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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.
There's a difference between betting vetting the broker and betting a transaction.
The transaction betting is easy.
What are the what are their revenues?
Are they profitable and do they debt service?
Right?
Those are kind of three initial criteria right out of the gate.
Welcome back to ACS Portfolio Perspective.
I'm your host, Andrew Pace, Chief Client Experience Officer at ACS.
I'm joined today with a from a longtime friend and colleague in the equipment finance
world, Bruce Brandon, Vice President of Indirect Business Development and Training at TCS
Equipment Finance.
Bruce is a 25 year veteran of equipment and leasing and finance industry with deep
experience across sales leadership, capital markets, syndication, and broker channel
development.
He's held leadership roles in Onset Financial, Pacific Western Bank, Marquette Equipment
Finance, and Bank Financial in Chicago, generating well over $100 million in new business
throughout his career.
At TCS, Bruce oversees national indirect business development through brokers, vendors,
and manufacturers while also leading new salesperson training across the organization.
He also holds dual bachelor's degrees in finance and real estate from Cal State
Northridge.
Bruce,
Welcome to the show.
How you doing?
How you doing, Andrew?
Good to see you as always.
Uh, great, great seeing you as well.
Thank you again for uh agreeing to join us on on the podcast.
you know, with that background, you've spent a lot of time sitting at the intersection of
brokers, credit, and capital.
I want to start with how you think about the broker desk at TCS and why the middle markets
is such a a deliberate focus for you.
Can you walk us through your role at TCS and what
overseeing national and direct business development actually looks like day to day?
Well, my two roles are are kind of related.
I think that when TCS brought me on here, they I I know the owner.
We've worked together for more than twenty years.
I know a couple of the managers here that we worked together for more than twenty years.
And they thought from a sales perspective that I was the perfect person to come help them
integrate new salespeople into their organization.
And so from a sales perspective, it's what I've done my almost my entire career.
So I'm good at that.
And so they brought me on to help train some of the new salespeople.
And that is as simple as that.
I am the trainer of the new salespeople that we hire to help them get out into the world
and and and get new lease business on behalf of TCS.
The second half of that is the broker side, which is why
We're probably here.
And as a independent middle market les source, there we're we're finding and we've found
that there are a lot of opportunities out there that brokers run into on a annual basis
that fall outside of what their typical category is themselves and fall into our category,
which is that $300,000 to $30 million route middle market.
And
So I run that effort on behalf of TCS.
I'm not in sales outbound.
I work with brokers to help them get their middle market opportunities approved whenever
they have them.
Thank you.
So TCS focuses heavily on the, as you just mentioned, $300,000 to $30 million middle
market range.
Why is that sweet spot so important, particularly for the broker community?
Well, it's important because a lot of times the there's a
Those type of transactions are the type of transactions that small to medium size, maybe
even mid sized companies will will have.
Um and when you get into the really large corporations, those are investment grade,
audited financial type companies where brokers, a broker solution may be too expensive
because they have lower pricing options all around them.
where it kind of cuts brokers out of that marketplace.
In this marketplace, there are there are companies that brokers run into based on their
vendor relationships that happen to be decent companies that have a a relatively large
type of opportunity and the vendor might need some help getting that product moved with
financing.
So they lean on their broker relationships to get those done.
However, if it's in the middle market category, it's not
normal for them to have those types of transactions that they do on a annual basis.
And so we're there to help in that area.
You said before that most small ticket brokers run into three, four larger transactions a
year.
How how does TCS position itself to help brokers successfully get get those deals done?
Like I said before, the the the the efforts
That they go through on an annual basis, the relationships with either their customers or
their vendors.
You know, you they're they're doing small ticket transactions, but every now and then
they'll get asked, hey, we've got this customer that's buying a $700,000 machine.
Can you help us?
And when I meet with these brokers, they always say to me, gosh, you know, every year I
get a a request that when they ask me.
And it's a million dollars.
I don't know what to do.
Thank goodness for you, Bruce.
Because we've been looking for someone like you to help fund those types of transactions.
So hopefully to answer your question is we hopefully we we want to help them in that space
because they're not that educated as it relates to full underwriting.
When you get to large transactions like that, it's no longer credit app and paydex.
And 24-hour turnaround.
You're just not going to get that on a million-dollar deal.
So it's audited financial statements, it's reviewed financial statements.
It could be tax returns with the accountants' compilation, but it's more complicated.
We use terms like underwriting and debt service coverage ratio and things like that that
these companies need to qualify for before they're ultimately approved.
So instead of 24-hour turnaround on an app only basis.
We're gonna be a week out for you know good credits and maybe even longer if all we're
getting as tax returns.
Thank you.
Thank you.
You spend a lot of time building relationships at industry events like NIFA and AACFB.
Why does face to face interaction still matter so much in broker relationships today?
Because I'm better looking than my competitors.
Very true.
oh
Yeah, I I've learned by going to these these conventions that there is a uh a big time
camaraderie that I didn't grow up with in this business.
I came from the realm that we did everything, ninety nine point nine percent everything we
we've done in my twenty plus years of experience has been over the phone.
This has been intangible product that we have that I've sold and that have done well with.
I know people that have
made lots of money and have great careers doing this intangible business.
But these conventions, I can tell that there's a certain camaraderie that adds an element
that we are leaning heavy into.
And that is the face to face contact.
you know, the things that you're doing, golfing.
I don't golf, but those events that that face the the interaction, I see it in you, and I
envy the relationships that you have with some of these other people that that you've
established over the years because they trust you and they go to you.
And what happens with the face to face is the trust aspect.
You get to know them, um, they become your friends.
And so all of a sudden the element of who should I go to if I get a a larger transaction
kind of disappears if Bruce is your buddy or Bruce is your pal, or you know Bruce and you
liked him in person when you met him at a uh in New Orleans or Chicago.
And if I can reduce the element of being unsure as to who you might call, then that
benefits me and it benefits TCS by attending these events.
Or or in our case, Charlotte.
You know, that's that's where you and I met.
We met at a um we met at a first timers um, you know, networking event at the NIFA
Charlotte, which was the very first in-person event coming out of the pandemic.
And we actually happen to be standing in line.
I I think I was talking to a colleague of yours that uh happened to be from from Rochester
and we obviously both um you know, both had a you know, love for the Bills and uh she
introduced me to you, uh, and and obviously we hit it off 'cause we both had something in
common.
We both were really passionate about our football teams, you being the Vikings and and me
being the Bills and we shared some misery there because both our teams are
yet to win win a Super Bowl.
So well let's you know that gives a picture of how brokers fit in the middle uh market
strategy at TCS.
Of course, broker source volume can be incredibly valuable, but it also requires requires
discipline on the credit side.
So let's talk about how you think about vetting deals and managing credit quality.
So what is the reality of broker source deal flow today, especially when it comes to
seeing transactions that have been declined elsewhere?
It's funny you mentioned that because I had just gotten out of a meeting with our
president last week and I had to just tell him like, Look, this is my world.
And we're talking about just all of the the headaches and the quirky aspects of dealing
with these types of transactions.
Granted, brokers run into situations that aren't that marketable in the normal aspects of
getting deals done.
Credit is usually strange.
There's a lot of startups.
There's a lot of changes in the business environment.
Usually it it can also be quirky equipment.
That's not normal that banks hate.
And so a lot of the broker deals are full of of hair and full of just the most i in
incredible quirks that I I could I mean, we'd be on the phone for three hours if I can
just run stories by you about the stuff that we have to deal with.
And a lot of it is is headaches.
You know, it's a lot of headaches.
And it's like, what now?
Every day, every twice a week.
It's like, what now?
What now?
That's my world.
And we get through it.
And consequently, the brokers make good points because I think the customer also
understands that they're asking us, they're reaching out to us to see if you have the
ability to get my deal done based on these tax returns that I'm giving you.
And and the transitions that my company has made in the past two years, uh, positive or
negative.
There's just a lot of things that go on.
So that's just one aspect of the credit at part of the transaction of our transactions.
The other part is the educational side from what brokers are used to compared to what
they're not used to.
And so not only do they need someone to come in that has
Experience doing middle sized or middle market type transactions, what they're not that
used to is getting audited financials, reviewed financials, or asking those questions
because they're used to a credit profile that's just paydex and credit score.
They submit that to an Apple only source, they process it, and they get an approval back
in 24 hours.
So imagine you're a broker.
Who has no experience doing middle market transactions, and I'm asking them for a list of
these things that they're not accustomed to.
And it makes them kind of nervous, but that's why they use us, because we know what it
takes.
But at the same time, they may have issues getting that information from their sources.
Because a lot of times they're going through their vendors and their vendors don't know.
Right.
Their vendors their vendors don't even have a relationship with the financial decision
makers.
The vendors are usually talking to the operation manager.
So after so imagine the broker dealing with the vendor and he has to ask the vendor to get
the audited financials from the CFO.
And the vendor's like, Holy cow, we don't even know who the CFO is.
Right.
It's just all day.
Just stuff like that that we deal with on the credit side.
But I don't know if that gets into your answer.
But there's a lot I can get into in that question.
For sure.
And there'll there'll be more time that we can we can unpack some more of that.
Um yeah, how quickly how do you quickly vet both the broker and the transaction so you can
you can get to a yes or no before too much time and energy is invested in that in that?
It's it's there's a difference between betting vetting the broker and betting a
transaction.
The transaction vetting is easy.
What are the what are their revenues?
Are they profitable and do they debt service?
Right?
Those are kind of three initial criteria right out of the gate.
You know, what how big is the transaction?
Okay, so it's $800,000.
Great.
Do what do you what can you tell me about the equipment?
What is this project?
Okay, great.
do you know that they're profitable?
How big is the company?
Well, they made the million dollars for the first time last year.
They're like, well.
I'm not sure if that's going to work for us.
But I can still look at it and and see what's going on.
Because if it's there there are legitimate million dollar companies that'll make a million
dollars forever, because there may be a a regional hospital.
Those revenues are never going to grow more than that.
But they're profitable for the past ten years.
So there may be hope there.
Um but otherwise a company that makes a million dollars may be too small to justify an
eight hundred thousand dollar deal.
So I can ask the broker, what are their revenues?
10 million.
Okay, check there, right?
Do you know if they're profitable?
yeah.
They're they've been making money, handover fish.
They're growing.
And now they need this new machine.
And my vendor contact gave me this lead.
And he's nervous because he knows they're good credit.
So that's quick.
Now vetting the broker, we have a onboarding process.
that before we pay any commissions to a broker, we have them fill out what we call as a
broker application.
And there's a whole vetting and onboarding process that takes up takes place behind the
scenes.
They fill out a W nine, uh they give us all of their or if they can, financial
information.
And we just want to make sure the broker is not on any type of negative list that may be
out there.
And that's our internal vetting process on the broker.
So it's different.
than credit for a company.
And so there that that those two processes are entirely different.
Thank you.
I appreciate that.
Can you talk about the spectrum of the financial statements you mentioned, you know,
audited, uh reviewed, down to compiled, and why that distinction matters so much in full
underwriting?
Good question.
Audited, obviously being the best, means that an accounting firm has been hired and this
company is probably paid a pretty penny.
To have an accounting firm come in and lift the veil of everything that has to do with the
company financially.
They've come in, they've run tests on the information that they s they found in the
financial statements to make sure that everything is up to snuff.
And then they'll sign off on it on the front page of the financial statements.
At the first page, it's the audit.
We have
audited these financial statements and represent that X, Y, and Z has happened or hasn't
happened, and we verify these numbers based on our reputation.
That's what a an an an a review or or an auditor's page would say.
Now a review is exactly what it sounds like.
We have reviewed the information.
Now as it relates to what a company will pay for that an audit
Let's say you pay 20 grand for an audit.
A review might cost 12 grand, right?
And a compilation might cost five grand in terms of how detailed they get in.
A review, I've I've seen reviews.
I mean an audit, I've seen review audits where an accounting firm brings in a team from
Tennessee, they bring in seven people, and they live in your building for a week and they
audit everything.
A review could be close.
But it's less in scope.
And they say that on their on the page where they say that they've reviewed the
information.
And a review for your information is less in scope than an audit.
But it but they have run the numbers and they've done a few things that are similar to an
audit.
So in terms of trust and verify, we will accept audits and reviews as our number one and
two key.
submissions in terms of getting uh a a a credit reviewed properly in rates.
You can trust audit audited numbers, and there's more options for banks that we work with
to take audited financial statements because it's all the same.
There's a standard that they go by and there's more banks that only deal with audited
financials.
So we have more options as an underwriter to get uh lower rates for companies in that
category.
A compilation is exactly what it sounds like.
Let's gather a bunch of information.
Let's get here your financials, here your accounting records, here's your accounts
receivables, and we're gonna compile them into an order that you can understand on on
paper.
And that's it.
We're not reviewing anything.
I'm not getting my calculator out.
I'm not running any tests, but we're gonna compile them into uh a visual format.
that anybody looking at financial statements can understand more m more quickly than you
would if you just got a pile of tax returns.
Are you following me so far?
Absolutely.
Yeah.
Thank you.
That's uh and and you're and and we're only gonna charge you four thousand dollars for
that on top of that.
So now you can see the credit, the quality of what's being submitted and how that might
play into how deals get done quicker compared to not as quick.
Because there's more work to be done if if you have to go through and spread compiled
information, you kinda have to come to your own conclusions when you go through that.
Whereas an audit, you can trust the numbers, it's right there.
There's not much you have to do at all because it's right there.
Right, right.
No, it makes makes a lot of sense.
so let's pivot and talk about the trucking downturn, as you obviously it it caught a lot
of people off guard.
What lessons did TCS take take away from that cycle?
Good question.
I think what we learned is that we're no different in our assessment of the trucking
industry as a lot of other financial institutions.
You know, you feel bad when you have to turn down what looks like to be a good credit, but
the industry of trucking has a big black mark across its forehead.
It as it relates to how banks and other financial is financial institutions.
perceive those companies.
And it's kind of the business model.
And I think from an asset perspective, the economy plays a big role into the value of
those assets if you were to ever get them back.
For example, in the event of a default, you have a bunch of tractors and trailers that
you've just leased to a particular company, but they are in
Remedies mode.
You have to repossess.
Well, if the market for tractors and trailers is saturated all across the world, where a
bunch of them are just sitting in lots all over the place, then the value of the assets
that you leased are in the tank and probably don't meet the the assumptions that you made
on day one as to what the value of that equipment would be.
So here you are two years into a five-year lease, repossessing.
these assets that have completely depleted in value.
And that's how companies go out of business.
And once you do one or two of those transactions that get into that space, you if you
survive it, you'll never do it again.
And I think that's what you're seeing with banks that have been caught um holding the bag
on on that type of collateral for years.
And so the whole industry is like, no more.
So you get these transactions and you're like,
We we like it, but I don't think we're gonna be able to get it done because we don't have
a place to go with it.
Right.
What about specialty transportation versus over the road trucking today?
And where is TCS more comfortable leaning in?
Is it in that specialty sector of of transportation?
Bucket trucks.
I I think that's a that's a great question because I'm picking on over the road tractors
and trailers, right?
But if you get to a cement truck or vacuum truck, that's a specialty truck or a boom
truck.
Those are specialty trucks.
They're revenue generating vehicles that are mission critical to most companies'
operations.
Um so so you have companies that get these things.
A a company that that gets a bunch of vacuum trucks are probably in the vacuum truck
business.
And um
And so they need those to generate the business that they get.
And so they become more more mission critical.
Whereas the examples that you see, if Walmart got a a tractor and trailer and the driver
decided that he's not making enough money and just jumped out of the truck and left it on
the side of the road, is Walmart impacted by losing that truck?
You know, or if you if they drove it into a ditch or the driver drove it over the side of
a cliff, how much is Walmart impacted by losing that one truck?
Probably zero.
Right?
Where I guess it depends how many trees they have to replace or guardrails, of course.
Right, right.
I'm just saying that that that the specialty trucks have more intrinsic value to us as a
lender because th we know that the company
If things go bad, they're gonna if they're gonna try to salvage the business, they're
gonna wanna make their payments on those things to keep the business running.
Right.
And that's important to us.
Yeah, I mean the specialty essential, right?
I mean, obviously if it's essential uh and it's needed, you know, those are the those are
the companies you wanna you wanna invest in, right?
Right.
Um so after three years on the broker desk at TCS.
How has your approach to deal vetting evolved?
I I think it's evolved in getting to the point quicker.
It's so it's it's much better to be honest with the brokers that that it's gonna take if
if all you have is tax returns, you're you're two weeks out.
Do business with me or not?
Right.
Because you know, I I could sound like that desperate salesperson that says, yeah, we can
get it done quickly.
And I'm misleading the brokers, right?
Tax returns, we you have to vet those things.
You have to go through them and spread the numbers yourself.
Whereas an audit, like I said, is more efficient.
So when you're talking about evolution in in in my department, instead of sounding like I
am the the the the the the company that can do everything fast, there's just no speed when
it comes to
underwriting tax returns.
And have we done tax returns quickly?
Yes, we have.
We there are companies out there, we did one last year that for for what's surprising to
me, a company that does $100 million in revenue only does tax returns.
Companies are profitable.
They've been in business since 1935.
And
speaking to the president of the company, he just says that they never needed to.
And there are companies out there that don't need to pay fifty thousand dollars for an
audit because their business has been running the way it's been running for years.
And it's not impacted by uh the need to pay fifty thousand dollars for someone to come and
audit their financial statements.
And so you have a good credit that's profitable with tax return.
$100 million, those are outliers.
Most of the time, it's a smaller company with tax returns.
And they're one lawsuit away from going out of business because they're just not big
enough to absorb a major impact to their company.
And so the evolution is that we just have to be real with the the brokers when it comes to
tax returns.
Which I would submit is not seventy five percent of the types of deals that they do
business with.
They're they're getting deals from ten to twenty million dollar companies or five million
to twenty million dollar companies.
And those companies are more likely to just have tax returns.
If you're lucky you can get a compilation.
Mm-hmm.
Does that make sense?
Absolutely.
So would it would it would those companies be flush with cash?
Um is that
Could that be a reason why they're maybe providing just tax returns versus having audited
financials?
Is it is it because they just sit in a lot of cash?
Nope.
No.
No?
No.
No.
But an audit is expensive.
Now now if you do government contracting, then you have to have audits.
So that's a that's a an that's a cost that you have to figure out in your business that
If you're financing with the government, it's required that you have audited financials.
Or if you're a medical company, you you or pharmaceutical, small pharmaceutical dis you
have to have audits because you're doing business with entities that require that that
information is vetted to the to the highest standard.
Your financial information.
No fraud, no weird stuff.
the owner can't be doing weird stuff.
I mean, all that stuff is vetted in the audit.
Most
Companies that are small just don't that don't need it.
you know, a donut company that's making fifteen million dollars and they sell donuts, they
don't need an audit.
They don't need to spend fifty thousand dollars to get an audit.
Why?
What I mean, just w wh why?
What who's gonna who why do we need to be scrutinized unless I'm gonna go public?
But at $15 million, that's too small.
But if I was a $500 million donut company and I and I needed to go
public, I'd have to do audits.
But a but a ten to fifteen million dollar company, donut company that has five locations
in Northern Oregon, uh, probably has no reason to to pay a whole bunch of money to have
their financial statements uh right vetted in terms of what a reviewer audit costs.
Yeah, you mentioned donut company, kind of like the one where we visited in uh California
at a strip mall where they they would they were cash only.
take a credit card.
Yeah, that that's that blew me away.
That blew me away.
And yeah, that company, yeah.
They were looking for new equipment to be get financed through TCS, they're they would
definitely um they would they would definitely that would that would be weeks or months of
trying to get that deal underrated.
Right.
Right.
Um
So you've laid out a very thoughtful credit philosophy.
What's interesting is that some of the strongest opportunities do not come through
traditional broker conversations at all.
So I'd like to shift to vendor relationships and the idea of getting in through the back
door.
So you often say the best brokers are working vendor relationships just as hard as
borrower relationships.
What does that look like in practice?
From the vendor side.
Yes.
From the vendor relationship side, yes.
In in practice, I think that the the vendors are are are sensitive market.
We we kind of touched on this in one of the out sessions at the last convention at the
ACFB, I think it was, where vendor relationships come and go.
And I don't think anybody can brag about their 10-year vendor relationship because they
they they go through hard times.
They go through difficult times.
Vendors are in the business of selling whatever their product is, right?
And so if you're not Hewlett Packard or IBM or or John Deere or or Cat, that have their
own financial affiliates that they run their business through, Dell Finance or IBM, IBM
Credit Corps, that that's part of a small box on the sale application.
on the invoice that you can check the box and get financing.
If you don't have that, which ninety-five percent of most vendors don't, then they either
have bank relationships or they have broker relationships.
In other words, there there's this relationship that they have that brokers are here to
help, here to help you sell your equipment.
I'm here.
I can I can start a vendor relationship.
I'm not even a broker.
We're a direct middle market equipment lender.
I could go to the same vendor and say, Look, skip the middleman.
Why would you go through a broker that's gonna add five to ten points to the cost of the
deal?
You can go direct through me where that's not even an a a conversation and give your
customer the best possible rate and get your equipment sold because
They can't pay cash for it, or they don't want to pay cash for it.
You have a industrial oven that costs $1.5 million.
Who wants to buy that?
Who wants to use their cash, the quality of their cash to buy some metal box that that
burns up every day to a thousand degrees?
You know, that's just not a good investment of your money, and CFOs know that.
Which is why they decide to finance these things.
So if you go to a convention, whether it's plastics or robotics or or restaurant
equipment, and you make a pitch to these manufacturers and vendors that make these things,
you can get traction with these companies if you promise them the things that they care
about the most.
which is their customer and moving the the equipment, right?
So they want to make sure you're going to take care of your take care of their customer.
You have, you're not going to embarrass them on rates.
And you have quick turnaround and all those things that you would want if you went to go
get a car.
Cars are great examples.
You can walk into a car dealership and drive away the same day with financing and
insurance.
They have the whole
solution right there at the desk.
And that's what vendors want.
They want it to be seamless.
They want it to be easy.
And so that's the challenge with brokers.
I mean with vendors.
And and so a lot of times what vendors don't understand, Andrew, are credit.
They're they're not in the business to understand credit.
They only understand selling their equipment, but they don't understand the the aspects
and the challenges of credit.
And they may have a customer that really needs a $3 million piece of equipment, and
they're excited, they're chomping at the bit to make that sale, but the customer is not in
the position to write a check to $3 million.
So they need financing.
So now the pressure shifts.
They're excited about making a sale.
The vendor's like, You gotta do my financing.
You gotta do this.
You gotta get this done.
Right.
And so they
They're pressuring you to get the financing.
And all of a sudden, here we go.
Tax returns.
I'm cracking myself up.
You know, tax returns.
uh, you know, an owner who, if you look at the financials, is is distributing half a
million dollars to himself every single year.
And you look on his personal financial statement, he's got a Lexus, a boat.
Two properties, one in the Bahamas, one in Marcus Vineyard, another one in California,
jewelry, and you know, and so it it causes you to us to think as underwriters, like,
what's going on?
This guy lives high on the hog, if he he can take the business down based on the tax
returns.
So that becomes the the issues that you have with credit, even if you took a personal
guarantee.
I'm talking a lot about this, but I'm just giving you an example as it relates to vendors
because all that emotion switched, but all this customer can provide are tax returns.
And so now we're in the drama phase.
Well, it's not going to be as quick as you want, vendor, but I have no idea when it's
going to be either.
It's just going to be longer than than a week or two weeks before we get this thing credit
approved.
And these guys are freaking out because they think they're going to lose a sale.
And the customer wants the equipment and they think the customer feels like all this is
being taken care of.
And now they're on the phone hammering the vendor, What's taking so long?
And the vendor's coming to us going, What's taking so long?
And then I'm calling my credit people.
I'm like, What's taking so long?
So it's a weird, strange world we live in.
But that's kind of just an example.
But we have you asked the question, how do you manage that?
Um, yeah, and it it's a case by case basis.
Because the opposite is also true.
You can get a c a vendor that has a a five a tr 5A1 company uh that's investment grade and
it goes quickly.
And if you can do those and keep them happy, then your vendor's gonna send you more deal
and more deals.
More deals if if but all the deals aren't like that.
So what happens is that then also managers advent I mean this is all part of it.
Okay, so you're dealing with one guy at the at the vendor that you're dealing with, that's
the person you met.
He split.
He's gone.
He worked there a year and a half, did his thing, or didn't make quota, got fired, or
maybe he got plucked from another company.
And now you're at ground zero because that was your appointment.
at that vendor.
And you try to reach out to some of the other people in the company to do the same thing.
You're like, ah, maybe.
We'll we'll we'll s we'll, yeah, maybe we'll we'll call you if we need you.
But you have no relationship with anybody else inside the vendor.
So that's the other part is the human aspect.
These people don't stick around.
You don't have a v you usually have a vendor relationship, not necessarily with the
company.
The vendor relationships with the guy, sell the sales manager or the salesperson.
That works at that company that you buddied up with and he's giving you deals.
But if he splits You gotta start all over again.
Yeah.
Yeah.
So that's that's a good segue into this next question that I have for you.
How how are you thinking about participating more directly in manufacturer and vendor
conventions as a lender?
Well, I was brought up to TCS
To grow this department, you know, to to start it up with by myself.
I've been attending some of the conferences we met, but I also intend on growing the
growing the group because I can't do it all.
It's a lot of traveling, and going to some of these conventions is brutal on the body.
Um it j just the whole traveling aspect of it.
So the point is, is that.
We need to go to more conventions to grow our efforts in this business.
And so we need to go to more.
I think that just like the brokers are doing, we need to visit and attend more of these
conventions.
There's a lot of traction that could be made, but I'm just one person, so I can't do it
all.
And by growing the department, I can get more people to do some of those things and
hopefully grow the business.
And that's kind of the answer to that question.
Thank you.
So we've talked a lot about strategy, credit, access.
Let's bring this home for the brokers listening who want to move up market and do this
consistently.
Why do brokers who are successful in app only small ticket deals often get caught off
guard when a larger deal lands on their desk?
Why do they get caught off guard?
Yeah.
I mean, it's that simple.
But the point is is they don't want to just flip it and walk away because if I had this
conversation a couple of weeks ago, imagine getting fifteen points.
on or 10 or 10 points on a 50 milli 50,000 dollar deal.
Right?
That's a five thousand dollar commission check.
In my world, that's not that big.
But 10 points is a lot of points.
That's huge.
Because we do 10 million dollar transactions.
And so to throw out 10 points on a 10 million dollar transaction
Imagine the commissions, and I've seen those deals.
I've seen 10 point transactions on $10 million deals.
You know, all of us have done one or two in our lifetimes, but there's other people around
that do them too.
So you see it.
So it's not impossible, but it's rare in our business.
But it's it's but it's commonplace on the broker side because they're doing small ticket.
So the answer to your question is that when they trip into a larger deal, they're not
gonna just
say I can't do anything, I can't help you, Mr.
Customer.
See you later.
They're gonna call Bruce to see if man, if I I I've never even one point on a million
dollar transaction is a ten thousand dollar commission check compared to the ten points I
was making on fifty thousand dollars.
So if Bruce can get that deal done, I'm I'm gonna
Send all my larger deals to him because if he can approve them, I'm good for the year.
Right?
Mm-hmm.
And so the the the reality of what you're saying is that because it's not what they do,
they're used to it's very easy to ask someone to fill out a business application because
they'll run the credit and get all the information that they need.
They'll get a paydex and they'll get a credit score.
A credit like your credit, you know, set your seven sixty, five twenty, you know, that
that's all they need to go to channel partners, to Navitas, to all these different
companies.
That's kind of almost all they need.
Maybe a couple of bank statements.
And their deal gets reviewed and approved or rejected in twenty four, forty eight hours.
That's all that the brokers have ever had to do as long as they're in that small ticket
realm, because that's the model.
Right.
Larger than that, there's a lot more questions that they're not prepared for that they
need to be educated about.
But I don't think it's if you're telling me that they're only running into one or two a
year, I don't think they're gonna spend a lot of energy learning about middle market
requirements.
Because first of all, I don't have any in front of me.
But if I do, do I need to spend a lot of time learning about what I need to submit to
Bruce?
In the event that I run into a five hundred thousand dollar deal.
I don't think that is something that they're burning a lot of calories on.
Right, right.
Just kinda just kinda deal with it when it when it happens.
so where do you where do you see the biggest difference between seasoned brokers with
established uh niches versus, you know, newer brokers who are still learning the
fundamentals?
Just the understanding, just the experience of what I just described.
Yeah.
So if they're if they're broken, there are a few
You go to NIFA, then you they're middle market brokers.
I get those deals too.
And they understand what you need.
They understand that they need they need the past three years financial statements,
interims.
You know, we're looking for reviews or audits.
We need a purpose and justification statement.
In other words, what that means is the purpose of the equipment.
Why are they getting this crane?
Not that they're just getting a crane.
Why?
Why are they getting we that's important to all of our lenders?
Why are they getting the crane?
And then also what so so what is the crane sub are they replacing it or are they adding to
their crane inventory?
So there are a lot of questions regarding the equipment.
And ultimately what is what is it gonna do?
I mean, that's all in the purpose and justification.
So those are questions that come into the kind of information that we need uh in our
submissions that brokers don't normally have.
But then like you your questions uh dealt with
What about the experienced brokers?
So the experienced brokers kinda know that.
So you'll get a write up from an experienced broker that's beautiful.
Mm-hmm.
There are some brokers, I'm like, wow, this guy, this guy's great.
And and man, it's just a breath of fresh air.
It it is.
It's just a breath of fresh air with a broker and and the good news is what what happens
with some of these experienced brokers, they used to be ex leasing guys.
They probably worked in a leasing company, so they know
what's necessary to send to someone like myself in terms of well we need to have a good
presentation and I've got several of those kind of guys too.
So so the dichotomy is that we have to deal with both aspects the rookies or the ones that
don't know compared to the ones that do.
So you just like I hate to say it, you know, you get one from an inexperienced guy.
You're like, boy, okay.
you have an hour so I can run this by you?
So I can run this to as to what you need.
And uh and so that's just that's just the world I live in, you know.
I guess I love it.
I'm still here.
Uh so when you look at a broker, what what signals tell you that they're worth cultivating
as a long term partner?
In addition to what you just described about, you know, the prep work involved and knowing
knowing what what you need to help get a deal approved.
It's usually experience.
I've I've the past year I've worked with two brokers whom I'm not sure that I care if I
ever work with them again.
And each situation was different in its own right, but it was enough that I could say that
I if if they called me I I'm I'm gonna listen, but I'm gonna be less tolerant.
of the stuff that I put up with them the last time we we did business.
So that's the extent of my answer there.
Gotcha.
And if you can give one piece of advice to a younger broker who wants to move in to the
consistent middle market deal flow, what would it be?
Well you have to prospect bigger and and you have to well so a lot of brokers spend their
energy going to vendors.
Right.
When I go to uh some of the training sessions at the AACCFB and NIFA, oftentimes the
brokers are in these sessions talking about the vendor relationships that they have.
Or or a lot of times they get referrals from other brokers that they you might have an
agricultural broker who ran into a deal that is not in his category.
So I'll get calls from brokers who are working with other brokers.
So they so both of them have to get paid.
Look, I'm working for a buddy of mine, Bruce, and so we both he gave it to me.
So there's two pieces of the pie that have to split the commission if this deal gets done.
I mean, it it gets complicated all around.
And so you're asking me, what would I say to a an inexperienced broker that wants to spend
more time in the middle market?
Um you know, the middle market is different because bigger the bigger companies get bigger
deals.
And and it it's it's it's changing their business model a little bit.
But you have to call like we do.
We have an outbound sales force that call into these companies directly to the CFOs and
the controllers.
I think that the brokers have done a great job going to these conventions and getting
deals through these vendors.
Right.
But it also might I and I think the thing the re the difference, their their pitch to the
vendors is I can get your deal turned around in twenty four, forty-eight hours.
And so that's middle, that's small ticket.
Yeah.
Right?
That's small ticket.
And so that's the pitch.
And so they're selling themselves as a small ticket vendor.
Right?
So he did they need to ask the question and what do you guys do with your larger deals?
Who do you guys work with in that aspect?
And then the question might come back to them is that okay, if we give you a larger deal,
how quickly can you turn those around?
Because we have people that we go to, and their pitch might be, Well, I actually have
access to people like Bruce who can turn deals around as quickly as you think you're
getting them done with the contacts that you have.
Mm-hmm.
If that's a world that you want to spend in, spend time in.
Does that make sense to you?
Absolutely.
No, that's great advice.
Thank you.
Um, so we have to end on this one.
You've kind of become known for bringing donuts to conferences.
So I have to ask, what is the better move?
Do you go with something consistent like Krispy Kreme, where everyone knows what they're
gonna get?
Or do you go local and try to stand out a bit more?
When I first started doing the donuts, I thought, okay, Krispy Kreme was easy.
That's an easy decision.
Who doesn't like Krispy Kreams?
And the and the the fact of the matter is that nobody uh dislikes Krispy Kreams.
And so I started off doing the Krispy Kreme Donuts.
Then it was suggested, I think it was by you, Andrew, that I that I mix it up a little
bit, right?
And go local.
And and you know, it's a good idea because Krispy Teams is this big corporation.
So we go to all these different cities, and you're right.
You should invest in the community that you're visiting.
And so your idea was to go to a a local donut place, like the lady we went to and I think
it was a beach.
Wow, put a hole in the wall, man.
That place was amazing.
But it was a local community and you can tell it's a family owned business.
And um then they take cash only and
But we support so the point is is that with the local community, a lot of them try to
separate themselves from crispy creams.
So they offer a variety of wild and crazy exotic donuts.
And that's the grade.
So we've experienced experimented with that.
And it's just fun to come with a mix.
And and so it just depends.
Like for example, I think that the cool thing about crispy creams is that they are on
the the DoorDash list of companies that you can go to.
Some of the smaller companies are not.
Yeah.
And in a pinch, if I'm in a hurry or if I need to have Donuts delivered, you know, Krispy
Kreams is that company that can do that like right away.
So sometimes I'm forced to do that and I was the last time because we were on Disney
property.
You know, we were staying at the in at Disney World, a Disney oh
What's that area called?
I forgot the area.
Disney Springs or Disney Springs.
Yeah.
Yeah.
So di if you're on Disney Springs property, there's no donut shop for twenty miles.
Normal donut shop.
And because of that, Krispy Kreeves is that company that can get it there.
Because it's right outside the property.
There's one usually within a couple of miles.
And and that was the that was the solution.
But there were a lot of exotic donuts, but I couldn't get to 'cause they were so far away.
And you didn't have a friend with you that had a rental car that could that could drive
you to the donut store, right?
Or a friend that had cash.
In Orlando, I don't think you were willing to drive that far.
It was far.
Or or a friend that actually had cash on hand to be able to pay for the donuts for you
because they didn't take credit card, right?
Yeah.
That was crazy.
And I didn't think that was I've never experienced anything like that.
That was really funny.
That was bizarre.
We it was you, Chris, and I who took a little ride that morning.
You know, and I also heard something recently, I'm not gonna name names, but someone
suggested maybe cutting those those exotic donuts into quarters because maybe some people
are almost afraid to grab a full one, right?
They don't wanna be that person to to, you know, have to get a forklift to lift that donut
off the box off your table, right?
And walk away with with that huge castle as you described.
So let me ask you this do more people actually take a full donut or are you better off
going going with the samples?
Well, you know, this is a l a leasing podcast, right?
And we're talking about donuts.
So it's funny, there's a slight evolution that has that's come about in my experience
providing donuts.
So we've just talked about Krispy Kreme.
So now Andrew is asking me, now, do people take a whole donut?
And what about the people that reject the donuts?
Do you think that they reject it because it's too much?
Or because it's too sweet and they're trying to stay.
I mean, there's so many excuses as to why people get them and don't get them.
And so it was suggested that, well, perhaps Bruce, you should try cutting them.
Cutt cutting cutting them to make the pieces more bite-sized and see what your response is
if you're trying to get rid of the donuts.
So I experim experimented with that.
And it worked.
There are people that would normally reject a donut because they don't want to suffer the
embarrassment of walking around with some castle full of whipped cream and and Disney
figures on their donut.
Oreos.
Yeah, Oreos and just all kinds of or or or cruise ships on their donut.
I mean that's very I get it.
Walking around with a donut that looks like that.
Or if I cut it in half.
Now maybe that person will take that on a plate and walk away with it.
And it's more demure, so to speak, for them.
And so it people are it's an interesting world.
And so you have all these personalities when it comes to providing donuts.
So I you know, so I I guess the bigger question behind all of it is, are donuts actually
the strategy or are they just a hook to get people to stop?
Because at the end of the day, I think what really what really works better
Is bringing more people, right?
Or is it getting the right people to stay and have real conversations?
You know, my answer is going to be kind of cheesy.
And when it comes to some of the other vendors that show up, whether it's channel
partners, who can compete with them, right?
Uh you, uh your company, I mean, there are so many companies that bring so much swag.
So I made that decision early on.
First of all, I'm coming by myself.
I'm not carrying all that crap.
And and everybody has the same thing.
So it's kind of boring, static that everybody has pens and car, you know, and and and
keychains and some of the same old stuff with their logo on it, but they're they're
carrying this stuff.
So every desk, uh unless you bring something really exotic and something new to the fray,
it it's I can't imagine that these people are traveling with all this stuff.
And have to deal with all this trinketry on their desk.
So very quickly, I'm like, I'm not doing all that crap.
I mean, that's really what I said.
I said, I'm not doing it.
I'm not coming with brochures, you know, card stands, things hanging on the thing, water
fountains on the desk, electricity, chargers, and all these boxes full of stuff.
I did that at at a previous company and it was a nightmare.
I said, I'm gonna bring donuts.
I'm gonna bring donuts.
I'm gonna I'm gonna see how that works.
It wasn't sexier than that, Andrew.
I'm sorry to disappoint.
No, I you know Yeah.
I think it's great.
I mean a lot of laziness.
Call it call it call it for what it is.
Laziness or just being real?
I think there's a lot of strategy behind it.
Honestly.
I mean it's it's a great afternoon pick me up, right?
They get a little bit of a sugar high, like that three o'clock crash.
Right.
So they come by your booth, they grab they grab a donut and you know, they get s get some
energy.
And while they're there, they you have you have a good conversation with right?
And you know, you close the box when the when when you shut the booth down for the day.
So how many people are gonna go over there and open up that box and grab a donut, right?
Versus when you were at your previous company, you know, you guys would have these Yetis
stacked on tables and and people would strategically wait for you to leave your booth and
then they'd come grab the Yeti and they, you know, you never never had a conversation with
those people.
All they were there for is to grab a forty dollar Yeti, right?
I think an element of what you said happened over time, which now it can become a
strategy.
It didn't start off like that.
Just straight up.
Let's just be honest.
It did not start out like that.
But it evolved to that, because you're right.
It it people see the is Bruce here with the dog you know, they'll see me walking in the
hallway.
Did you read the dogs?
Yeah.
Yes, you brought the dog.
I'm coming by.
I'm coming by.
Right?
You know, it's all or another guy, Oh, there you are.
Here's the guy with the donuts.
And you get these conversations and you meet people and and and they start seeing you in a
different like and you make friends that way.
Even w albeit through the donuts, right?
That's just the way it happens.
It you know, it starts it starts with a donut, right?
And and a conversation that ultimately leads to building a relationship which leads to
establishing trust.
Which leads to, you know, closing a deal, right?
Right.
And you know, the trust thing now it's but it's a lot of pressure now because people trust
that I'm gonna be there with the donuts.
So they trust that I'm gonna be there.
Therefore, I have to be there and I have to come.
And my goodness, if I didn't, I don't know what that's gonna look like.
Oh, Bruce is not here with the donuts.
What happened with TCS, right?
I'm so used to them being there with the donuts.
You've uh you've got this cult following.
Yeah.
I I've created my own little following.
Yeah.
Now I mean always back it up.
You you've raised the bar, you've uh set expectations, people people are, you know, they I
think they also want to know is it gonna be is it gonna be Krispy Kreme or is it gonna be
the a local favorite, right?
You know both yeah there are there are a couple of guys that are donut eaters and you know
they they
cannot wait to come get two or three.
So if it's the bigger ones, the heftier ones, they'll they'll get those too.
It's actually what's really funny, I don't want to be off on the tangent, but if you if
for the audience that's that's looking, the conventions take breaks.
There's a lunch break, and then maybe the the keynote speaker will speak either in the
morning or in the afternoon.
So that's about an hour, hour and a half break.
So the hallways
inside the convention go vacant.
There's nobody around.
There are there are people that that wait for that moment to come pluck all the disks
while no one's around, no one's looking.
And oftentimes I'll sit there and have my lunch when nobody's around and these these these
rats, these rats with handbags come around plucking all the desks, and that's when they'll
come grab an apple fritter.
For themselves, right?
That's the only nobody's looking.
And someone will grab that eight inch apple fritter and and take it behind the curtain and
tear that thing up.
uh So Yeah, they don't want to do it in the middle of the the evening reception.
Right.
Right.
Right.
Um while they're while they're drinking a cocktail.
That's a funny observation.
Yeah.
No, it's interesting.
It's interesting as a as a service provider as when when you're when you have a booth.
You can just sit back and and kind of observe.
People watch.
But uh is there anything else that you know, we've had a great, great debate or discussion
about about donuts and how that ultimately leads to closing deals.
uh is there anything else that uh you'd like to share with the audience that we may not
have covered during our discussion?
Yeah, we didn't cover Go Vikings.
Yeah.
Yeah.
You guys guys have an interest had an interesting off season.
Um, I think uh
to just touch on that quickly.
I think um you know what you you guys need a quarterback.
I think you have all the all the pieces in place.
You had a you had a stud quarterback, I think you guys are are in the conversation of
being a Super Bowl contender.
So that's that's the wild card.
If you guys had Josh Allen, you guys would probably win you'd have won two or three Super
Bowls by now.
I I actually do agree with that statement.
You know?
Um otherwise unless they we it everything remains to be seen.
There's no sense in even talking about them.
'Cause right now it's complete question mark as to what they're gonna be this year.
So we don't have to take up a whole bunch of tape talking about.
Well, yeah, it's just gonna be let's see how things shake out with your quarterback.
If McCarthy's the guy and he, you know, rebounds nicely from from a couple of
disappointing injury riddled seasons.
Or is Kyler Murray the guy, right?
Um, you know, which he's had he's had some success early in his career.
I mean if he would just stay away from playing video games, I think he'd be a a much more
productive quarterback.
But uh Well Um But no, I I think he's definitely talented.
Um and you got the stud receivers.
If I mean if the Bills had Jefferson and Addison, I think we'd have a couple of Super
Bowls that we'd be talking about.
So uh both of our teams have, you know, have, you know, question marks around if you know
obviously you have the the the biggest question marks always gonna be around the
quarterback position.
Um
I mean Alan's been Allen's had a great career to this point with only having uh, you know,
digs for, you know, those three or four years.
But aside from that, he really hasn't had had you know, he's had some great number twos,
some really nice number threes and and some tight ends, but in a you know, good running
back, good run game.
But yeah, I mean that's that's the missing piece.
So who knows?
Maybe with DJ Moore and with with some other players that we've you know, like Shakir and
maybe Josh Palmer has a hell you know, he's healthy this year and
And he can um, you know, add some add some value to that position in our tight ends,
Kincaid stays healthy, I think.
You know, but we got the question mark around having a new head coach, right?
Right.
Yeah.
Yeah.
Is it offensive or offensive coach?
You what kinda what's his main philosophy?
Well, he was our he was Allen's quarterback coach and then he became his offensive
coordinator and then ultimately got promoted to head coach.
So he's has an offensive background.
Okay.
Um
But uh, you know, we brought some guys in from from Denver, Jim Leonard, who was a former
Bills player, I would say safety line, you know, hybrid linebacker.
Um, you know, so he's now our defensive coordinator and and we have a a new offensive
coordinator.
But yeah, I guess I guess we have question marks going into the season too.
I think that's that's gonna be the biggest question mark.
How are things gonna gel?
What's the culture?
It's you know, things are gonna look
looking you know, they're gonna t look differently uh than what we're used to under the
previous regime.
But you know we got Allen.
Are you in the new stadium?
Is it all Yeah, yeah, I'll be there.
I have my my tickets.
Um so when the Vikings come to Buffalo, you'll have to bring Chris back.
Yeah.
We'll go we'll go to a go to another game and then and the new the new venue that that's
gonna open up this this fall.
So um but but yeah we can debate we'll debate football maybe
next time I have you on.
Yeah.
And hopefully, who knows, maybe both our teams will see each other in the Super Bowl.
You never know, right?
Yeah.
So You never know.
But this is uh this has been an incredible, insightful conversation.
You've shared what truly works in that middle market, what doesn't, what brokers need to
do if they want to be successful at that level.
What stands out most is how intentional your approach is around credit, the relationships
and and that long term thinking from
You know, for brokers listening, there's a lot of practical takeaways here around
preparation, transparency, and investing in your own development.
I want to thank you for joining us and sharing your sp perspective with the ACS community.
I appreciate you.
I appreciate the opportunity and hopefully somebody learns something today.
That would be my goal.
Awesome.
Well, I'm sure I'm sure they will.
So and to everybody listening, thanks for tuning in to the ACS.
Portfolio perspective.
If you found value in today's conversation, be sure to subscribe, share it with someone in
your network.
And we look forward to seeing you next time.
Thank you.