Elson: I think it’s also worth noting that Wells Fargo holds the number one or two spot in terms of its share of the middle market. Whether it’s the channel finance side going out and marketing to those resellers to bring them into those programs as a client or on the supplier finance side where we are going out the supply base for those large clients, the chances are good that these prospects are already a Wells Fargo client. If they aren’t a client, we have a robust offering as a bank, which can be a compelling aspect of the decision making process. In addition, we have extremely talented and seasoned professionals. I think the people we have on board is another competitive advantage we enjoy.

ABL Advisor: Earlier this year, we noted two press releases concerning the establishing of channel finance programs for both Dell and AT&T. Is there anything you would like to share regarding these two programs?

Wagner: We all heard a great deal concerning the take private effort, so I think it’s no surprise that Dell would look at embracing other types of financing. That was the catalyst to expand this particular program and we were very happy to be selected as one of Dell’s two primary channel finance sources since they are one of the top vendors in our segment.

AT&T opened up a new channel for us within the technology space since it’s more of a mobility, cloud and managed services driven product compared to Dell, which is more of a product flow-out through the technology channel. Historically, our product has been more associated with programs like Dell. Both are examples of our specific niche industry embracing outside financing and establishing channel financing programs. Both announcements were very big for us and demonstrate our commitment to this space.

ABL Advisor: What in your estimation is driving the demand for these programs in today’s economy?

Elson: While there are no league tables, a rough estimate of market penetration for supplier finance programs would probably be less than 10%. But if you’re a corporate entity and you have an opportunity to one, push out your payable terms and achieve better than average working capital metrics and two, offer a price efficient option to your supplier base … these programs offer a very compelling case. Most companies eventually get to the point of wanting to do it and it becomes a matter of prioritization. The various organizational functions – treasury, procurement and payables – need to buy into the concept.

We do see that once a given player and a given industry sector adopts a program; it tends to bring about a domino effect because industry peers benchmark against what their competitors are doing. Sometimes there is crossover in the supplier base as well. If I’m selling commodity A to large corporate buyers A and B as the supplier finance program, then I may call on corporate B and ask, “Do you offer the same program?” From a supplier’s standpoint, these programs are advantageous since they offer a financing rate that is reflective of the buyer’s credit rating. If, for example, you are a middle-market company selling to a large multi-national investment grade company, you understand that this can bring about a significant reduction in the financing cost of that receivable.

ABL Advisor: In closing, is there anything you would like our readers to know about the programs you offer?

Wagner: From my perspective, I would like people to understand that we are a leader in this very specialized niche and we are in a unique position, offering all three programs: supplier finance, key accounts purchase, and channel finance. Additionally, we bring the strength of Wells Fargo and all of the products and services that the bank offers.

Elson: Through our supply chain finance programs, we are able to serve all of the working capital needs the market may have – from supplier finance to channel finance. If the market is moving in a particular direction and there’s a financing technique that’s evolving, we want to stay ahead of that curve.

Additionally, we continue to evolve our programs to serve industry sectors that have yet to adopt a program. Once we get started in those sectors, I’m confident the programs will catch on and in time, will be readily accepted.