Optionality Still Matters

A KEY ASPECT of the equipment finance value proposition has always been optionality. Asset use or asset ownership? Proactive or reactive technology planning & management? Cash down payment or comprehensive financing? The market landscape has evolved since the beginning of the Covid-19 pandemic, and therefore has challenged us to expand the key levers of optionality to continue delivering for customers. 

Role of Speed 

What hasn’t changed is this: All deals are still not created equal. The distinction between situations that favor either speed or structuring has only widened. Small ticket transactions require speed. Complicated transactions require time and structuring expertise. 

With customer needs in mind, Healthcare Financial Services focused on our small ticket “Flow” business. Spearheaded by digital and marketing, we empowered our GE Healthcare industrial colleagues to independently quote financing transactions. This new enablement changed customer turnaround time from approximately 24 hours to an instantaneous response and gave the HFS commercial team about two-and-a-half hours a day back to redeploy into structured transactions. 

Decision Point Flexibility 

The complexity of financial planning and analysis has increased since the first half of 2020. As macro environments rapidly change and long-term outlooks require frequent modifications, a premium is placed on flexibility during the budgeting process. 

For our customers, one of the most important options provided by equipment financing is the ability to acquire equipment today while deferring a return, purchase or renewal option until a later date. There is a bit of a twist. In addition to traditional financing terms of 36 to 72 months, customers have increasingly requested to explore terms between 12 to 36 months; broadening the period for a “permanent” decision. 

A Single Payment 

Once a customer decides to move forward with a solution, the conversation often quickly transitions to payment alternatives. In many situations, it is no longer enough to offer a single monthly invoice for equipment financing. In the health care industry, this means widening the scope to include equipment financing, service and software in one single payment. Billing optionality is proving to be an important value driver to reduce complexity. 

Closing 

Optionality not only matters, it is more important now than ever. To succeed, equipment finance companies need to move at the same speed, if not faster, than our customers to anticipate their needs and deliver options that are new and unique.