First National Financial LP

Client looks for advice to make informed term decision

Feb 17, 2016

First National goes deep on analysis to help client choose the right funding option

Key idea: advice, relationship focus, specialized expertise

In this case, it wasn’t whether the client was going to choose First National; it was more about how First National could deliver value beyond the deal, truly acting as a trusted advisor that can provide specialized expertise.

What was the client trying to achieve?

Approaching his second deal with First National, this apartment property owner was unsure about how to determine favourable terms for his loan. He wanted to know which factors to consider in deciding between a five or 10-year term.

It was clear that he wanted expert advice on how to proceed. “I felt like I already had the deal,” says Russell Syme, Assistant Vice President Commercial Financing. “He was looking for something extra from me, and I knew it was an opportunity to build the next level of trust and faith in the relationship.”

Putting the deal together

Syme began putting together the research. In his mind, the client needed to consider several factors beyond just costs when making the term decision.

Syme went deep on the analysis. He started with the present value calculation, showing the five-year savings versus the 10-year spend. He also evaluated the rest of the client’s portfolio (five apartment buildings) and additional portfolio maturities on the horizon. Finally, he gauged the client’s risk tolerance.

“The client had been dealing primarily with the banks and had a long-standing relationship with one particular institution,” says Syme. “There usually isn’t a lot of consistency in relationships because of high turnover, and most account managers are generalists instead of specialists. I made sure to leverage First National’s and my own extensive apartment financing expertise when preparing and presenting the analysis document and advice.”

In the end, the client chose a 10-year term, even though the numbers suggested better savings from the five-year option. But the client’s risk tolerance, plans to hold the property long term and upcoming portfolio maturities suggested that a 10-year term was a more strategic choice.

Why First National?

For Syme, trust and respect are everything, so he leads with expertise and competence. That was definitely his objective with this client. He wanted to make sure that his client felt heard and knew with utmost certainty that this wasn’t just about getting a deal done, but getting the deal done right.

“Coming in, the client was used to the ‘bank experience,’ so he figured that I wouldn’t really know how to advise him. I definitely changed his perception as to what’s possible in terms of advice, expertise and relationship,” says Syme.

Syme points to one example specifically in the progression of the deal. A competitor approached the client offering a lower price. Syme saw it as an opportunity instead of a challenge. He met with the client face to face and walked him through the difference between how the competitor and First National fund loans. In this case, the competitor’s price was for a loan that didn’t allow pre-payments, which the client had prioritized in previous deals.

“It was a classic ‘apples to oranges’ scenario,” says Syme. “I could have offered similar pricing if I removed the pre-payments. But because I had a relationship with the client, I knew pre-payments were important to him.”

When Syme sat down with the client to review the two quotes, he saw it as an opportunity to empower the client with education. It also gave him a chance to ask the client to reflect about his experience with First National, having completed two deals.

“It didn’t take any prompting. The client recognized the value of what First National provides – relationship, trust, transparency and knowledge. It trumps price almost every time,” says Syme.