Vanessa Merrowell

In 2022 our commercial pipeline included equipment offers whose final payments depended heavily on supplier estimates of future resale value. The credit team could identify the assumption, but it was often challenged late, after customers had planned around the initial quotation. I asked for a review of 180 proposed transactions across three equipment categories. The purpose was to distinguish what we knew about the secondary market from what a supplier expected a well-maintained machine to fetch.

The review found 46 proposals where independent evidence did not support the residual embedded in the offer. Regional sales leaders argued that changing terms would undermine relationships they had spent months developing. They were right about the commercial cost. I decided that we would absorb the cost of explaining the revised offers and would not treat the original pipeline value as committed business. Customers could consider a different repayment profile, additional initial contribution or a different equipment specification; none of those options was presented as universally preferable.

Credit and asset specialists recorded the evidence behind each revised value, including removal costs and the condition assumed at sale. Commercial colleagues joined the customer discussions rather than transferring difficult conversations to credit. Of the 46 affected proposals, 29 proceeded on revised structures, nine customers selected another provider and eight deferred the purchase. Those figures describe decisions, not realised credit performance: most agreements had not reached maturity by June 2026.

The immediate result was lower expected origination volume and a clearer explanation of the risk we were willing to take. We changed the quotation process so that material residual assumptions were reviewed before customers received an indicative structure. I would involve service engineers earlier next time. In several files, their knowledge of replacement components explained more about the likely resale market than another comparable listing could.

Our return process had allowed equipment to move from a customer's premises to a storage facility before all condition evidence was agreed. When damage was later recorded, both parties could reasonably question when it occurred. During my chief operating officer tenure, I reviewed 28 contested charges among 160 completed returns in an annual cohort. Several files contained detailed photographs but an incomplete chain of custody. More images were not going to repair that gap.

The operations team proposed a stricter checklist at collection. I supported that change but also authorised a jointly witnessed inspection for specified high-disagreement cases, with an independent assessor where necessary. Finance colleagues questioned the additional expense and the possibility that customers would learn to dispute every charge. I chose a defined referral criterion rather than automatic escalation: the dispute had to concern a material condition finding whose timing or technical interpretation could not be settled from the original record.

We tested the process in two service regions, trained collection partners and provided customers with the condition record before the equipment moved. We retained a separate decision owner for any charge so that an inspector's observation did not become an unexplained invoice. In the next comparable annual cohort, 13 of 172 completed returns had contested condition charges. The equipment mix was not identical, so I did not attribute the whole reduction to the process change. We also checked whether unresolved returns had simply fallen outside the denominator.

The enterprise gained a more traceable account of the asset's condition and a better basis for discussing responsibility. The revised process cost more per inspected return. I consider that cost justified, but I would have measured assessor availability sooner: a technically sound escalation route can still delay a customer's next investment when only one specialist is available locally.

A proposed supplier agreement offered us a substantial referral pipeline across a new equipment category in 2024. Its commercial attraction was clear: a single relationship could introduce us to customers we would otherwise reach one at a time. The proposed terms also required exclusivity within defined applications. Our team estimated US$95 million of annual originations, but the estimate assumed a conversion rate that had not yet been demonstrated with our customer base.

The business development director favoured accepting the arrangement with an early termination clause. My concern was that termination would not remove obligations attached to contracts already written, or restore alternative relationships we had allowed to weaken. I asked the team to identify the customers for whom the proposed equipment was unsuitable despite an apparently attractive finance offer. That exercise exposed differences in maintenance coverage and installation requirements that the volume forecast had treated as minor exceptions.

I declined the exclusive arrangement and proposed a twelve-month, non-exclusive pilot capped at US$20 million of originations. The supplier accepted a smaller set of applications and retained the ability to work with other financiers. We gave up preferred commercial terms and a prominent position in its sales process. In the pilot, 64 applications produced 37 funded transactions totalling US$14.8 million. The unfunded applications included customer withdrawals and our own declines; we did not classify every lost case as poor credit.

The pilot gave us evidence about service coverage and conversion without committing the whole channel strategy. It did not prove the category could support national expansion. I would change the initial negotiation by involving our customer administration team before the draft agreement arrived. They identified document and installation dependencies that would have been expensive to discover after signing. The lesson was to price the operational freedom we were surrendering, not merely the referral volume we hoped to receive.