Last month, I spent a few days with my peers at the Commercial Finance Association annual convention in Washington D.C. I was confused by what seemed to me to be a pervasive contradiction. When asked how their year was going, nearly everyone was upbeat. Responses ranged from “really good” to “it’s our best year ever.”

Yet, this success is occurring in the face of the hyper-competitive environment that we’re in. There is a consensus that competition is being driven both by traditional sources as well as nontraditional sources, such as merchant and ACH cash advance lending, expanding international lending, and a willingness to combine traditional asset-based lending with lending on expanding asset classes such as luxury items and enterprise value. To beat a dead horse, the supply of funds clearly exceeds the demand, and this imbalance has driven competition to new heights.

Why, then, are so many people having great years and feeling good going into 2015? Could it be that competition is making us better? Are we doing more with less, eliminating waste, adopting innovation, and making sure that we’re delivering value?

Being in Detroit, it occurs to me that I’ve seen firsthand one of the most severe imbalances in supply and demand that has ever occurred. In 2008, the auto industry imploded overnight, with vehicle sales falling by 40 percent and capacity utilization dropping from 82 percent to 45 percent. This catastrophic decline occurred from 3Q 2008 through 2Q 2009. At the time, it seemed that the industry could not recover. Investment and credit dried up and the government had to step in to keep General Motors and Chrysler alive. Darkness enveloped the industry, and it seemed impossible that it could return to prominence.

This crisis forced the industry to transform overnight. Costs were slashed, technology was embraced, customer focus became sharp, and execution occurred. What emerged is a powerful industry that is generating tremendous wealth while also delivering award-winning product with a level of dominance not seen in decades.

Is there a correlation between the auto industry of 2008 and 2009 and the credit markets of 2014 and 2015? I believe there is. While the buildup of excess credit has not been as sudden as the drop in auto sales in 2009, we certainly face an unprecedented imbalance of supply and demand. This does not mean that lenders all face a dismal outlook. Some do, of course; however, those that truly deliver value to customers, through industry expertise, exceptional service, new offerings, and low cost will succeed, provided that they maintain sufficient capital and operate efficiently.

Those companies that are stuck in historical mind sets and are not willing to change will not survive. They will find that their market will shrink, profit margins will decline, and portfolio risk will increase as their best customers are solicited by others.

So, it isn’t a contradiction that most of those that I encountered recently are doing well in spite of the landscape. Those that are active in our industry are the ones seeking to change and stay ahead. This is not the time to hunker down.  It’s a time to innovate and execute.


Toby Dahm serves as Senior Vice President and ABL Portfolio Manager for Hitachi Business Finance. In this role, he assists in business development and is responsible for underwriting and managing of all asset-based loans.

Toby has more than 25 years of experience in commercial lending. His career began with Michigan National Bank in 1986. While there, he held positions in credit management and portfolio administration, including traditional lending, troubled loan workouts, and asset-based lending. In 1995, Toby joined Crestmark Bank and was responsible for underwriting, portfolio management, marketing, and product development.

In addition to his commercial lending career, Toby is an experienced entrepreneur. He was a founding member of Steeplechase Software, an Ann Arbor, Michigan-based start-up company that developed and sold software for industrial automation. Steeplechase was sold to Schneider Automation in 2000.

Toby received a bachelor’s degree in finance from Michigan State University in 1985 and a MBA from the University of Michigan in 1993. He was a member of the winning team in the 1993 University of Michigan Pryor Award contest for best business plan. He is active in the Association for Commercial Growth, the Commercial Finance Association, and serves as an Advisory Board Member for The Salvation Army.

Contact Toby today at or (248) 658-3208.

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