When small business owners lease essential use equipment, the process should be as quick and easy as it is for consumers making a purchase at retail. That’s not often the case, though.
A FinTech company that focuses on changing this dynamic is gaining ground in the marketplace and has earned new funding from investors.
Clicklease, which provides payment solutions in the commercial equipment space, announced Aug. 31 that it closed $63 million in Series A funding led by Sandlot Partners. Founder and CEO Bart Longson said this will enable the company to continue to improve its technology and expand its team.
“Our goal is to improve the customer experience to those folks and help our selling equipment partners to have a solution that they can offer to small businesses that is more consumer-like in the process, very quick and can be done on their mobile,” Longson told PYMNTS.
An Industry Ready for Disruption
The problem, he explained, is that the equipment leasing industry is mature. It has been slow to adopt technology and has focused on a hands-on, human-involved process.
Even during the digital shift accelerated during the last 18 months by the pandemic, the equipment leasing space hasn’t changed very much.
Clicklease, on the other hand, has developed proprietary algorithms that allow it to give instantaneous decisions.
The pandemic has caused supply chain issues for those in the equipment leasing industry, triggering concerns about having product to sell. Clicklease has given payment relief to some customers to help them through those problems.
For the most part, though, the industries the company serves have done well over the last 18 months.
“We’re providing financing for essential use equipment, and this equipment really generates revenue month in and month out,” Longson explained. “The payments that they’re making to us are really directly correlated to the revenue that they’re creating each month.”
Buyers, Sellers Needing Capital
Clicklease focuses on equipment up to $25,000. Its leases enable small- to medium-sized businesses (SMBs) to buy the equipment with a simple payment that they can directly attribute to their revenue rather than using cash or credit lines.
“Instead of tying up your working capital in a piece of equipment, they are able to use us for that purpose and that piece of equipment,” Longson said.
The customer, whether a contractor or a manufacturer, can then immediately generate revenue with that equipment, keep their cash or credit for working capital, and invest that working capital in marketing or anything else they need to run their business. Businesses of this size often must make decisions with their capital availability.
Most of the product Clicklease finances previously would have been financed with credit cards or with cash — the entrepreneur’s own or that of friends and family. So, the company helps someone trying to get the first piece of equipment they need to start a business as well as existing businesses that don’t want to tie up their other sources of capital.
For Clicklease’s selling partners, this payment option helps them close transactions they may not have closed before. Commercial equipment finance can be a value-added sales tool and Clicklease delivers instant approval decisions and same-day funding.
Funding to Improve Customer Experience
With its own new funding, Clicklease plans to invest in boosting the customer experience. That means improving its technology, its application process and its products in general.
“Obviously the more simple it is for the customer, the more complex it is behind the scenes from a technical perspective,” Longson noted.
The company will also expand its team, adding salespeople to go out and find more selling equipment partners and offering the financing to their customers.
The goal is to make transactions simple. Entrepreneurs are busy in their day-to-day lives running a business, and they don’t want to have to mess around with financing for the equipment they need to get back to running their businesses.
“That’s really what Clicklease is bringing to the marketplace,” Longson noted, “is the ability to get instantaneous decisions and transact immediately and do point-of-sale financing for small businesses at the commercial point of sale.”