What should F&I Managers look for when choosing a Lending Partner?

By: Michael Hutchison  
February 22nd, 2019

Choosing a Lender Partner

Finance and Insurance (F&I) Managers have one of the most important and difficult positions within a dealership.  This is predominately due to the amount of dependency the dealerships’ growth and income has on the finance department.  A typical day for the manager in a high-volume dealership may consist of maintaining a “finance pipeline” of more than 20 or 25 active deals, which may require as many as 3-5 daily touches to ensure they efficiently keep the equipment sale moving forward.

Obtaining Finance Approvals as an F&I Manager

In addition to managing the pipeline, it’s not uncommon for F&I Managers to be solicited by up to 3-5 lenders per week attempting to earn their business.  When this occurs, the F&I Manager must interview, review, assess and determine whether they would or could become a “lender-partner”.  The end-game with this exercise is to partner with the right kind of lenders that will make it possible for the dealership to obtain consistent and timely finance approvals in order to sell and move as much equipment as possible.

Lender Partner Considerations

Having worked with lenders and F&I Managers for more than 25 years, I believe the most important factors and questions an F&I Manager should ask and consider while choosing lending partners are:

  1. Are they reputable?  If I begin placing my customers with this lender, am I confident the lender will provide a level of service to my customer that reflects positively on both me and our dealership’s expectations?
  2. Are they consistent?  If I begin utilizing this lender as a primary source, am I confident its origination process will remain consistent, including adherence to credit guidelines, response times, pricing, loan documentation and funding timelines?
  3. Are they committed to our relationship?  In line with the above consistency concerns, if I begin building a steady book of quality business with this lender, am I confident it will remain committed to me?  Will it stay with me and the market in which I finance and be there for the long-haul?
  4. Are they efficient?  If I utilize this lender, am I confident the origination/funding process and staff will help me become more efficient and productive?
  5. Is customer service important to them?  When I utilize this lender, am I confident I can count on it to treat our mutual customer with the same level of respect we present?  Will they be valued in the same manner as we value them?
  6. Can I build a long-term relationship?  If I begin to utilize this lender, will I be able to consistently meet with its reps to develop solutions for on-going business needs as well as new areas?
  7. Do they have specialty products?  If I begin to utilize this lender, will it complement my suite of existing lenders by providing niche financing in one or more of my A, B, C or sub-prime Credit Tiers?

In conclusion, from an F&I Manager’s perspective, the lender partner must have experience in the specific industry being served, needs to provide a consistent and seamless process from beginning to end, and must understand the mutual value they offer our customers.

About the Author

Michael “Hutch” Hutchison is a 26 year veteran in the transportation finance & insurance industry, in which he has held various sales & leadership roles. His experience also spans across to the F&I desk as he was the Director of F&I for a large dealer group with more than 25 locations. Hutch has been with Amur Equipment Finance (AEF) for more than two years and is considered a Top Achiever for the company.

 

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