Do Personal Relationships Still Matter?

An industry executive asks if Fintech models have made personal relationships obsolete

Here we go again. It seems like Groundhog Day for the equipment financing industry. 

Having just turned 30 years old in February, FSG Capital has now rolled through four economic downturns. Our business was started in 1991 at end of the “Gulf War” recession. Then we experienced the “9/11” recession in 2001, the “Great Recession” in 2008/2009 and now the “COVID-19” recession.  

It’s times such as these when business models in our industry are tested. While volume and origination channels are critically important, at the end of the day our businesses represent a simple risk and return proposition. Too much risk almost always leads to losses. Many seem to forget this fundamental rule only to be reminded in a down economic cycle. Many lenders/lessors have learned this lesson the hard way, sometimes more than once.  

Relationships matter 

So how do independents survive, and thrive, in this ultra-competitive marketplace? Relationships. At FSG, we are proud that some of our closest relationships are with fellow ELFA members. As a small independent, a big part of our success has been the long-term relationships we enjoy with industry pros. Another important strategy that never goes out of style, especially for smaller market participants, is to “know your customer.” Once again, relationships make the difference. While some customers are perfect fits for new Fintech models that may offer wider credit windows, speed or other “no touch” services, others crave the personal relationships and consultative benefits that are earned by industry participants that care to put in the time.  


This recession has been quite different from the others. A tested, open line of communication with key constituents, including co-workers, funding sources, customers, vendors and service providers, has eased the path for many. Having strong relationships has proven especially valuable in this economic downturn, as direct, personal communications have been highly valued by all parties. The best among us have relied on all relationship avenues to navigate this cycle effectively.  

What does the future hold? 

This latest recession will once again bring change to risky economic models. Unfortunately, some solid lessors have had challenges never imagined. Others were concentrated in industries that have been unimpacted by the pandemic. If your business has thrived, you should ask yourself, was this because of careful planning and underwriting or just luck?  Can you imagine a scenario that would negatively impact your key sectors? Would strong, personal relationships make managing this scenario easier? 

People often ask me if I would recommend a career in our industry for themselves or a family member. If they’re looking for a business opportunity that’s a path to quick riches, I tell them to look elsewhere. But even with the downturn in FY 2020, our industry has always proven extremely resilient. So spread the word to Millennial and Gen-Z candidates: The equipment financing industry is here to stay and will provide incredible opportunities to our next-generation workers who develop strong relationships with the goal to build a career, not just a job.  Yes, relationships do matter!