Alpharetta, GA, March 22, 2016 – With recent news of lender consolidation, Robert Wagner of Northpoint Commercial Finance took a step back to offer a few perspectives on the impact to companies, especially in the technology sector. Northpoint is a leading diversified inventory finance company for technology original equipment manufacturers (OEMs), distributors and value added resellers, providing creative, end-to-end financing solutions along the entire supply chain.
“These market disruptions have fostered a lot of media and industry conversation,” said Wagner, an industry veteran of the financial services and channel finance experience. “As an independent lender and market leader, Northpoint has been able to step in and address concerns among technology borrowers.”
The recent consolidation will most likely have an impact on OEM, Distributors, and Resellers. Wagner raised a few issues that he sees on the immediate horizon.
- Reduced capital and liquidity to the channel. Borrowers will likely have reduced access to capital. With the combination of capital providers and sheer size of the industry, there may be market segments that lenders are unable or unwilling to serve.
- Increased bank regulatory pressure and compliance hurdles may cause large lenders to have to abandon some market segments and avoid any significant lending concentrations.
- Channel lending to small and medium size businesses may contract or be abandoned altogether, as the focus shifts to larger, more profitable customer relationships.
Drawing parallels to the late 1990s into early 2000s, Wagner pointed out the industry has seen this cycle before. “At the time there were half a dozen lenders, then GE Capital acquired several and consolidated into one lending powerhouse. There was immense concern by borrowers about a lack of funding options that gave birth to new capital providers that were attracted to the space. It looks like that pattern is repeating itself now.”
For now, with fewer financing options for their Reseller Partners, OEMs and Distributors may have to increase open term accounts, increasing their collection and credit risk as well as back office personnel cost. Secondly, solution providers may have to turn to higher cost money to finance product, so profitability will be affected throughout the channel.
Northpoint has stepped in to fill the void and is committed to helping OEMs, distributors and solution providers capture more sales with a steady source of working capital. “Northpoint has taken the lead in reaching out to technology OEMs, distributors, and solution providers with customized financing solutions that can adapt to changing needs. What’s more, as an independent commercial finance company, we can offer more benefits in terms of speed and flexibility,” Wagner said.
Wagner underscored Northpoint’s dedication to the technology sector through their ability to support channel partners of all sizes, including those focused in the SMB space.
About Northpoint Commercial Finance
Northpoint Commercial Finance, with offices in the U.S. and Canada, is a diversified financial solutions provider offering inventory lending, floorplan finance and asset based financing. An experienced lender, they offer a wide array of program structures to meet the needs of original equipment manufacturers, distributors, resellers and dealers in a variety of consumer and commercial products industries. Their team offers a creative, flexible and personal approach combined with innovative technologies and streamlined processes. For more information about Northpoint’s product offerings, visit www.quebec.northpointcf.com.