Our Small Business Snapshot series features photos that represent, in just one image, what the small businesses we feature are all about. Vernon Tirey, CEO of LeaseQ, a company founded in 2011 that connects businesses, equipment sellers and finance companies, explains how this image represents his business.
What goes into a cupcake? It takes more than just yummy ingredients. The recipe for success includes a blender for mixing, an oven for baking, a refrigerator for chilling, a case for displaying to customers and more. Equipment is necessary for business, whether it’s a restaurant, brewery, fitness center, doctor’s office, construction firm, transportation company or bakery, and when it comes to financing that equipment LeaseQ aims to be with borrowers every step of the way.
Before opening LeaseQ, I had just finished a successful turn-around project for a large consumer auto insurance marketplace, loved the marketplace business model and wanted to do it again. When I was introduced to equipment financing, I realized that I had discovered a dinosaur in the backyard — here was this huge industry called equipment financing, generating over $900 billion in loans and leases per year with incredibly manual processes.
I studied the industry, talked to several businesses, equipment sellers and lenders, and ultimately learned three things: The financing process can be very painful for borrowers; it's seldom done online — meaning that for this business to work, it would also need to be available in the equipment dealership, much like consumer auto financing; and very few finance companies have automated underwriting, so to provide instant quotes, we would have to have an automated underwriting engine able to capture the underwriting rules with the help of the lenders. I was lucky to find a CTO who had built three underwriting engines, and after a year, we had ourselves a platform.
Most marketplaces have two parties, a buyer and a seller. Equipment financing today requires that LeaseQ act as a three-party marketplace with borrowers, lenders, and equipment sellers. Managing this three-party system is certainly a challenge, but to add to that, we serve 30 equipment vertical markets — medical, oil and gas, retail, farming, construction, and transportation, for example — and you’ve got what keeps us up at night. Encouraging change in this industry is another challenge. Although the industry is ready and eager for change, adding automated underwriting, advanced analytics, and customer-focused strategies is a lot of change management for lenders.
The fun part of the job is really about helping companies grow. We love learning about the variety of businesses and the unique types of equipment being financed. In a single day, it’s not uncommon to play a role in financing a $50,000 dump truck, an $180,000 x-ray machine, a $15,000 oven, a $50,000 digital camera, an $8,000 car tire rotator, and several treadmills for a local gym. We hear the stories of struggle and success from our customers, and we get to help our nation's small businesses contribute to the economy.