The equipment purchase market is one that reportedly is worth $1.6 trillion, with $1.1 trillion of these purchases being financed, as in not purchased directly out of the firm's own pocket. This represents an industry that survives on financing. And it makes sense considering the fact that all businesses need help getting the equipment to open their doors.
I spoke to the CEO of Currency, Charles Anderson, who runs the leading technology company for business equipment, to find out more about the equipment financing market, his company, and what changes are expected in the industry in the coming years.
Adam: Thank you for joining me today. Could you start by telling me more about what your company does?
Charles: Certainly. Currency is an organization that works to provide financing for businesses who need to purchase expensive equipment. This could be anything from a high-grade grill for a restaurant to a dentist's chair for a dental practitioner.
We hope to make securing financing easier than going to a bank because we are dedicated to enabling people to purchase what they need at an affordable rate without all the hassle of dealing with a more traditional lending institution.
Adam: Could you tell me more about this so-called 'gap in the market'?
Charles: The gap in the market is something we discovered some time ago. What a lot of people don't realize is that despite there being a potential half of a trillion dollar gap that financing can fill, this is actually ten times the size of any other emerging market.
With more and more people deciding to go at it alone and start their own companies, financing for equipment is only going to become more relevant as time goes on.
That's where we believe that Currency can come in because we are dealing with companies across the country. We are not confined to any specific locality. We intend on staying ahead of our competitors and maintaining our position as the number one equipment funding platform.
Adam: Why are there changes afoot in the industry?
Charles: The changes coming to the industry are happening because of a generational shift. Don't get me wrong, this industry has always existed and always will exist for as long as private businesses exist. The Baby Boomers formerly running these companies are handing them over to their younger counterparts.
The younger generations want to do things differently. They are moving online and they want to be able to easily manage equipment purchases from the comfort of their offices. And they want things to move quickly. That's crucial, and it's something that Currency focuses on.
Adam: Do you risk running into a crowded market?
Charles: I don't believe that's a risk at all. Yes, there will be other organizations attempting to do what we do, but we believe there's a lot of untapped potential. Many businesses that can afford equipment outright will still choose to gain financing because they want to free up financial resources to spend elsewhere.
The sheer size of this gap in the market means that there's little chance of a crowded market becoming a problem, at least in the next few years.
Adam: How does a financer in this niche have to stand out from the crowd?
Charles: For any company to succeed in this niche, they are going to have to do their research and understand what their target audience wants from them. We know that the generational shift has occurred and we know that this is only going to happen once every 20 years.
Currently, it's a painful process to go through to secure equipment financing. We are streamlining the process so what can usually take months to complete can be done in a matter of days. This industry requires on-demand financing with competitive rates at the point of sale.
It should be as easy as downloading something from the Internet.
Adam: And what do you think the future of the industry is ten years from now?
Charles: I believe that the future of the industry is very much in the same strain as the mortgage industry was at the turn of the millennium. It's a complicated market and anyone looking to compete has to be an early adopter because change is on the horizon. Currency is always investigating new ways to deliver a great service to our clients.
In the long run, I think that this market will function as a virtual exchange for buyers, sellers and banks to connect. Given the size, scope and necessity of this industry, we think that it's only a matter of time until technology drives this sector towards simplicity, transparency and efficiency. We have a strong edge to lead that charge because we have been bootstrapping for many years which has created a thoughtful and action-oriented culture.