In 2020, Vero Technologies was founded with a mission to revolutionize the floorplan and inventory lending marketplace. We quickly realized that the existing loan management solutions were outdated and lacking in modern functionality. To address this issue, we embarked on a journey to rewrite the back-end loan management software and the entire operating system for servicing floor plan loans.
Our approach was to start from scratch and build the Vero Inventory Financing Platform from an open architecture, API-based foundation. This gave us the flexibility to easily scale, iterate, and integrate with third-party service providers to meet the ever-changing needs of the credit and risk landscape. By integrating with credit score providers, self-audit programs, vehicle appraisal platforms, and ACH integrators, we have enhanced the intelligence of our system, resulting in faster underwriting decisions, more frequent asset verification, better asset valuation services, and improved bank account monitoring and transactions.
To further improve our software and servicing capabilities, we created Lever Auto, a direct lending program that has already attracted over 150 dealers with minimal loss rates. Our own portfolio of Lever dealers serves as an early release group to prove new features, allowing us to rapidly build necessary management features for our platform. It has also created a healthy pipeline of Lever dealers who eventually "graduate" to our bank partners for larger facilities and more attractive interest rates.
When we launched our Software-as-a-Service and Lending-as-a-Service business, Vero Technologies immediately captured the attention of a large audience. We currently have approximately 45 banks in our pipeline, with seven in contracting and five already under contract. These banks are either launching or improving their in-house inventory financing solution for their customers.
As banks seek to differentiate themselves in an increasingly competitive market – it is critical for them to offer differentiated services to support the businesses in their communities. As the fintech ecosystem has matured, those banks who are at the front lines of growth and expansion have established partnerships with these technology companies to help them evolve.
Lending-as-a-service is an engagement model where a bank can work with a fintech who enables a new credit product – both through technology and the credit expertise and servicing operations necessary to administer whatever type of lending they may specialize in. Vero Technologies offers a lending-as-a-service engagement model for inventory financing. By working with Vero, banks can offer inventory financing (also known as floor plan financing) for dealers of manufactured goods, without adding headcount or investing in new systems.
For banks that are interested in offering floor plan financing, but lack the in-house experience to set up the program, Vero provides them with an “inventory financing as a service” platform. Vero works directly with the bank’s Commercial Lending team to develop a program that is suited for their unique credit requirements and targeted dealer verticals (auto, powersports, Ag equipment, RVs, etc.). Vero supports the Commercial Lending organization to provide the software, systems, and servicing operations.
Vero can support the Underwriting process by pre-qualifying applications and providing a credit memo to be considered part of their decision making. Once a dealer is approved, Vero will handle the on-boarding, customer support, funding operations, collections and risk management. Vero can act as the Servicing Agent of the bank’s floor plan program, much like how banks work with a 3rd party servicer for their mortgage business once a loan is originated.
Vero’s team handles the day-to-day operations of the program, such as title warehousing, audits, recovery and remarking, supplier onboarding and funding, and customer service. The platform includes workflows to manage funding requests and collections, a robust risk monitoring solution which allows the lender to track dealer financial health and operational performance with automated alerts and communication channels. It’s a turn-key solution that banks can offer with no investment in systems or headcount.
For banks that already have a wholesale financing offering but lack the systems to scale their floorplan portfolio, Vero’s technology platform can serve as the end-to-end operating system for their inventory financing program. Vero’s software will streamline the underwriting, funding, and risk and portfolio management functions. The bank’s credit, servicing and operations teams will be trained to use the software to manage each of their respective functions.
Vero offers banks a platform to monitor their portfolio in real-time and drill down into account level detail as necessary. The platform publishes a daily general ledger entry and NACHA files that tracks the performance of the day. The bank is able to maintain complete control and transparency across their program, while alleviating the need to build an in-house team to manage the nuanced credit product. Banks can access this information via a separate secure web portal that banks, suppliers and dealers log into via the web browser.
Vero’s platform can help expand relationships with dealers while reducing their costs of funds, help diversify C&I portfolios beyond CRE, increase yield on C&I by 2-3x relative to a bank’s traditional offering, and attract new deposits from dealer accounts given the uniqueness of the offering relative to peers in the market. Banks will use Vero’s loan management system to calculate all accruals and collections and create the payment files for execution by the bank’s ACH systems. Their cloud-based SaaS platform can be implemented as the “source of truth” for the bank’s inventory financing program– while maintaining complete independence from the bank’s existing software and operations.
For banks that do inventory financing today, by leveraging Vero’s end-to-end platform, they can scale their operations efficiently, increase operating leverage of their team and improve the risk and portfolio monitoring capabilities of their platform.