A conglomerate based in Vancouver is growing in Canada and, more recently, the U.S., as it brings capital to an array of customers ranging from financial institutions to small- and medium-sized enterprises (SME).
In October, Travelers Financial Group marked its 40th anniversary by highlighting its diversification from equipment and auto finance into business process outsourcing and technology.
The company, which held a ribbon-cutting ceremony for its new downtown headquarters on Oct. 24, began in 1984 as a captive finance provider for office equipment. Captive finance is where a seller of goods or services has their own captive finance source to facilitate transactions.
The firm has since expanded across Canada into a number of different sectors, including industrial equipment, auto finance, business process outsourcing and technology. Its customers include financial institutions, credit unions and SMEs in the transportation, construction and manufacturing sectors.
“We’re pretty excited because we’ve had some great growth in the U.S.,” Jim Case, CEO of Travelers Financial Group, told BIV.
“Typically U.S. companies come to Canada. It’s not often when a Canadian financial services company goes to seek expansion in the U.S., but that’s part of our mid- and long-term strategy. It’s been a great adventure for us over the last 40 years, and I would say that the next decade we have ahead of us is probably even going to be more exciting.”
At the core of the company’s business is a combination of business process outsourcing and providing capital to small- to medium-sized enterprises, which is backed by 280 employees in North America.
Case said size can be measured in assets under management or funded volume. The company has seen top-line growth from $12 million in its first year to over $1 billion this year, including all direct and indirect businesses in which it is involved.
“In our equipment-finance businesses alone this year, providing capital for revenue-producing assets to small- to medium-size enterprise in both Canada and the United States, we would be looking at somewhere between $550 million and then, indirectly through our partners, you’d probably add an additional billion to that. In terms of assets under management, we’ve grown that from about $7 billion last year to just under 10 this year.”
The company is active in providing capital in Canada and the U.S., and its customers include institutions such as banks and credit unions. By improving workflows and efficiency, cost and risk can be curtailed in any major lending environment. This could include helping the client build a credit-scoring engine at the front end to collections at the back end, and everything in-between.
Advancements in technology have allowed business processes to become more efficient, including by enhancing the capability of human capital. Even large financial institutions are getting on board, Case said.
“If you think about a major bank in Canada or the U.S., their technology stack is usually fairly robust, and very difficult to make change from. It requires large, large investment and so they don’t move quickly. Our technology stack and the way we approach the market makes us very nimble and quick, so we can go in and take over an outsourcing of a number of different workflow processes, and do that in an extremely efficient and quick manner. We’re finding that more and more major institutions are looking at ways to gain efficiency, notwithstanding the fact that they have [a] large bureaucratic process.”
Case said the company’s lending business has seen significant growth in the last several years as the economy tightened.
“A lot of major banks start to have concentration-risk issues, also we’ll have sectoral issues where they will be pulling their horns in and they won’t be advancing as much capital to those sectors. We’re not a cycle lender. We are sector-specific, and have been around long enough that we ride through the ebbs and flows of those sectors. We tend to grow fairly significantly when the credit markets tighten up.”
The company aims to meet the capital-financing needs of industry participants in construction, manufacturing and transportation that use revenue-producing equipment. By using its technology to achieve greater efficiency in various marketplaces, the company hopes to further facilitate its geographic and corporate expansion.
