US banking giant Wells Fargo & Co. expanded into Canada more than half a decade ago with a focus on building out a lending portfolio for commercial and corporate clients.
The company wants to be the financial provider of choice for Canadian channel partners, offering its expertise, user-friendly online portals, global reach, as well as numerous customizable products and services, to help businesses grow and manage their growth.
“As a key financial partner to the channel community, Wells Fargo provides not only financing options, including ways to reduce interest expenses, free up cash flow, and extend payment terms, but it also helps improve system efficiencies within businesses and foster seamless transitions between acquisitions and sales,” Terry Moore, vice president of business development at Wells Fargo Capital Finance, tells the crowd during a workshop at CDN’s own Top 100 Solution Provider awards ceremony on Apr. 25.
He points to four key Wells Fargo features that are beneficial to Canadian partners: the company as a whole and its global reach; its expertise in channel finance – it is the leading provider in North America with thousands of reseller, vendor and distributor relationships across various levels – as well as its ability to offer customized solutions for businesses with different models and systems, and an online tech portal that is user-friendly and provides additional analytics capabilities with real-time updates.
“We look to understand your business – where you are, where you are going, where the gaps are, etc. – and create a solution customized to your business needs that works now and sets you up for the future,” Kristin Godwin, director of business development at Wells Fargo, explains. “We offer access to different financial products and bring different levels of expertise to your door when needed.”
One of the company’s key offerings is a channel finance service that helps align distributor and vendor payment terms with a typical sales cycle, and gives them more time to make payments. A typical term between vendors and distributors is between 45 to 60 days, Godwin explains, but an average cash cycle can range from 50 to 75 days.
“Even if your end customer doesn’t pay you within the negotiated times, you still have to pay your vendor or distributor, which means you’d be financing that on your own line of credit with your distinct financial provider,” Godwin continues. “So what Wells Fargo’s channel finance does is really bridge that gap. It allows you to push back those payments to 60 days, as well as leverage our extended pay services, which can push out payments by an additional 30 days. It understands that time is key for partners.”
Moore adds that Wells Fargo is “flexible and proactive as a financial partner” and will “work with you to extend that payment period if more time is needed.”
He also notes that with the marketplace undergoing constant consolidation, Wells Fargo can provide term loan financing in an acquisition circumstance, as well as act as a middleman in negotiations without taking away any control.
In 2016, Moore continues, Wells Fargo financed approximately $750 million in the Canadian technology industry through the channel, and now has over 100 partners in the country in terms of credit lines. It covers the whole spectrum, from small to medium-sized businesses (SMBs) needing as little as $100,000, to large corporations in need of $3 million and more.
“With SMBs, for example, we help them grow their business by providing financing and bringing them more programs to help them along that journey so that they can go from $300,000 to $3 million to $10 million,” he adds.
While there are no billion-dollar transactions in Canada yet, Moore is hopeful they will come.