic—read: the most cash-strapped—with options to navigate their leasing agreements without defaulting on the terms of the contract.
While our panel is but a small sample size, most dealers reported that the incidence of end-users seeking relief was minor relative to the size of their leasing portfolios. But for those clients who found themselves in dire circumstances, the ability to reconfigure their agreements was no small consideration, and it further solidified the relationships they enjoy with their dealer partners.
Jim Dotter, president of Virginia Business Systems (VBS), noted the greatest challenge was the open-ended nature of the shutdown and the lack of certainty regarding the return to normal business operations. VBS strategized with its leasing partners and internal arm to provide flexible terms and offered refinancing to extend leases and reduce monthly payments for clients with remote and hybrid work scenarios.
“Our leadership team met daily, considering the ever-changing guidance provided by the CDC and state/local governments to navigate the constant changes,” he said. “Our goal was to be responsible, empathetic and level-headed. Our employees and customers appreciated that along with our open and frequent communication. We leaned on our core values and it helped guide us through the pandemic.”
Greater Autonomy
Nashville, Tennessee-based RJ Young did its best to accommodate customer requests within reason, said AJ Baggott, company COO. The advantage of having its own leasing portfolio enabled the dealer to act at its own discretion.
“We were pleasantly surprised at how few customers actually requested this or were willing to take a three-to-six-month deferral in exchange for adding 12 months to the end of the contract,” Baggott remarked. “We were very fortunate that we were able to help so many of our customers through a difficult time, and I believe we will reap those rewards for years to come.”
A dealer’s attitude toward customer service permeates every aspect of a client relationship. In the case of Madison, Wisconsin-based Gordon Flesch Company and its GFC Leasing arm, only about 5% of clients requested some form of relief during the pandemic, notes Jennifer Watts, manager of leasing operations. As in the case of RJ Young, having an independent portfolio provides greater flexibility than might be experienced in going through a third-party lessor.
Having that autonomy enables the dealer to take a big-picture perspective. “Because we’re not interested in a quick profit, our interests and our customers’ interests are aligned for long-term solutions, and we can usually come to an agreement on how to move forward quickly,” Watts noted.
Dash of Empathy
Down in Greenville, South Carolina, where the pandemic shutdowns were not nearly as draconian as in the northern and western states, Plus Inc. saw a relatively sparse level of forgiveness requests—less than a dozen, according to President David Carson. In most cases, the dealer offered 90 days to six months of payment suspensions through its Piedmont Leasing division.
Carson was nothing if not empathetic. After all, virtually coinciding with the start of the pandemic was Plus’ acquisition of a small competitor. His own bank was getting extremely nervous about backing the deal, and in the back of Carson’s mind, he was concerned about the prospect of having to lay off newly-acquired employees. But with a little cajoling at the bank and support in the form of Paycheck Protection Program resources, Carson was able to complete the deal, remain operational and keep team members gainfully employed.
“It was everything we could have hoped for happening in a positive way,” he said. “We were very fortunate. Our business grew 20% in 2021.”
