Northward Bound: Why Invest in Canada?
Date: Feb 19, 2014 @ 07:00 AM
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Financial Pacific Leasing
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CCG Commercial Credit Group
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First Financial Corporate Services
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First Financial Corporate Services: Meeting the Needs of U.S. and Canadian-Based Customers
Bill Heston, Country Manager for Material Handling Equipment, notes how entering Canada was based on identified cross-border relationships, and a unique opportunity to provide fair market value leases.
Equipment Finance Advisor: Please tell us about the timing behind the decision to enter the Canadian market – when did you enter the market and what was the driving force for First Financial Corporate Services to “make the investment in Canada” in regards to the material handling industry?
Bill Heston: Prior to entering Canada, we had established relationships to provide equipment financing for two of the big three U.S.-based auto manufacturers. And, more recently, we were awarded contracts to provide material handling equipment financing for these same two companies in Canada. We also had recently signed a contract with a Canada-based automotive supplier. These opportunities created the need for us to provide financing in Canadian dollars and so it made sense for us to create a Canadian entity – FF Canadian Leasing – due to the tax and regulatory issues involved in doing business across the border. So the decision was based on the fact that we were already doing some business in Canada and we were going to start doing more and more business there. We see many opportunities for us to expand our role in Canada in the future. Today, we are providing material handling financing in both the end-user and vendor segments in Canada, and we expect both sides of the business to grow substantially over time.
Equipment Finance Advisor: Have you noticed a cultural difference in doing business in Canada? What differentiates FF Canadian Leasing from its competitors?
Heston: More doors have certainly opened for us now that we operate under a Canadian entity because Canadians prefer to do business with Canadian companies. But, other than this fact, culturally it is very similar.
Canadian companies are very interested in fair market value leasing as they have not been able to access this type of financing from the Canadian banks. Offering fair market value leases opens all sorts of doors for us and provides us an immediate competitive advantage in Canada.
Additionally, the fact that many Canadian banks are not interested in writing fair market value leases has created a secondary opportunity for us originate business beyond our own direct calling efforts. We are also working with two major Canadian banks to provide fair market value leases for their customers and we will be working closely with these banks in the future as well.
Lastly, we are focused more on the middle market (not small ticket), financing multiple pieces of equipment under multiple lease schedules for our customers. This provides us with an advantage as we are able to commit to larger relationships.
Equipment Finance Advisor: What were the major issues you identified as critical in order to successfully penetrate the Canadian market?
Heston: First, creating a Canadian entity was critical for many reasons as I mentioned. The ability to provide financing in both U.S. dollars and Canadian dollars is also critical. Lastly, effectively offering the fair market value lease product is a critical way for us to differentiate ourselves in the Canadian market.
Equipment Finance Advisor: How would you describe your commitment to the Canadian market?
Heston: We are absolutely committed to doing business in Canada. There’s a tremendous amount of manufacturing in Canada and we view Canada as a tremendous growth opportunity. We saw a great potential for our product offerings in both the trucks as well as battery and chargers. Our commitment to this market is further indicated by not only forming a Canadian entity, but also setting up our first office in Mississauga, Ontario, Canada. I will also tell you the Canadian people are a pleasure to work with – they have a very positive outlook in Canada and we are excited to have the opportunity to enter this new market.
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