Cessna Finance Corporation
Cessna Finance Corporation has changed its strategy from trying to grow as a finance company in its own right to supporting Textron’s own products. Thomas Low, president, and Perry Bridges, vice president international sales, explain their new apporach.
The last few years have seen big changes for many lenders. But few finance companies have changed as quickly as Cessna Finance Corporation and still managed to keep closing deals.
Three years ago Cessna Finance was willing to finance any manufacturer’s assets and would compete for deals with other lenders. Now – although they are still actively lending – they are focused on helping their colleagues at Cessna Aircraft Company and Bell Helicopter sell aircraft.
One of the biggest changes to the company has been a $500 million credit line provided by the Export-Import Bank of the US (Ex-Im) which was agreed last year. Ex-Im Bank is the official export credit agency of the US government and exists to help US companies export products by guaranteeing customer finance.
Whilst it a very reliable – and often a relatively cheap source of finance – many business jet buyers are put-off by the time it takes to close export credit loans. This is not a problem at Cessna. Cessna Finance is able to lend to customers directly. It then gets repaid by US Ex-Im. In fact customers only deal with Cessna Finance.
“We are able to do this because we have the credit teams and approved processes,” says Perry Bridges, vice-president, global sales at Cessna Finance, “and because we have the experience and track-record to prove it.” He says that Cessna Finance’s credit team can make quick decisions because the manufacturer already knows its customers well.
Thomas Low, president of Cessna Finance, believes this experience is one of its key strengths. “We have been doing this for over 50 years, and have financed aircraft in over 70 countries so we can help customers find the right deal for them,” he says. Cessna Finance says it has helped, an astonishing, 183,000 customers.
Cessna Finance has been financing internationally for 30 years and 75% of its current lending is abroad. As well as its Wichita head office, it has several remote offices including Sao Paulo, London and Singapore. It has about 80 employees in total and a $2.5 billion aircraft (fixed wing and rotor) portfolio.
Both Low and Bridges say that more finance is becoming available. “Good credits can get finance relatively easily,” says Bridges. “But some borrowers are still finding it hard particularly outside the US.”
All business jet manufacturers have people whose role is helping customers find finance but Cessna is the only with a dedicated finance subsidiary which will actually lend money. “Our terms are not necessarily cheaper than others but we do have: knowledge of the market and can nearly always close deals faster than anyone else,” says Low. “We understand the assets really well. It is not a problem for us to have to sell a pre-owned aircraft for example.”
Low is keen to point out that Cessna Finance does not view banks as competitors. “We like to work with others lenders and if we know of better options we are happy to put customers in contact with them- particularly in the US. We want Cessna and Bell customers to get the best deal,” says Low.
Rather than looking to win every deal Low says his priority is making sure that sales do not fail because of lack of finance. He adds: “We work for Cessna and Bell so if we lose an aircraft delivery due to financing we really care.”