A Direct Capital Trend Report: Acquisition

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Drawing on our in-house expertise, PointBlank will be chatting with segment managers and sales representatives at Direct Capital for enlightening looks at what’s going on in the world of finance. Today, we talk acquisition with Director of Client Services Scott Lynch.

With the thaw of New England’s long winter has come a thaw in the economy, one that Scott Lynch sees as an end to a frigid holding pattern that small businesses have been dealing with for years.

“Small businesses have been in a wait and see mode for the last 12-14 months,” he said.

The reversal of that trend has led to “steady increases” in the demand for everything from working capital to equipment finance. While that demand is up across the segment, Lynch and I focused in on startups and how Direct Capital itself has changed since weathering the recession.

Startups Rev Up

One of the largest increases within the segment has been in the number of start-ups and entrepreneurs seeking funding, Lynch said. Entrepreneurs in particular have bounced back in a big way.

“The entrepreneurial spirit of the country is coming back,” Lynch said, who said businesses are leaner and meaner after the recession. “They can be more efficient and do more with less.”

The demand for equipment financing is particularly stout among those businesses. The bigger deals have also returned, with customers seeking more equipment to get their business running well from the outset and perhaps even anticipating future needs.

Lynch also reiterated a call that’s familiar to those working at Direct Capital, urging small businesses to avoid putting all their debt into one place. Diversified debt helps a business thrive, he said.

“You never want to have all your eggs in one basket,” he said.

Surviving And Thriving

Driving brand recognition has been important to Direct Capital, which emerged from the rubble of the economic crisis of the last few years with fewer competitors. That left space in the market that the company stepped into, tackling working capital needs for everyone from a one person shops to Fortune 500 companies.

Making it clear to customers that Direct Capital has financing available—some $350 million in total for 2011—has been one of the biggest hurdles to clear. Thanks to aggressive efforts to get out in front of customers and the aforementioned thinning of the field of finance companies, Lynch said that has been a successful effort.

In the midst of a busy season, he said small businesses seeking the working capital* they need to stay afloat—or better yet growing exponentially—should at least explore Direct Capital.

“This is the time to give Direct Capital a shot,” Lynch said.

That’s our report from our corner of the acquisition world. We would love to hear your feedback.

Photo credit to tripek at http://www.sxc.hu/photo/112426

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*Working capital not available in the following states: AK, DE, ND, VT