Independent Banker - February 2018 - 61

to make it as convenient as possible
for their customers, " Buchanan says.
" As a result, customers think, 'I don't
have to go elsewhere to get fi nancing.
I can do it right here.' However, in
many cases, manufacturer and vendor
fi nancing programs aren't always the
best deal for the customers. "
Larger vendors and suppliers
often offer leases through money
center banks. In this case, apart
from the potential lost income, the
danger for community banks is
that equipment leasing becomes an
entry point for competitors to poach
commercial customers.
As long as the market is there,
developing an in-house leasing program
can have a number of benefi ts
for community banks. It can prevent
existing commercial customers from
going elsewhere for their equipment
fi nancing needs, such as money
center banks, and mitigates the risk
of those customers switching to the
other bank entirely.
It's also more convenient for
commercial customers, who will
be able to deal with one fi nancial
institution for all their fi nancial
needs. Community banks earn
interest and fee income from
equipment-leasing loans, and it's also
a point of difference that will make
them stand out from competing banks
in their communities.
So, it could make a lot of sense
for community banks to offer
equipment-leasing options to commercial
customers-and to make sure
those customers know about it. As
Buchanan says, " The message from
community banks to their customers
should be, 'Don't let your vendor be
your lender!' "
Turn leases into loans
For community banks that don't want
to create their own leasing programs,
or don't feel they have the resources,
there is another option. BancLeasing,
an ICBA Preferred Service Provider,
offers a program that allows community
banks to offer equipment
fi nancing to their customers, either
as a lease option or a loan option,
enabling the customer to decide
what makes the most sense for their
business. (Either way, the fi nancing is
booked as a loan.)
" We enable the bank to capture
" The message from
community banks to
their customers should
be, 'Don't let your vendor
be your lender!' "
-MARK BUCHANAN, BANCLEASING
business that they are not currently
getting, " says Buchanan.
Pinnacle Bank, an $850 millionasset
community bank in Elberton,
Ga., became part of the BancLeasing
program two years ago when it tired
of third-party vendors capturing
business that bank staff felt they
should have retained. Since then, says
senior vice president John Grissom,
" We have found opportunities that
we would have not entertained due
to technical issues as to the collateral,
as well as opportunities driven by the
borrower's or lessee's need to try to
expense more of the payment. "
Washington Trust Bank, headquartered
in Spokane, Wash., with assets
of $6 billion, is a 10-year BancLeasing
program participant. Jay Lewis, commercial
group manager for the bank,
says having a business partner like
BancLeasing allows Washington Trust
Bank to provide seamless lease fi nancing
and gives the bank " another arrow
in its quiver " in meeting the fi nancial
needs of its customers and deepening
its relationship with them.
William Atkinson is a writer in Illinois.
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Independent Banker - February 2018

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