There are a few misconceptions around the difficulty and practicality of expanding or introducing wholesale finance ops. Whether it’s worth is usually the first concern!
You might be thinking…
“It’d involve too much staff training and additional resource to manage.”
We get it – hiring new staff to manage the expansion, or training existing staff, is an expensive, time-consuming investment.
However, with an efficient system in place, most of the time-consuming work is automated, so it takes little to no extra resource on your part. You can make use of exception-based processing, improved risk management, and better auditability – and a self-service portal, so anything that can’t be automated can still be done without having to contact the lender directly.
You’ll just need to make sure that you have a single person within your organization who understands wholesale finance. The beauty of the most innovative systems on the market is that they can manage the rest for you while leveraging your existing resources, whether you already have a limited wholesale finance client base or you’re diversifying your portfolio.
“My business isn’t big enough to look at providing wholesale finance. It would cost too much.”
Finding a scalable solution is key to managing growth – but this goes for smaller businesses, too. With this in mind, wholesale finance doesn’t need to cost the earth: the ideal system correlates directly to the volume and size of your business, be it large or still on its way there. There are options where you can pay according to what you use.
Whether you’re scaling up, looking to expand your offering for your current clients, or simply looking at how to broaden your horizons, offering wholesale finance – or upscaling its current iteration – could open new doors for you.
“We can’t compete with the big players in our area.”
The nature of national banks means that services, though broad, are often spread thin and come at a higher cost to the customer. Bells and whistles don’t appeal to everyone, so being able to offer a more local choice immediately puts you in a better position for service quality and convenience – and frequently, cost – to customers.
“We don’t need to look at providing wholesale finance. We have other products on offer.”
If banking services are in use within your operating areas, there’s already an opportunity, such as a car dealership, that would be able to utilize a wholesale credit line. Providing additional services to customers you already have is one of the easiest ways for you to increase your market share and profits. Wholesale finance can be managed just as rigorously as the rest of your products with the right software in place.
You may be already providing business lines of credit today that are being used for financing wholesale inventory assets. If you’re not already managing the credit with software that can track the line’s use at an asset level, this can open your organization to far greater risk.
So, what’s your next step?
Get in touch with one of our experts to find out where to start leveling up your finance operations today.