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Services NO COST TO YOU, THE VENDOR Given the benefits associated with our approach, it is worth noting the establishment and ongoing management of our programs are usually without cost to the vendors concerned. As an independent structured financier with extensive industry experience and sophisticated technical skills, the Australian Structured Finance Group saw there was opportunity to develop vendor finance products that overcame many of the deficiencies inherent in those programs operating in the market at that time.
Generally we offer two styles of vendor program:
Under this approach all brochures and documentation reflect the manufacturers finance arm. Invoices, rental payments, insurance cover, etc are in the name of the private label financier. Find out more >
Under both approaches, the programs are underwritten by a consortium of at least six undisclosed lenders comprising a combination of finance companies, trading and merchant Banks. Funding remains on our private label paper however the credit risk is taken by the underwriter syndicate in place. This approach is taken so as to overcome the limitations normally associated with relying upon a single lending source. In this manner, we are able to offer tax- based leasing, fully amortising rental, operating lease, asset purchase and a multitude of additional products as a single funding source to your customers, while in fact drawing funds from the undisclosed underwriter in our panel most suited to the transaction type and customer credit profile. Similarly, as we are able to spread a customer's risk across a panel of underwriters within every program, we are able to minimize the scenario of a single funding source declining a customer because of existing direct credit exposure or an unacceptable credit profile. [see how others finance] Under our approach, the entire underwriter panel would need to be exhausted before the customer is advised the transaction would need to be referred to external lenders. Recourse to the vendor is always a last resort as it involves the vendor considering a credit risk against a customer incapable of securing finance on commercially acceptable terms.
As an example, a vendor relying upon one of the big four Australian trading Banks for its finance program has a significant chance of being referred a customer that has core banking facilities with that Bank. Notwithstanding the customer may be very sound financially, the Bank may be a secured lender to that customer (who in fact is seeking to reduce its exposure to its Bankers by utilizing supplier finance) If the Bank has already reached its limit against that customer's balance sheets or if the customer's credit profile is unsatisfactory to the Bank, the vendor no longer has a finance program available to that customer without providing credit recourse to the Bank in support of it's finance program.
One of the first major programs established was for the commercial vehicle division of Mercedes-Benz in Australia. Within the finance program, we were required to establish and underwrite the facility, develop all finance marketing brochures to reflect the vendors products, implement a "selling with finance" training program for the vendors sales force and, following the national launch of the program, effect follow up co-marketing to the vendors "conquest accounts" in conjunction with their sales force and senior executive. The initial program was designed to run for a three- year period and was to pre-empt the introduction of Mercedes-Benz own global finance arm into the Australian market. Following the continued refinement of the Mercedes-Benz and subsequent programs, Australian Structured Finance became recognized as an Australian market leader in the establishment, funding and management of captive vendor finance companies for leading plant and equipment manufacturers and distributors. So successful have our programs been, that our organization was retained by an International Bank to establish a vendor program for one of their major global clients in Australia. Now operating for over a decade without financial recourse, the program has generated transactional volume exceeding $150.00 million, with significant ongoing sales penetration , in an industry known for its extremely high level of product and vendor finance competition. Of this figure, it is estimated that incremental sales exceeding $25.00 million were secured due to the availability of competitive vendor finance terms to customers.
Unlike the majority of recent entrants to this specialised field, we have been an Australian market leader in the establishment, management and funding of "private label" vendor finance companies for the past decade, with a proven track record in generating incremental sales opportunities for vendor clients. Vendor Finance and its clients are able to draw upon the financial and technical expertise of the Australian Structured Finance Group - a member of the Australian Equipment Lessor's Association - with nearly twenty years experience in structuring and managing major equipment finance facilities. The "multiple undisclosed underwriter" approach taken by Vendor Finance overcomes the limitations usually associated with relying upon a single funding source - so often the downfall of outsourced vendor finance programs. In order to offer a true "value added" service and to eliminate any potential conflict of interest, Vendor Finance has historically offered support to only one competitor in any particular equipment market. This ensures the vendor supported by our programs gains a true funding competitive advantage in the marketing of its products with the finance program designed to differentiate it from its competitors. As an efficient marketing organisation, we are able to provide "proactive" sales support through the provision of competitive funding solutions designed to generate incremental sales. This is not merely rhetoric as experience has demonstrated incremental unit sales are achieved through vendor finance capabilities.
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