On today's episode of the Dig, I am joined by Jeffrey Elliott, founder and CEO of Elevate Capital, and I'll let him introduce himself and go into his background a bit.
Thanks Johnny. Jeff Elliott here. Yeah. Founder and CEO of Elbex Capital. You know, we are a independent finance company focused on small business. All the way up to large corporations and governments, local and federal. We are journalists in equipment finance focused again on underserved markets, so. Most companies that are challenged these days with banks pulling back in the market. Place and looking for equipment financing. Especially true lease financing.
We're a good source of of funding for that. You know our markets. Are. All different types, a lot of underserved markets, energy markets, oil and gas, renewables, agriculture, transportation industries, corporate aviation, marine rail. But generally anything a business or government can use, we'll look at financing and we think there's a big marketplace available right now. With. Different things going on in the economy and the changes in in banking and focus on.
Primary bank customers and lack of transactional funding capabilities. Independents seem to be rising and and we're hoping to really take advantage of that and and help our customers out. We're also very digitally focused. So we're we're trying to implement the latest and greatest technologies to create a more fast, flexible and transparent process. Enable transactions to happen digitally. Utilize artificial intelligence.
Intelligence to to work with our customers in in ways they want to be worked with. We also pick up the phone and talk to people and go visit people just old school way. But we're utilizing technology where customers want to utilize it and making the process better, taking friction out of the equipment finance process. So those are some of the things that we're focused on at at elevex.
Actually no. That all sounds great, and I that was one of the things I picked up when I was first reaching out is, you know, beyond your experience in the industry as well as the the innovation side of it, the technology side of it, the things you guys are working. On to sort of bridge that work on that gap, especially in today where we spent so much of last year especially talking about artificial intelligence and what it can be and what it can do.
But translating into something usable for the equipment finance industry. What has that process? Been like for you? You guys, especially over these first few months as you've been getting going.
Really exciting. We're we're not all the way where we want to be yet, but we're we're implementing things, you know. Like this meeting here? I've I've probably got a a. A agent taking notes for me. So I can review the the call. We're implementing AI on our website. We get, you know, as a new business, we're getting a lot of inbound inquiries, right. And the AI agent will talk to the customers and and it's not out there yet, but it will be out there soon to.
Really. Get them. Get more information for us to respond to
Oh.
them. Now we will call them back. It's not that you're gonna deal with a computer, but you're you at least can get the right information in to us so that we can start out way ahead of the game and get back to you with what you're looking for and and who's the best person to. Talk to you. Right. Not, you know, most people want. They see me out as the face of the organization. Well, it's hard for me to call every single person back if someone's got a specific need.
Need and then I called him back and then I can bring the right person in to focus on it. AI can help me do that faster and I can get back to you quicker with the right information. So those are those are kind of cool things. We'll have AI agents doing sales for us doing, you know, lead generation, doing problem solving, analyzing documents,
Yeah.
comparing at least document against. A specific one for a customer versus our base document. What are the differences? What was negotiated? Those types of things, those things cost a lot.
Mm hmm.
When you hire lawyers to do it, and AI can do it in a much more fast and low cost kind of way. So there's all kinds of different things that we can do to speed up the process. Using embedded finance approach. So instead of the the old linear approach of, you know, credit application compliance credit. Proposal Doc prep. We're starting to work on all these things.
At the same time, because we're taking an embedded finance approach where we're gathering enough information that we can do more than one thing at a time and bring it all together and service the customer faster and quicker right when they want to be served.
So those those types of things are are really important to us from a technology side, but we're still a people first business, but we're still going to talk to people and when they want to be talked to, if they want to be served digitally, we're going to be. We're going to offer that. And and that's important. I know myself when I want to be served digitally, I find it annoying that I can't do that with a lot of companies, but sometimes I just want to talk to somebody and we're going to.
We're going to offer both, so we're going to be able to to do both for for companies and hopefully that. Mix of technology and people ends up in a better experience for for customers.
That makes a a ton of sense. And yeah, you hit on the two of the very interesting things there, the first one being the aspect of it where you know it's about being able to to get everything done at a a speed nowadays, especially in the modern consumer, even though these businesses aren't necessarily the. Consumers under themselves as like a, you know, AB to C. It's AB to B. But there's still a lot of that same mentality of this has to be done in an instant.
This has to be done immediately because I need to be able to to be on my. Way as a as a business just like I need to be on my way as a a customer and so kind of balancing that. We need this done efficiently, but we need to do things right on our end as a lender. So how do you kind of balance that when you're when you're thinking about when you're putting it together, when you're having these conversations with potential customers?
Yeah. Yeah. So a lot of it is. Think about some of the things that happen when you do. Let's just take a $5,000,000 transaction. So this is a larger transaction and a lot of people tell you well, you don't need all this technology for that. I I think you do and and the reason being is you know a $5,000, 000 transaction in a typical bank can go into the bank and. It could be like a black hole. You could go two months not hear anything back.
And the bank will tell you? Well, we're waiting on this information and if the salesperson isn't really if they're busy and they're not really on top of it and they think everybody's communicated properly, everybody's sitting there on their hands, waiting for somebody else to do somet. One of the things with technology. Can be constant contact on these things. Here's here's what we need to process this transaction. Hey, by the way, it'll reach out and say we're still looking for this invoice.
Voice or this information on the equipment or this financial statement or
Mm hmm.
whatever it is that we're looking for, are these questions answered? And so our systems will communicate with our customers and with our with our sales people and everybody communicating consistently and at the speed of of what's appropriate for the transaction at the time to move that transaction forward quicker, I don't need. The credit score of $5,000, 000 deal in 1/2 an hour now.
OK.
$30,000 deal. We're gonna do that in in less than half an hour, but on a $5,000, 000 deal I just need to be organized and keep things in communication and reach out to the different parties. Sometimes there's lots of different parties involved. We've got appraisers or inspections or all kinds of different things, you know,
Mm hmm.
residual value insurance or some something going on in that transaction. They're complex, right? Well, the technology can help manage that whole
Mm hmm.
process. You know can help you speed up your asset management process so you can analyze those assets. A lot of times, that's one of the things you're doing when you're doing a $5,000, 000 deal is you're you're analyzing not just the financial statements, but the asset itself. Well, you need that information. Technology can help you get that information faster and organized better. You only have so much time in the day to do everything so.
Bringing those technology assets to bear in the big transactions are gonna make them more fast and flexible and a better experience for the customer and meet their deadlines. And and we can manage our risk. It also helps us in terms of risk on concentration risk. So it let's just say we have $5,000, 000 transaction and we're only
Hmm.
comfortable with 2 1/2. Well, we didn't sell the other side of that transaction, right? So our technology is connected to our capital Markets group, which can immediately start going to the market saying, hey, we want to do this deal. Do you want to take 50% of it or 25% of it?
OK.
And we'll find other players behind the scenes that will add us up to five. $1,000, 000 and let us finish that transaction off the old school way of doing that is you kind of finished the deal. You take it down. You start putting together an underwriting package. It takes six months to do that. Or you gotta. It's just a lot of time to go talk to a lot of people, use technology to connect with more people quicker and get a quick know or or maybe then you focus on the maybes and not the no's.
Then you can get to that answer quicker and. Serve your customers so there's a whole bunch of things that that really improve the process when you utilize technology because you simply are trying to be in too many places at one time and you you can only do so much so that technology can can make some of. Those phone calls for you or could make some of those communications for you
Mm hmm.
really speed up the process. And and it's not just about delivering that credit approval.
OK.
It. Doing all the things behind the scenes to enable you to deliver that credit approval and close that deal. So it's it's different from the small ticket process, which is is just kind of systematically driven and quick, you're taking a bigger process and bringing the timelines down between all those little jobs that are built on each other and can be done at the same time as
No.
OPP. To linear again, you know some of those things. Asset management was down the list of things that you did. You know, on a on a deal, you ate a few weeks right before. Got started. We start right away on that. So it's it's a different approach. You'll you'll see it work better for customers because they just they they wanna know what's going on and you just consistently touch base with them. So they they know what they need to be doing. We know we need to be doing and everyone's connected.
Right. No. Yeah, that makes sense. How old that would would fit together, especially just, you know, condensing that timeline, smoothing that timeline out, making it easier for everyone, and then the the communication transparency part, which I do want to get into a little later. But there's one thing you brought up that I want.
To touch on because for me, as someone who kind of came into the industry fairly recently, it's been fascinating to discover just how many moving parts there are in the average transaction, right? You think about it from almost an outside perspective. You know, it's a deal. Selling piece of equipment that a lender's got to finance, but there's actually so many other moving parts to it. And so I, you know, kind of getting into that and sort of how you manage that process and make sure
No.
that kind of everything's running smoothly for. The stuff that's not necessarily your hands on directly.
Well, yeah, that that is. It's critical because. Equipment finance is made-up of a whole bunch of many businesses in many industries, right? And so a trucking deal is not the same as a construction deal and not the same as a corporate aircraft deal and and so forth. So all those industries and equipment types,
they all have nuances that are different. And so in dealing with dealers is different and dealing with dealer A and dealer B, you might have a total different program set up with both of them or no program
OK.
whatsoever. And is it new equipment or is it used equipment?
Mm hmm.
There's so many variables to to deal with. We all know what to do with those, but sometimes we we only got so much time in the day, so having systems in place to facilitate what you already know you need to do on certain transactions and have that taught to AI. So it starts doing it for you, and then you're you're still reviewing everything. They're not making decisions necessarily. That are final. They're doing some of the work so that you can.
Review it and make final decisions on transactions. I mean, we'll get to things where their auto scored or auto decision and and doing things where IAI will make some decisions,
OK.
but it's really not about the decision making as much as it is about facilitating making the process happen to go through all those different things that. Need to happen, you know. Are you? Are you looking at a A used equipment piece? What's the valuation there? Who should we be talking to? What are the comps in the marketplace? Well, our systems can do that a lot faster.
Than an asset manager having to make a bunch of phone calls or go through a bunch of old guides, you know, let's get real market information from the Internet. Let's find the right players to talk to on current valuation, and then let's have those conversations and put that those comments into an already populated equipment finance evaluation grid that AI did. Right, 'cause AI can take all that data. Put it grid together.
Right then, asset management can come together, come in and say, well, I spoke to Joe Smith at, you know, Crane rentals and it. And he said these cranes are really in demand because of XY and Z. And then put those comments in there, and here's what we found. And here's what we think the valuation is based on our conversation in the industry and the data that we gathered from all these various sources.
OK.
So it it takes a lot of friction out of it. In the old days, that's all done with spreadsheets and books and guides and and it's just it's hard to document it and you know. Asset managers are really smart people that know a lot about assets. They're not necessarily. You know authors and the best writers and organizers of that data, right?
And so having better organization for them to access the information that they have and get the intelligence that they have in their brain really improves the process. So that's where we're going with everything.
Got you know that that seems like the best way to be be doing. Especially you know that you've talked about so many times during this call is as much of this technology as a tool and an asset for you guys. There's always going to be the people element, right? The the human aspect to it, being involved in it, and so I just, I think that's one of the things that's important to note, talking with people and finding industry who are on this tech side.
I'm trying to be so tech forward is it's not removing the human. Element which is maybe what some of the other industries have done that have been on the front end. Of technology.
Yeah, yeah, I'm trying to really push that point because I don't. First of all, I don't want it to be that way and I don't believe that's that. You could take us out of it. 'cause there's it's. It's really more of an art than a science, but there are pieces of it that are science, right? There are pieces of it that are boring, like following up on insurance certificates. We can have AI do that, right? Filing UCCS or doing searching for certain data elements.
There are things that technology can do for us that we. We don't need to do and so moves everybody's job up a level to higher level task. So while I might not need as many people as I used to to do the same jobs, I can have fewer people pay them more and they have a better work. Life balance because they're making better decisions on better information and doing less work. But more important work. And that's really the goal.
Gotcha. No, I'm. I'm sure that that work life balance element as well as an attractive thing for people who are, you know trying to get into this industry as well as people who have been in here for years. And I think it's an interesting point, as someone who's been around for as long as you're having the equipment finance space. So and now you're in this position as someone who's the founder and CEO at Elev X, running your own shop.
So what is the advice that you would pass on to someone who wants to be in your shoes one day, or someone who's just now kind of getting started in the space?
Yeah. So my number one thing we haven't talked about it today is networking. You know in this, in this industry. Understanding your your competition, being friends with your your competition, you need partners. We can all work together. There's plenty of business out there for all of us. Yeah. And any given time you might be competing against somebody else and that's fine. But understanding the marketplace, understanding what's going on, knowing who the players are in the industry.
You know, knowing that somebody's better at, you know, a crane deal than you are is a good thing because you can take that to them and either split that deal or just sell them that deal. And then you you can learn either how to do that trans. Maybe for the future, or just know that I've got a source to place that transaction and make fee income off of it, right? You don't have to do every deal on your balance sheet to to hold it. You might be less of a balance sheet holder and and more of a.
A broker player and that's fine. I think you need to have a little bit of a a trading aspect where you do take some risk somewhere. If you're just pure brokerage that that can be a tough way to to go. But the people do it that way. I think that that's more challenging in today's model, but. Really, networking with people is is critical.
Well, with all that in mind, the last question I would have for you is there anything else you think listeners of the Digg podcast or readers of equipment finance news should know about elevx capital or the the state of the equipment finance space?
I would say you know that the state of the equipment finance space is, is, is good, you know in in choppy markets equipment finance usually does. Well, we're we're we do well when things are good and we do well when things are bad. There's kind of chaos going on right now with the economy and tariffs and all these things going on. You know, equipment still going to be needed.
Anywhere.
Market valuation on assets is kind of all over the place depending on what sector you're in. My advice to people is to to stay diversified in your your your plans. If you're. If you're a leasing company that is focused on one industry, you know how to, how can you diversify that, at least within that industry or add a second industry. So you got some.
Diversification. You know, a lot of people have been hurt over the last few years that were trucking focused and especially brokerage freight focused. And you know, they really needed to to diversify that. That in, you know, syndicate some of their portfolios and have a a good plan. But yeah, a diversified plan in choppy markets is a is a good strategy to have and so.
We're we're positioned well to do well in this economy with more business being built or products being built in the United States. A lot of equipment needed for that. So you know that that type of stuff works towards. Our business doing well. We'll see how the banks operate going forward. I still think they're gonna merge and and pull back more in the equipment finance space. So I think there's gonna be more and more opportunity for independence, but banks are just gonna.
They're always gonna play a role, but probably just a little bit different role. And I think that changing landscape is good, good for our industry overall.
Got you know that makes. A ton of sense, you know, being an interesting time to to watch, and I wish you the best of luck in it. And I thank you so much for your time today.
Thanks, Johnnie. Take care.
You too.