Although the stability of the industry’s finances remains uncertain, industry investory Roberts Bass says he has optimism for the future.
“We are starting to see signs of stabilization and improvements in the economy and financing markets for aftermarket companies. It will continue to be challenging to get financing for growth in companies over the next year or two. But, it will certainly be easier than it is today, and easier than it was six months ago,” says the head of Automotive Aftermarket Banking for BB&T Capital Markets.
He and colleague and Pete Loescher, Manging Director of BB&T’s Supply Chain Finance Group — also known as vendor trade finance — presented “Current Trends in Financing for the Automotive Aftermarket,” on Wednesday, Nov. 4 from 9-10 a.m. at the Venetian. The presentation is part of the Automotive Aftermarket Products Expo, taking place Nov. 3-5 in Las Vegas, Nev.
The presentation touched on the current market for bank financing and alternative sources of capital. Bass and Loescher also reviewed Supplier Factoring Programs, explaining what they are and how they work.
“Supply Chain Finance has been a rather significant topic over last decade, the last five years in particular. Many large retailers have these, so many entities have been asked to participate, like Auto Zone, Advance Auto, etc. So, there are a lot of questions and we should review the concepts, articulate what these programs are, and explain why these programs are far more efficient financial mechanisms that factoring,” Loescher says. “We want to give an understanding of what is going on in today’s market, how we got here and what can we expect.”
See Loescher explain the diffrerence between suppy chain financing and factoring here.
Bass presented big-picture historical data about the industry, but also focused on other various forms of financing besides the supply chain — bank financing, mezzanine and private equity — for companies in the aftermarket.
General audience representation included mainly small- to medium-sized companies, with a handful of very large organizations.
This information “should appeal to the business owners or senior executives that have to worry about financial access and the cost of their capital, even if they are not the financial executive of the company themselves,” Bass says.
“I am not an economist and cannot say that interest rates will be here, but I can talk through some of the factors that will influence the future so people will be able to hear news about some of the aspects of the economy over the next 6-12 months and develop their own opinions on interest rates, availability of credits, etc.,” Bass says.
