EFA:  Would you agree that an important element to achieving success in a bank-owned leasing company is working closely with the lenders to stimulate interest in offering the equipment finance product?

Grimshaw:  Yes, and my past experiences working within a bank are certainly helpful in this situation. Building awareness about the products for the lenders and ensuring they possess the confidence to introduce the product to their customers is critical. In our case, we can also take full advantage of our vendor finance model quickly because the bank has a number of strong relationships with various VARs and we will now have the opportunity to work with those organizations to provide an equipment finance product.

EFA:  Please describe UniFi Equipment Finance’s target markets.

Grimshaw:  Our core business is focused on small-ticket transactions in the vendor and captive finance markets. But while we are a small ticket flow business, there are no restrictions prohibiting us from processing larger transactions. So if a vendor partner or captive finance company presents us with a large transaction and we can get comfortable with the credit and pricing, we will likely book that transaction. We are also focused on the end-user market, but strictly in the Bank of Ann Arbor footprint where we are supporting the lenders.

We are focused on five verticals, and the bank is one of the verticals. Our primarily focus is on the vendor and captive market nationally and the equipment sectors we primarily focus upon are Office Imaging, Technology, Industrial (through a relationship with Carrier for HVAC equipment) and Specialty Markets. The specialty markets focus is a bit of a “catch all.” If the industry makes sense and we can process the transactions efficiently and price them attractively, we are interested. The way we evaluate these specialty market opportunities is to review the characteristics of the obligor base, transaction size, and essential use nature of the collateral.

EFA:  Efficiency in processing creditworthy transactions is critical to succeed in the vendor/captive sector. What changes, if any, have been made operationally to the original Ervin Leasing platform to prepare for this new national market strategy as UniFi Equipment Finance?

Grimshaw:  The acquisition of the LeaseTeam ASPIRE product was our first move and a significant investment for the business that will allow us to build efficiency and scale for the vendor business. We’ve also made significant investments in human capital – hiring key individuals to build and support the business. We’ve invested in a new CRM platform to better manage our vendor relationships, a new website with a new domain name, and made a significant investment in fresh and new branding to go back into the market. So the bank has really stepped up with significant investments as they believe this to be a long term investment.

EFA:  How does UniFi Equipment Finance differentiate itself from larger equipment finance companies either bank-owned or independent?

Grimshaw:  If you remember 15 years ago before big box stores came into existence, our parents walked into local stores and there would be someone behind the counter who had been there fifteen to twenty years and was extremely knowledgeable. And at the end of the day both parties were relevant to each other – the customer could purchase what they needed and the store valued each customer individually. Most big box stores don’t enjoy those relationships, nor do they value them. The difference is that we are able to offer the marketplace the same type of product as the big leasing companies, but when the phone rings at UniFi, the person who answers the phone will be able to help that customer because they are knowledgeable. It’s a true part of our culture to care for our customers forever.

Another difference comes from the fact that the average tenure for an employee at UniFi Equipment Finance is 22 years, which is similar to the longevity of the people at Bank of Ann Arbor. The bank started in 1996 and we still have five of our original employees with us. So it’s a strong cultural fit between the two companies, and that culture is all about taking care of our customers.

EFA:  What do you both see as the biggest challenges UniFi Equipment Finance will face over the next three to five years?

Grimshaw:  The same challenges facing the Bank of Ann Arbor – the unknowns related to our economy that effect small to medium-sized businesses in our bank footprint and nationally. And also the ever-changing regulatory environment – ensuring we can meet the requirements (not just the minimum requirements).

Marshall:  We’ve got a bright vision for the future. But our growth has to be balanced with the credit quality culture that is so strongly embedded into our organization. Neither of us want to push the originations strategy so hard that it would ever create any sort of stress whatsoever to the credit quality of our portfolio. We must balance out growth objectives with doing things the right way. We must embrace patience and perseverance, and in three to five years we will see the fruits of our labor with a sizable and quality portfolio.