If you are in the lending business, you will find that the field has gotten very crowded over the last decade. With interest rates low and the stock market high, investors have been looking in vain for new places to put their money to get higher yields. Couple that with the new crop of FinTech’s offering loans over the internet and it’s no wonder why there is heated competition among lenders looking for borrowers to take their money.
The problem is, money is money. There is no distinction between your money, my money, his money or her money. Money simply is money. So what is a lender to do to get someone to take their money and not from the lender next door? ropping rates is a once honored practice. You have seen rates drop on all varieties of loans, as well as the easing of loan covenants; those pesky clauses in contracts that keep borrowers from taking big risks with lenders’ money. The downside to both cutting rates and loosening covenants is that lenders not only increase default risk, but they also lower the profits needed to weather the coming storm.
Unfortunately there is no uniqueness to these changes. Your competition can easily follow suit with lower rates and lower credit standards than what you offered. Lending has become a feeding frenzy where the competition isn’t eating you, they are now eating themselves. Even when you find a borrower who expects lower rates and lacks controls, they also want something more. Something they didn’t even think of asking for. That surprise bonus they think you have up your sleeve. That differentiator that separates your proposal from the other dozen they have on their desk. You could offer sports tickets or a round of golf. That might have worked in the 70’s and 80’s, but it just doesn’t cut it with the new crop of CEO’s and CFO’s. They want savings, lower costs, better cash flow and bigger profits.
With the development of the FinTech space, there are a new crop of benefits lenders can offer. Online lenders offer online access, speed, less paperwork and an ease of use. Credit card companies have offered airline miles for years. For banks it’s … well…I guess I am not sure they have found that special benefit quite yet. That is until possibly now. Seeing an untapped market with tremendous growth, banks and finance companies have developed a new type of supply chain financing: a Vendor Procurement Credit Card. Call it a virtual credit card on steroids: Credit limits into the millions, cash rebates from vendors and extended terms from 30 days to 120 and beyond. These benefits cover all of the requirements of CEO’s and CFO’s savings, lower costs, better cash flow and profits. At one time a vendor procurement card was a stand-alone product. Today it’s an enhancement to any other lending a company might have. Money might just be money. It’s the enhancements that will make yours stand out from the crowd
If you are looking to add a vendor procurement card to your business, give AeroPay Express a call. Credit limits into the millions, no cost, no term contracts, cash rebates and … vendors don’t have to be part of the network to accept AeroPay Express. Now that’s some little extra something hidden up your sleeve.