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Welcome to Portfolio Perspective: Managing Risk & Seizing Opportunity, a podcast focused on the asset-based lending industry. Join Andrew Pace, Chief Client Experience Officer at Asset Compliant Solutions, as he interviews experts, shares insights, and explores strategies for managing risk, optimizing portfolio performance, and seizing opportunities in an ever-evolving financial landscape. From regulatory changes to technological advances, each episode provides actionable takeaways and deep dives into industry trends. Whether you’re a lender, servicer, or recovery expert, this podcast offers valuable perspectives to enhance your approach and improve outcomes.
Conversion rates, when I first started, were in the 30 percentile. Last month, we were at 61% conversion on approved loans to funded loans, which is which is a new record for us. Our goal is 75%. We're doing the work for these deals to be on our books. Let's make sure we're doing that.
Andrew:Back to ACS Portfolio Perspective. I'm your host, Andrew Pace, Chief Client Experience Officer at ACS. Today, I'm joined by Eric Eddington, Chief Operating Officer at C. H. Brown Equipment Finance, a Platte Valley company based in Wheatland, Wyoming.
Andrew:Eric brings a unique and refreshing perspective to equipment finance with over a decade of experience in commercial and agricultural banking before stepping into the small ticket equipment finance world. Since joining C. H. Brown in May 2025, Eric has made a culture a cornerstone of the organization, doubled deal conversion rates, and helped drive the company to record breaking performance in 'twenty five and into 2026. He's also in the midst of a significant technology transformation, including system and AI driven document processing, all while leading a lean, high performing team.
Andrew:Eric, welcome to the show.
Erik:Thank you, Andrew. Happy to be here.
Andrew:So Eric, your path into a Kugger's finance is not a traditional one, and I think that outsider perspective is part of what makes your story so interesting. Let's start with your transition from banking into this business and what it was like seeing equipment finance through a fresh lens. So you came from a world where you understood everything in the building, every job. So what was it like walking into a business where, at least initially, you didn't know anything?
Erik:Yeah, intimidating and exciting all at the same time. In in the the leadership aspect side of it, walking into a building where people are coming to you with their problems or questions and being unsure how to answer, at least initially, was was the intimidating part. Prior in banking, if someone had a question, I've been in multiple roles, could jump in, show them how to do something, and help that way. The exciting part, though, was learning the process and actually being able to help from that perspective. Not knowing maybe how it was done in the past or why they did it that way was the exciting side, and able to jump in and basically solve the problem with them, instead of me just saying, This is how we do it, and go do it this way.
Andrew:Yeah, you know, you've said your instinct was to ask why things were done a certain way without assuming anything was broken. What did you discover by taking that approach?
Erik:Yeah, just the biggest reason was, this, that I learned quickly in this business, is it's extremely fast paced. In the banking world, you have your initial meeting, you gain financials. I mean, the turnaround time is nothing like in this equipment space. So by sitting in and asking why employees did stuff a certain way was strictly on an efficiency standpoint. Why do you do it this way?
Erik:Can we streamline this? Can it be faster? Or is this something that this is the process and this is how we have to do it? Not on the aspect that they were doing it incorrectly, just on the aspect of how do we make it better or more efficient.
Andrew:So what surprised you most about small ticket equipment finance compared to commercial banking? You mentioned a little earlier about whether it was pace, relationships, or even how the risk is even managed.
Erik:Pace, at first. This is pace. Risk. The risk though, I would say is probably coming from a commercial bank setting where a 1% past due is a big number. In this space, a 1% past due is a very good number.
Erik:So the risk side of it, obviously pricing is risk based, so there's a reason that we have that. There's a little more of a net interest margin on this side of the business than in the normal commercial banking side. But pace, I would say, is the number one difference, and the industry continues to push and push to become faster and faster. So that's probably our biggest focus.
Andrew:So the broker dependent model is nearly foreign to traditional banking. So what did that learning curve look like for you?
Erik:It's still relationship based. Instead of the relationship maybe with the customer, our relationship is with that broker. So big relationship person, I think basically just retraining that aspect of it. Technically, the customer is our end product. We're not out there going to get the customer.
Erik:The broker is our true customer, and then we gain a customer that we technically put on the books. But let's be honest, our perfect customer here at CHB, if everything goes as planned, we never speak to them, which is way different than the commercial banking. But yeah, so just strictly building that relationship with brokers as they're your sales team. They're out there doing bringing the business to you, the deeper and you can build that relationship with them, the better we're going to be here.
Andrew:So looking back, what did your banking background give you that someone who grew up entirely in equipment finance might not have had?
Erik:That's a good question. I would say understanding processes. In baking, are certain things that you do a certain way. So coming in and asking why things are done a certain way, I think was eye opening to me in whether we changed the process or enhanced the process. Great.
Andrew:So one of the most impressive parts, think, of your story is how quickly you moved the needle operationally, not by loosening standards, but by fixing some of the bottlenecks. So let's talk about conversion rates, speed, what it really takes to fund more deals with the same resources. So when you arrived, you were seeing hundreds of applications a month, strong approval numbers, but far fewer funded deals. What was happening to all of that approved volume?
Erik:Yeah, basically just sat out there and was kind of spinning. So that's been a focus, but let's be very clear that the team is the one that fixed conversion, not me. I just maybe put a little more emphasis on why it was there. Conversion rates when I first started were in the 30 percentile. Actually, last month in February, we were at 61 conversion on approved loans to funded loans, which is a new record for us.
Erik:Our goal is 75%. Strictly, basically using that model is we're doing the work for these deals to be on our books. Let's make sure we're doing it. And the way that we're able to do that is be very intentional with those approved deals. Why weren't they funded?
Erik:What happened? Whether that's more broker communication, whether that's strictly speed from pre credit to underwriting to funded. We found it's a mix of those things. But if we're backlogged in pre credit, we've brought in more team members to maybe help speed that process up. We're in the process of implementing a new LOS system, and then some AI software to help with the data entry side of that.
Erik:So just focusing on basically that, how do we become more efficient without begging more brokers to send us deals or expanding our credit box? We're we know what we know, and let's just become better at it. And then as time goes, yeah, if more brokers come on, that's great. If we expand our credit box into different collateral types, that's great too, but it's become efficient in what we're doing now.
Andrew:And you've described this as a more of like perhaps a timing problem rather than a credit problem. Why does speed matter so much in a broker driven environment?
Erik:Strictly, no response time, speed is Not coming from the small ticket equipment deal, I basically, when people ask what we do, I compare it to buying a car at a car dealership. You walk in, whether you're financing it, writing a check, whatever, you walk in and want to drive that car away. You don't want to come back a week later and pick up the car. Essentially, a lot of what we do is transportation, it's just commercial transportation. These guys don't want to wait a week to go pick up a truck.
Erik:If they're trading trucks, or getting a trailer, or whatever that may be, it needs to be a day or two process, and that's it.
Andrew:So the LOS implementation has been a big lever for you. What does a modern loan origination system unlock that your previous platform could not?
Erik:Two things. The current system, we're bank owned. The current system does not talk to the back end of the bank, so we have people doing data entry into the current system we're using, and then entering the same data into the bank system. So strictly software communication between systems is one. The second thing will just be the efficiencies.
Erik:The software and technology side of this business is drastically changing. I'm sure a year from now we could do the same podcasts and there would be something else out there that we're moving into because it is crazy how quick that is changing. But strictly efficiency and communication between system to system.
Andrew:And you've also introduced AI into document processing and data entry. How did you think about rolling that out in a way that built trust rather than fear internally?
Erik:Honestly, the staff was very eager to enter a new product. They knew the challenges with the current product. They knew the goal of where the company wanted to head, and they knew it was not going to happen without some changes. So I didn't have to do a lot of motivation staff wise to push into a new product, which is a huge help. Usually that's a big challenge, but staff here was ready for a change and knew that it was going to help them eventually once we got it implemented.
Andrew:And we talked before, you mentioned same day funding is still the goal. How close are you today, and what still needs to happen to get there?
Erik:So yeah, so I would tell you we're getting closer. There are a couple challenges with that, especially in the transportation sector side, as far as titling, making sure that we're perfected, those type of things. So is true same day funding fully realistic on all collateral types? No. No, it is not.
Erik:But there are some collateral types that we are able to do that. Strictly with that same day funding, I think it's broker education. If brokers know what our credit box is, know what we need to underwrite the deal, that drastically changes the speed and time of which a deal is sitting in our system. If we get everything upfront that we need, I mean, our decision time can be as basically as quick as we can get it through the system. If we're emailing them back and say, Hey, we need this, or, Hey, we need that, that's truly what slows this process down.
Erik:So broker education, I would say, is almost as important as the technology side. That way we're getting a full packet of what we need to make the decision instead of the communication going back and forth.
Andrew:And what are of those asset classes that you could potentially fund in a day?
Erik:So we do some yellow iron self construction equipment that would be non titled, strictly be an EFA that would be able to probably be a little quicker. Any of the titled stuff with perfection makes that a little bit tougher. The second challenge would be GPS. We do do some GPS tracking on some of that stuff. With GPS tracking, it would be difficult to have GPS obviously installed same day do that as we have some dealerships that we partnered with with GPS, some brokers that we've actually partnered with with GPS that install it, but most of the time it's a third party performing that service for us.
Andrew:Thank you, thank you. So let's shift into managing a transportation heavy portfolio. So operational efficiency is only half the battle, the other half is navigating risk, especially when a large portion of your portfolio sits in a volatile asset class. The next couple of questions, we'll talk about transportation and how C. H.
Andrew:Brown has managed through those challenging cycles. So you've been transportation focused for over thirty years. What makes that asset class attractive and challenging for a lender like you guys?
Erik:Attractive is pricing. As we are bank owned, is definitely a higher risk business than normal bank portfolio. But it's also been something that we're good at and what we know. The ag and transportation industry is kind of what built C. H.
Erik:Brown to start, and we didn't want to lose sight of what got us where we are. Yes, of course, we want to continue to grow, and whether that means new asset classes or whatever, that is all well and good, but we want to also continue to be good at what we know.
Andrew:So, you know, with over the road trucking, it's been difficult. How has C. H. Brown managed delinquencies and volatility during that difficult time period in the transportation space?
Erik:Right, yeah. So as everyone knows, two years ago transportation was tough, tough, tough, and there was a lot of people that exited the industry strictly because of how tough it got. With that being said, we've implemented some stuff internally and externally with other partnerships such as yourself on how to mitigate some of that risk, whether that's some underwriting standards being changed, whether that's our collection process being a little more aggressive. All of those things combined kind of is how we're mitigating the risk of the transportation of that industry. But as much as it can be a struggle, it can also be extremely good business.
Erik:Another area we focus is smaller businesses. We don't have a lot of big fleet customers, 5,100 fleet customers. We have a lot of single truck to 10 truck owners. So we've kind of stayed in that smaller business cycle. We don't have as much risk with drivers that way.
Erik:It's more of a smaller business, so these guys know the drivers. It's not a huge company that's putting 100 drivers in seats. So I think that's also helped our portfolio as well, more small business mindset helping these guys go from one to two trucks, or two to three, and set up 50 to 100 trucks.
Andrew:Sure. Share with us what the strategic thinking was, that you guys chose to stay in transportation where others exited entirely. Can you talk a little bit about that decision?
Erik:Yeah. Reason to stay in is it's truly what got us here. That's the as much as we're excited about the future, the past can teach you some lessons too. So when you look at a ten year number for this place, yes, 2024 was very difficult, but 2025 was a record funding year for us in the same space, same industry. And 2026, we're continuing into that.
Erik:With that also being said, if you look at the ten year picture of this place, transportation has drastically been a large contributor to income numbers since existence. We're celebrating thirty one years of business this year. Thirty years Platte Valley companies is thirty years, we're thirty one. The banks owned us since 2008. So basically refining what we know and being good at what we know, we know that there's risk involved, and basically just trying to help the transportation industry continue to succeed, because they've helped us succeed for thirty one years.
Andrew:No, that's great, there's that symbiotic relationship that you have. So you've actually picked up business as others pulled back. How do you think about pricing risk when conditions can change so quickly?
Erik:Yeah. So strictly, we're in a very unique economic condition, I
Andrew:would
Erik:say. Past due numbers, we drastically look at that. As past due numbers rise, we try to tighten our credit box, whether that be more down or restrict assets or whatever that may be. But a lot of it is truly how the business is run and if we think it's a fit for our credit box. So I have a great team here that has lots of industry experience, that's basically able to talk through with a broker, Does this customer fit what we're trying to do here?
Erik:So with people exiting, we've had some opportunity to increase some of that, to be honest, the majority of it is we're roughly receiving the same applications we were two, three, four, five years ago. We've just become more efficient in the process.
Andrew:Thank you. And you touched out a little bit, so beyond trucking, what other collateral types are meaningful in your portfolio today, and where are you actively leaning in or pulling back?
Erik:Yeah, so trucking, over the road trucking, and trailers are probably 50% of our business that we do here. In the transportation world, we also do some other stuff related to trucking. We have some towing stuff. We have some waste stuff such as hook trucks or trash trucks, which technically fall into that transportation area, but we've seen they're drastically different assets as far as it's a way more competitive market. We have to be a little more aggressive with the rate.
Erik:But with that being said, there's a little less risk because they're cash flow heavy business. So we're expanding into those areas. Our Yellow Iron program construction equipment has definitely been a large contributor as we continue to diversify this portfolio. I would say it's 15% to 20% of what we do. Lots of smaller business construction stuff, skid loaders, small telehandlers, mini Xs, stuff like that, landscaping type like companies.
Erik:So that's been another piece of really good business. And then we, in the last couple of years, we expanded into small piston driven aircraft. Commercial use only, but it has been a very, very interesting market. We kind of found a niche market. Our average ticket size for that would be $150,000 up to kind of a million bucks.
Erik:We feel like there's not a lot of people in that space, so it's kind of it's been a really good market for us to be in, and historically, it's performed very well, even the small time we've been in it. So those are kind of where we're at. I would tell you that we do anything and everything as there's another 10% out there that is completely randomized from software to, I mean, all sorts of different equipment as you've been in this space a long time. There's always someone looking to figure out a way, and if we think the business is going to be good, we're willing to look at it.
Andrew:So you write in 49 states while operating from Wheeling, Wyoming. How do you manage a national broker based portfolio with a relatively small team?
Erik:Yeah, so 26 people in building today, writing in 49 states. We used to write in all 50. California changed some licensing requirements. So for the last two years, we have not done any new loans in California, but managing basically broker relationships is how we continue to have a national presence. A lot of that is broker driven through broker to broker relations as that broker community is very tight knit.
Erik:They might come across collateral class that we do, talk to another broker, and a lot of our businesses broker referred from another broker. So basically managing that broker relationship to deepen those relationships is in turn what gives us more and more business.
Andrew:Great, thank you. So we've talked about operations, risk, growth. What really ties this together is leadership and culture, which you've been very intentional about since day one. I want to close by digging into how you think about building teams and what that equipment finance community means to you. So you've said culture was your top priority, even before you fully understood the business.
Andrew:Why did you choose to lead with that?
Erik:Yeah, I think culture is super important. It's not only important in this business, but it's important to the bank as well. Look, we're in office, everyone at C. H. Brown is in office every day, so we're spending a lot of time with all associates in building.
Erik:So if you don't like coming to work, you're not going to continue to be here. So I thought that that needed to be emphasized as I spend a lot of my time with these guys, and they spend a lot of their time with me. So we focus on that strictly because of the time we spend together. And if you like your job, stay at your job. Turnover is as much a business risk as any, costs a lot of money to train people.
Erik:So we've really focused on building the team together, and that has kind of been one of my main focuses.
Andrew:That's awesome. So you still meet one on one monthly with all 26 employees?
Erik:Not monthly. Very open door policy, though. I would say that we can meet whenever. I met one on one with everyone when I started strictly to understand what they do. Mhmm.
Erik:Then as far as that goes, we still have a staff meeting every Monday where everyone one goes to, but yeah, one on one, not as much as at the beginning, but would still do it if I have a question about a certain area.
Andrew:And you talked about how expensive training is, and let's talk a little bit more about how turnover has reversed under your leadership. What do you think changed most materially for the team?
Erik:Communication. Allowing an easier way to communicate between teams. Obviously, we have our production team, we have our lending and underwriting team, and then we have kind of a collection team. It was very siloed prior to me, and let's be honest, this business works with all of us working together. So just kind of breaking some of those communication and silos down, making everyone understand that we're one team first, and then, yes, you might work in production or underwriting or lending or whatever, but CHP is one team before we are different departments.
Andrew:So you use personality testing across the organization. How does that actually show up in day to day collaboration with your team?
Erik:Yeah, so this was partly bank driven as the bank continues to enhance employees' growth, all those things. HR actually implemented the CliftonStrengths. So everyone company wide now, over 400 associates, take the CliftonStrengths test, and
Andrew:then
Erik:you go over it with your department and then with your whole team. So it just kind of fit because it was kind of me starting and it was new, but it also helps you understand how you can talk to someone. If you have someone that comes in every day and closes their door and gets straight to work and does that, they're not maybe the person that wants to hear about your weekend or do that, but you can be way more direct with an assignment or something. But if you have someone that wants to have the first two minutes be very casual and very conversational, it's easier to be more productive with how you assign things and how you approach them as an employee strictly because you understand them on a deeper level.
Andrew:So what would be what would be your top five Clifton strengths?
Erik:So competitor was my number one strength. Very competitive. We do our financials against all branches. CHB is basically treated as another branch. So I'm very competitive in those numbers.
Erik:Positivity was another one of my strengths. I'm a very positive person and think that that also helps with culture and all things. Woo was another one of my strengths. It says people that are exceptionally talented in Woo love a challenge of meeting new people and winning them over, which I did. Basically coming here, knew a few of the associates, but had to get to know the team, and and they had to get to know me and see where my leadership direction was gonna take us.
Erik:Communication was one. I like to talk maybe too much sometimes, but I think that's super important, obviously, on the team aspect. The more that you communicate, the more that people understand, the better off you as an organization are going to be. And then relator was my last strength. So basically me being able to relate to maybe a challenge or something positive that happened to encourage.
Erik:So those were my five.
Andrew:Nice. Well, we a few. It's probably been ten, fifteen years since I've done a Clifton, a Clifton Strength Finder assessment. I know Wu, Achiever, for me, were two of my top teams. It was a great exercise to go through.
Andrew:Mentor that I worked with during that time period, that I met with once a month, used an example of Tiger Woods. Hitting out of the sand wasn't a strength of his, so why would he go practice, spend hours and hours a day trying to learn how to get better at hitting out of the sand when that's just, he's never going to be better than what he is, right? So what is he good at though? He's great at hitting his driver. That's one of his strengths.
Andrew:So work on being more accurate with your drivers so you don't end up in the bunker, right? To bring that golf analogy into our discussion. So before we wrap up, just a couple more questions. If you could give one piece of advice to a COO or senior leader in equipment finance about building a high performing team, what would it be?
Erik:Listen to the team. Strictly on how I came into this business, I relied heavily on the team to give me the knowledge to try to help make some of those decisions on where we're headed. So listening to the people that are actually sitting there doing the day to day job drastically changes on the decision making process for how efficient you can make that team. I try to truly understand what they do to improve how they do it. If I don't know what they're doing every day and how they're using the technology or the system, me making a decision and what LOS to go with or what data entry we need to change, basically does nothing except maybe add to their plate instead of enhance or make them more efficient.
Andrew:Thank you. And you mentioned that the equipment finance industry feels more open and collaborative in banking. What does that community mean to you now?
Erik:Yeah, so now that I feel like I've got to know a few people through the conferences, through brokers, through these relationships that you build, it is drastically different and way more open. Even other funding sources, there's stuff that we do that some other funding sources don't do or do do. So there's almost a referral basis back and forth between funding, between brokers, between all sorts of different people in this community. So that part has been extremely eye opening. The commercial and ag banking world, we all offer the same products.
Erik:So it's always competition. It's always kind of you either go here or here. But but in this in this equipment finance world, there's so so much diversity that we all kinda have our own piece of the pie.
Andrew:Alright. So let's get to the fun part of the of our discussion today. Let's debate it. Scramble format versus match play in golf. Two different ways to play the same game, two different philosophies about what a route's supposed to be.
Andrew:What's your preference?
Erik:So preference personally is match play, but I think that comes into a handicap scenario on what your level of golf is. So I think the better you are at golf, the more likely you are to wanna play your own ball. As if you're not as advanced, it's it's easier to get around the course with two or three or four of your buddies all hitting shots. I'll I'll for the sake of
Andrew:the argument, I'll take the scramble side. I I I agree as as my game has improved over the years. I obviously enjoy match play. Scramble is to me about the experience, where match play is more about individual result. It's fun.
Andrew:It's a little bit more loose. You hit a bad shot, it's not going to ruin the hole because you got three other guys that you can rely on that can put a good ball in play or that can put one on the green, so that part I like just in case you happen to be off that day. It's to not impact your handicap or anything like that. You're competing against other teams. It's not just one person.
Andrew:It's a team effort. It's kind of like a relay, right? It's like a relay. Everyone has their job versus a sprint, right? So that's my take on the scramble side.
Andrew:You mentioned something earlier about a big match point event that you have.
Erik:Yeah. So this is year five. We call it the Cowboy Derby. So I kind of bring in all aspects of the argument. So it started as a true match play event.
Erik:Year one, we had 10 flights, 40 teams, four teams a flight, and you played a nine hole match against everyone in your your flight. We were basically flighted by team handicap. So flight one, I think the first year I had a plus three team, all the way to flight 10, which was a 72 handicap team, both 36 max out handicaps. Fun part about it is basically you're kind of playing like golfers your flight, but then we do a horse race at the end where we bring all flights together, and it's an alternate shot. But it's fully handicapped.
Erik:So if you were a flight ten winner, you're probably getting two strokes a hole, and if you're a flight one winner, you're playing straight up. So it's become something bigger than we ever thought it would be. Our goal was to help youth golf in small town Wheatland, Wyoming, and we have a ton of support from local business that has greatly exceeded our expectations. We've raised over $20,000 in the first four years of this tournament. All proceeds go to youth golf from our high school team, all the way down to small youth golf tournament that we put on at no cost to the kids.
Erik:So, yeah, the match play format is how it got started, but year five, we are modifying that a little bit. My first 10 flights will be match play, but flight eleven and twelve, due to handicap, they're actually going to scramble as a team. And then when they get to their horse race, they will play alternate shot, but strictly for a pace of play and keep them interested. We found that it's a lot harder for a 10 or 11 on a score. It's a lot more fun to play bogey golf in a scramble than it is shoot a 10 and that may be winning a hole.
Erik:So we're modifying it for the first year for those two higher flights to see if that that helps. So
Andrew:Awesome. Well, I it's great that, you know, you're giving you found something you enjoy to do, and obviously benefit from that is for a great cause, youth sports. If you have any room, send me the dates. Perhaps I could make it out. I'd love to participate.
Erik:Yeah, we'll talk more about that. This year, we filled up So the first year, I felt like we had to kind of beg participants to happen, but we put it out on Facebook and our website this year, and we have 12 flights, which is the most flights I've ever done, and we filled up in about seven days. So it's been which is kudos to my wife, she does a lot of the work, but it's really cool that we've had that much success in a short time. But definitely, I'll get you some information, and we'll see if we can get you out to Wheatland.
Andrew:For sure, absolutely. So Eric, this has been a fantastic conversation. You've brought a thoughtful, practical perspective on leadership, operations, and growth that I think will resonate with lenders and brokers alike. To me, what stands out most is how intentional you've been about culture and process, proving that performance is often the result of how people work together, not just how fast a system can run. So thank you so much for joining us and sharing your experience with the ACS and Equipment Finance community.
Andrew:And to everyone listening, thank you for tuning in to the ACS Portfolio Perspective. If you found value in today's episode, please subscribe and share it with someone in your network. We look forward to continuing the conversation next time.