Once Upon a Time …Jun 8th, 2012 | By Editorial Staff | Category: Jack Schrock's Blog
… financing for T & R equipment was hard to find and even harder to qualify for. Recalling an earlier blog, I mentioned that the Holmes rep was often called upon to find financing for a willing wrecker buyer. So, speaking with a loud voice, the sales reps convinced management to come up with a reliable source of financing and we practically guaranteed increased sales.
So they did and we did. Holmes financing was provided by a well known, well established national credit firm with years of experience. And, the process was simple. Fill out the paperwork and send it in and, yippee, in jig time approval was given. Everyone was overjoyed as sales increased across the country. Potential buyers who had been standing at the ready for years all of a sudden had a reliable source of financing. So how was this possible? Well, there is more to the story.
After a short while, we all had an aha moment when too many of those sales went sour and hit the repossession list, as some had never made even a single payment. And, believe it or not, it was the Holmes Company that had the responsibility to track down and recover all those nice, new wreckers that were no longer either nice or new. Worse yet, there were some distributors who began to fail as our financing tightened up.
Seems as though this national finance company that signed on with Holmes was not even checking credit background on these buyers because Holmes had “kissed” the paper, which is another way of saying that Holmes had guaranteed payment on those sales contracts. So our money supplier had no risk and did nothing more than provide the funds to make the new sale.
This was just great while it lasted, but tracking down all those repos was more trouble than we had expected. And speaking of failed distributors, yours truly repossessed 20 new wreckers from one of those failed wheeler-dealer distributors and that, my friends, is why I became a wholesale dealer in Texas.