By Jim Hogan, firstname.lastname@example.org
The retail industry is a bellwether for U.S financial health given that consumer spending is roughly 60%-70% of the economy. While the economy has sent mixed signals of late -- consumer confidence down, unemployment up -- consumer credit has swung up decidedly and leading companies in a wide swath of retail segments can point to positive year-over-year same store sales. This is prompting some retailers -- particularly discount stores--to begin opening new stores.
However, even relatively bullish retailers are proceeding with understandable caution. As part of this guarded outlook, more retailers are looking to work with specialty lenders with a deep understanding of their industry to serve as a long-term partner in growing the business. Retailers still want a competitive rate, of course. But their decision is not based solely on whether a lender can shave a few basis points off the interest rate. There are at least four areas where a specialty lender gives retailers a competitive edge.
Industry insights and relationships
It’s critical to have a lender that’s abreast of the current events and trends in the borrower’s sector. There will always be distinct competitive and economic drivers facing customers and a lender with retail expertise can draw on its wide experience to give counsel to the company on industry best practices. These lenders don’t waste the executive team’s time with a series of basic questions about the industry, instead they can begin with a substantive discussion about the specific business and capital requirements of the retailer.
A specialty lender is also “networked” to other specialists in the retail space. Thus, the lender can connect the company with professional specialists in the sector, such as investment bankers and accountants. For instance, many retailers whose leases were up during the recession sought counsel from experienced real estate professionals on how to negotiate more advantageous lease terms.