Empowering Small Businesses: Ford Credit’s Commitment to Education and Dealer Relationships

In a landscape where navigating financial challenges poses significant hurdles for many small businesses, Ford Credit is stepping up with a mission to enhance access to capital. Under the leadership of President and CEO Cathy O’Callaghan, the organization is emphasizing a dual approach: education and robust dealer partnerships. This initiative aims to ensure that small business owners are equipped with the knowledge and resources they need to thrive in a competitive market.

The Landscape of Small Business Financing

The statistics are sobering. Currently, fewer than 15% of all new small business loan applications are approved. This alarming figure highlights the significant barriers faced by entrepreneurs looking to secure funding. O’Callaghan presented these figures during the Ford Pro Accelerate forum, which took place on September 30. The forum brought together leaders from various sectors, including commercial vehicle manufacturers, technology providers, financial institutions, and government officials, all convening to tackle the economic challenges confronting essential workers in industries such as construction, manufacturing, logistics, and energy.

Bridging the Knowledge Gap

Many new small business owners possess honed skills in their respective crafts—whether it’s building, manufacturing, or providing services. However, the expertise required to effectively manage a business often eludes them. “To run a business, you might need deeper access to financial information, which may not be readily available to some of our small essential businesses,” O’Callaghan pointed out.

This sentiment underlines the crux of the challenge: A gap exists between what business owners know and what they need to know to secure financing successfully. To fill this gap, Ford Credit aims to provide crucial financial education that includes:

• Understanding Types of Credit: Many entrepreneurs are unaware of the variety of credit options available to them.
• Timing Investments: Knowing when to spend money wisely can significantly impact business growth.
• Building Financial Records: Learning how to create solid financial records can help in communicating effectively with financial institutions.

The Hurdles of Lending

Additionally, O’Callaghan acknowledged that the lending environment itself is fraught with challenges. Financial institutions often receive “hundreds of thousands” of small business applications, making it difficult to thoroughly evaluate each business’s individual circumstances. “They don’t always have time to do that,” she emphasizes. This reality complicates the funding landscape for many aspiring entrepreneurs who are often engaged in an uphill battle against systemic challenges within the lending ecosystem.

The Role of Dealers

A key component of increasing access to capital lies in developing strong relationships with dealers. O’Callaghan asserts that a nuanced understanding of individual borrower circumstances is vital. This understanding, paired with mentorship, can empower small business owners by enhancing their financial literacy.

For Ford Pro, the company’s commercial vehicle division, cultivating strong dealer relationships plays a pivotal role. “We have many entrepreneurs who have become dealer principals, and they need coaching from us on some of the deeper sides of financials and what sort of credit policies are available to them,” O’Callaghan explains. Leveraging the expertise of dealer principals who have navigated similar paths can therefore provide invaluable support to small businesses.

Moreover, dealers are in a unique position to offer ongoing education about various financial aspects, including tax benefits, savings, investments, and insurance. O’Callaghan states, “Some of our bigger dealer principals will have to be a coach and mentor to some of the small businesses.” Their firsthand experience with the growing pains of business ownership enables them to offer practical guidance that can help emerging entrepreneurs build a strong foundation for their companies.

Ford Pro’s Market Presence

Meanwhile, Ford Pro is in a favorable position within the market, boasting a remarkable 43% market share in the Class 1 to Class 7 vehicle segment as of the third quarter. This figure represents an increase of 0.8 percentage points compared to the previous year, illustrating Ford Pro’s growth trajectory. Notably, sales of transit vans surged by 32.3% year-over-year, highlighting the demand for their commercial vehicles.

In addition to vehicle sales, Ford Pro’s software subscriptions also experienced a significant increase, jumping 30% year-over-year. This growth reflects the company’s commitment to not just selling vehicles but providing integrated solutions that support the unique needs of small enterprises.

Through education and strategic partnerships, Ford Credit aims to empower small businesses and bridge the financial gaps they face, guided by the belief that informed businesses are successful businesses.