Andrew Pace: Welcome back to ACS Portfolio Perspective. I’m your host, Andrew Pace, Chief Client Experience Officer at ACS, joined today by Dominick Cevet, CLFP, Assistant Vice President of Portfolio Management at Auxilior Capital Partners. Dominick is a graduate of the University of Pittsburgh, started his equipment finance career in 2012 at Element Financial Corp, now P &C vendor finance, beginning as a collector and working his way through various roles, including customer audits and payment modification management before becoming collections manager. There, he successfully managed a team of 11 collection specialists through the challenges of the COVID pandemic. 

In 2002, Dominick joined Auxilior Capital Partners, where he built their portfolio management department from the ground up, now leading a collaborative team of five full -time collection specialists. He recently earned his CLFP designation, reflecting his commitment to professional excellence in our industry. When he’s not managing portfolios at one of North America’s fastest-growing independent finance companies, Dominick enjoys hockey, golf, and exploring presidential history and historical sites with his wife, Megan. Dominick, welcome to the show.

Dominick Cevet: Thank you for having me. I’m very excited to be here. 

Andrew Pace: Well, let’s talk a little bit about Auxilior Capital Partners. Founded in 2020, has already scaled to over $1 billion in the portfolio in just four years, which is incredibly impressive, backed by private equity and focused on vendor -driven origination in sectors like construction, specialty transportation, franchise finance. You’ve clearly found a formula that works. 

Can you walk us through how you’ve been able to grow so quickly in such a competitive space? 

Dominick Cevet: Yeah, we’d be glad to walk you through it. So the one thing I would just add is we’re actually, as of right now, we’re managing over $2 billion in assets. It’s pretty exciting. So we have our construction space. We operate in the transportation and franchise space. And I think the real key to what makes us successful is those relationships,they run deep. So we develop our programs. We are hyper-focused with ensuring that we’re managing our programs properly, that our program partners are getting the service they need, that we meet with them on a regular basis so that we can always kind of benchmark where we are, where we want to be, et cetera. And so it’s really just, you know, our management team, Andrew, you know them too. 

Our management team, they’ve been in this industry for a long time. They have a lot of experience. They know what they’re doing. And, you know, they’ve just, they’ve built something that is going to be able to sustain itself because, You know,as I’m sure you know, too, when you’re building programs, you know, there’s a lot of time and resources that may go into building these programs. But once you see that finished product, you know, that I would never say something like that business rights itself, right? But I mean, you service a deal properly and you demonstrate that you can, you know, book, fund and service a deal properly and with efficiency, you know, that business is going to come back. And so that’s kind of what, you know, they’ve taken kind of a tried and true method that they’ve been able to deploy previously. And, you know, they’ve kind of stuck it here. And there’s some differences here. You know, I will say the one thing, and I, you know, when I was talking with some of your folks yesterday that I didn’t mention, right? So one of the things about Auxilior that is really differentiated, I think, from probably almost any company I’ve ever been at or any of our competitors for that matter is we have an unbelievable intern program. 

And I was just thinking about that today because we were doing some work with some of our interns. And we’ve been able to bring in a lot of people that have stuck here. And it’s such an advantage when you’ve got somebody who’s driven, they come in, they’re here for a year. I’ll tell you most of our interns, like they’ll be here for the summer and then they’ll be coming in on their breaks and things like that. And it’s such an advantage to have somebody basically that can kind of start on day one and they already they already know the ropes right um so that’s that’s really cool to see be honest with you I mean uh my I can I speaking for myself personally i mean my department has has really benefited from some really excellent interns that are now full -time employees and so it kind of just goes to show I mean part that’s part of you know our culture too is right is like investing investing in your people, right? 

You know, you can bring people in that are going to kind of work on monotonous types of administrative tasks, and then that’s what they know. But if you take the time to teach them the industry and not just tell them what to do, but like why we’re doing it and what effect it has on our business overall, it sticks better. And, you know, the advantage to us and sort of the benefit we get, obviously, is, you know, we just have a plethora of young people here who are doing awesome. 

Andrew Pace: That’s great. I mean, that’s awesome. 

What would you say the role of your manufacturer and distributor relationships has played in your growth at Auxilior Capital?

Dominick Cevet: Yeah. So the company, when it started in 2020, you know, kind of from the ground up there, also starting a company during, you know, a global pandemic was pretty interesting. Our chief credit officer was employee number one. And he kind of tells us stories about, you know, how he came in here and he was sitting at a folding table. And, you know, nobody was on the roads. And it’s kind of interesting to hear. Um, so it’s interesting because obviously a lot of programs and your manufacturing partners and your dealer partners, it takes time to build that up. 

So it was, it was very interesting for me personally when I came to Auxilior Capital in 2022, I came right in the middle of all that. So it was, it was there were two dynamics right so we were already booking business you know with dealers that we already know and and kind of um had prior relationships with maybe but at the same time like i was here watching us build the programs that we now are kind of managing now so you know in vendor finance that that’s what it is it’s relationships um relationships. It’s about being nimble and being able to kind of adjust to the needs of vendors and program partners. 

And I think, you know, that’s a very big competitive advantage that we probably have because, you know, a lot of these relationships that we have are deep and they’re long. And we kind of already have an idea what our partners want, but through constant communication and follow -ups, quarterly reviews, things of that sort, what we also were able to do is find out how their business is changing, and then what can we do to help benefit them on forward? And I know another topic that we kind of talked about and stressed on a lot was the idea of us being independent. It gives us a ton of flexibility to be really nimble.And the other thing about being nimble and being able to kind of, say, change course maybe on a dime at times when you need to is implementation. So we can take an idea that, you know, maybe a program partner has and they say, hey, you know, we would like to see X and we say, okay, we’re independent. We get a few people in a room, you know, we kind of cut out a lot of that bureaucracy and we can probably make a decision, you know, in a quarter of the time that a lot of other people would be able to make. 

You know, one of these things, I guess, it’s kind of interesting. Like, we’re a, we’re a very quick growing company, but we aren’t bloating our company with staff, right? So if you don’t have all that staff, what you have to do is you have to give people autonomy. They need autonomy to be able to make decisions. And so I will say that, you know, the amount of autonomy we have around here has been instrumental in allowing us to kind of pivot, make decisions, and kind of take that kind of idea and deploy it where we’re helping our vendor partners so that we can kind of maintain that competitive advantage. 

Andrew Pace: Right, right. You know, obviously that kind of growth going from zero to $2 billion in four years doesn’t happen by accident. You mentioned your chief credit officer starting at a folding table in the beautiful office space that you guys currently have. Require a strong strategy, especially involved in the markets.

Let’s talk about one of those big strategic decisions your team made recently. 23 made the decision to shift, pivot with regards to the distress and over-the-road trucking, a move that seems to perhaps have positioned you well, given obviously the distress that we’ve seen in that sector. 

What were some of the early warning indicators that led to that decision and how did your independent structure enable you to move quickly?

Dominick Cevet: Yeah, so the trucking issue, over-the-road trucking in particular, was really interesting for me to see personally because I started at this company in May of 2022, and that is the month when truck and trailer values peaked. So you know, doing a lot of deals on trucks and trailers. And I think a lot of people, and I’m sure you would have an even bigger market perspective, so to speak, on this. A lot of people were pretty not, it was a multitude of things that came together. And I don’t think anybody was necessarily ready for it, being the spot rates, gas prices, and then the values. I think the values are what really took a lot of people by surprise with how the values not only increased dramatically during COVID, but how they came back crashing down in 22 and 23. 

So, you know, like a lot of companies, we had to make some tough decisions on what we wanted to do, you know, what we wanted to put the brakes on. And so we had to kind of, you know, decide that maybe right now until there’s a little bit more clarity, right? I mean, it’s not always about, well, you know, there’s some problems in that sector, so let’s get out of it. I think a lot of the decisions that were made by probably, frankly, a lot of companies was that we just don’t have enough clarity right now. We’re not sure. Like, when will these prices, you know, when will they stop falling? You know, when will the spot rate market at least stabilize where there’s a level of predictability? There are a lot of things that I think just kind of almost force you to say that we just, we don’t have enough information, right? I mean, everything we do, every decision we have to make as a company is based on what information we have. And the information was just so unclear for a period of time. It was just really tough to make that kind of call. 

So, yeah, I mean, we really, that space was not focused on nearly as heavily. And what’s interesting, I’ll tell you now, and you may have this perspective, too, Andrew. You know, initially, you would see a lot of the smaller fleet operators struggling in, say, 22, and then into 23, your three to five, you know, asset operator. Well, right now, even though a lot of that has stabilized to an extent, I’m a little bit surprised at the level of maybe some of your larger fleet operators that are struggling today. I guess I would have thought that they would have kind of, at this point, they would have figured out a way to navigate a lot of the challenges on the market. But I can tell you, even though we’re not actively maybe putting as much of that business into our portfolio right now, there’s still a lot of insight we can get from talking to these operators. And that market is still stable. I mean, it’s still, it’s still a struggle. Right. 

Andrew Pace: What are a few other sectors that you pivoted to? 

And what did you learn from that transition in terms of and, you know, broader portfolio strategy?

Dominick Cevet: Yeah. So we still do operate in the transportation space. So right now we do have a program where we do motor coach financing. So that’s been pretty interesting because that comes with its whole, you know, it’s a completely different level of challenges. Maybe that over the road trucking doesn’t. You know, like over the road trucking. You’re dealing with spot rates. You’re dealing with oil prices, you know, insurance costs, repair costs, things like that. You know, one of the interesting things is in dealing with motor coaches. One of the things you’re dealing with in tourism is seasonality. 

So it’s one of those things where this company always goes to great lengths to understand their market and to understand where the pain points are going to be so that we are prepared to be able to meet those pain points. So with respect to say motor coaches, you know, we do know that there may be some customers that, you know, during certain times of the year, their business is down. They may be coming to us and saying, hey, we’re going to need a little bit of help during this, you know, this three, four -month period. 

You know, likewise, on some of our other businesses in the franchise space, also quite seasonality. So, or say quite seasonal, sorry. There’s a lot of seasonality. So, you know, during the wintertime, we do see some programs where, you know, the franchisees are not you know they’re not drawn in as much volume and again though like having these long relationships with a lot of these vendors we know this like we’re prepared for this we know it’s coming and so when you know when you have a level of predictability so to speak and you know it’s coming it allows you to get out in front of it so you’re not always kind of chasing your tail so like Like skip payments, right? 

Andrew Pace: Exactly. If somebody’s, if obviously they’re slow in the winter months, you can structure the, you can structure the loan or the lease around that predictability. And those would be months where maybe they’re just making interest only or it could be annual. You guys don’t believe in doing a lot of farm and ag equipment, but in that industry, you see a lot of annual payments. Absolutely. You know, so, you know, clearly your ability to shift gears when needed is obviously a big part of this success at Auxilior Capital. But just as important is how you deliver that flexibility to your clients. 

Let’s talk about service. Your ability, it’s a major asset being able to adapt, but it’s just as important how you deliver that adaptability through a service first approach. Your company has made service excellence a cornerstone of its strategy, leveraging independence to stay nimble. You touched on that earlier, making quick decisions and structuring creative deals. You’ve also begun incorporating automation to enhance delivery without losing that personal touch. 

How does that mindset impact portfolio performance? 

Dominick Cevet:I think in today’s day and age, if you are not maximizing what you can leverage out of technology, you’re really going to struggle. And I can only use, well, I feel most comfortable using examples from my own department, right? So we recognize early on, like, we’ll take, We do commercial and consumer lending. So we have a lot of consumer lending that has its initial, we’ll say administrative challenges, just kind of getting deals sort of on the right track, paying timely, paying monthly.

Sometimes there’s some confusion. Customers may not get their first invoice. They don’t know who we are, et cetera. So what we’ve done is we’ve done a couple things, you know, on the collection side, we’re able to kind of reach a broad audience through a weekly text message that kind of just says, hey, just reach an outlet, you know your payments do, give us a call here. But, I mean, that allows us to reach 600 customers, you know, in an hour as opposed to, you know, dialing for dollars, so to speak. But another thing that we’ve done, which is kind of interesting, too, is it’s very common in the vendor space where you’ll send out a welcome package. 

You know, it’s 10 years ago. You know, that’d be something if you put this big, bulky package together. You mail it out, et cetera. Nowadays, a lot of times, that’s emailed. But the One thing about emailing it is we realize that, like, we email our invoices to our customers. And if the customer is not making the first payments on time, are they checking their email? So we said, well, we don’t want to email this welcome package because if they’re not reading the invoice, they’re probably not going to read the welcome package. 

So we actually generate a welcome text that we send out twice a month to our consumer customers that just basically says, hey, you commence this new loan, you will get an invoice 17 days in advance your due date, et cetera. If you have any questions, call us here. We have a portal. You can register here. And what that does for us is invaluable because it just eliminates touch points with us. So it’s about managing volume without doing it in such a manual way. 

And, you know, we’re always kind of, we’re always looking at what the next thing is we can do that we can provide, you know, great service we can do it efficiently and we can do it leveraging as much technology as possible and a lot of that really not really it definitely stems from our executive team in particular our president of our company it is it is a high high focus it is one of the top focuses of the company every year it’s extremely vital to our operations. 

Andrew Pace: Yeah, that service -first mindset clearly supports your client experience or customer experience, but it also reflects how thoughtfully you manage the portfolio. And with exposure to both commercial and consumer lending, your vantage point is even broader. Let’s get into that. In addition to strong service, the one we talked about spans the consumer commercial segments, which gives you a unique view of the behavior, borrower behavior and market trends.

What kind of insights have you gained by looking across both those segments, especially in terms of how consumer trends could signal shifts in commercial performance? 

Dominick Cevet: It’s really interesting. You said that because you were probably sitting in the room I was sitting in two days ago when some of the folks from Equifax were saying how when it comes to things like fraud, that a lot of things that happen on the commercial side, they start on the consumer side as kind of a test case. So it’s been very interesting for me because I have only been up, you know, for the first 10 years of my career in equipment finance, it was all commercial. 

Dealing with consumer lending has been really interesting. I will say that a lot of, it’s almost, like, from a technology standpoint, it’s, it can be a challenge because when you’re trying to push everything to automation, email, portals, et cetera, you know, there are a lot, there’s a lot of people, you know, and no fault at all. You know, they just want their invoice mailed. They want to get an invoice in the mail. They want to write a check and they want to mail a check. And so it really, though, when I think about it, it actually just prepares us more for whatever is to come in the future here because we’re dealing with two completely different segments of the customer base. And so we have to be nimble enough to say, okay, on our commercial side, here’s how we’re efficient. 

And on our consumer side, here’s how we’re efficient. And those two things may not be in any way related. You might have two different definitions of efficient when it comes to commercial versus consumer. So if anything, you know, it keeps us on our toes, so to speak. We are always learning different trends and things like that. The one thing I’ll say, you know, I have not, we have not really seen the impact yet, and I don’t, it remains to be seen what happens on the consumer side with the recent uptake in student loan default rates. 

That could be a major, that could be a major determinant on like how consumer lending kind of moves because it’s been so long now where there were so many consumer lenders that weren’t defaulting on their rates that, you know, it’s something we’re watching because, you know, especially the equipment you’re financing on consumers, especially when you’re talking about equipment finance, I mean, it may not be your primary, you know, need, right? So it could be for recreational use and things like that. And so, yeah, I think the jury’s still kind of out, but it’s going to be really interesting to see what happens over the next, you know, six, 12 months with kind of the tick and consumer student loan defaults. 

Andrew Pace: Gotcha. Yeah, obviously your ability to spot those trends and manage risk across segments is impressive, and it ties into something else that gives you an edge. We talked about your independence, and we can wrap up by exploring how that structure shapes your strategy. That kind of cross -portfolio visibility speaks to how your team uses data to stay nimble, but another key advantage seems to be the structure itself. 

How is being an independent lender influence your ability to respond to changing conditions, developing stronger vendor relationships, and remaining competitive against larger institutions. 

Dominick Cevet: It makes all the difference when you are doing vendor finance because your program partners and the vendors that you’re working with, their needs and their situations are always evolving. So we have to be able to evolve with that. Like a great example I have is Just very recently with one of our program partners, we kind of, we had a meeting and, you know, we’re looking for different ways to structure deals and, you know, maybe affect some, some approvals and things of that sort on the front sales side, credit side. 

And some of these things that we’ve been able to, I guess, take from start to finish. I mean, you’re talking, you’re talking weeks, whereas you get involved with the bureaucracy of some of the challenges in the banking world where you’re not independent, and there’s just a lot of, you know, regulation. And so part of every calculated decision you make then has to be okay, well, how is it going to affect us from the regulatory side? And obviously, not to say that we aren’t regulated as a financial institution, but the level of decision makers shrinks a little bit and the number of people that are involved in making decisions shrinks a little bit so you can make decisions quicker. 

We have seen, we have made changes in nearly every single, you know, vendor relationship, probably in the last 60 days, in one way or another, right? And sometimes it’s small, and sometimes it might just be one person making a decision. But I can say that we’ve been able to make some major decisions in very short periods of time. And, you know, that’s a competitive advantage. It just is.

Andrew Pace: No, in looking ahead, how do you see that independence shaping your strategic positioning? 

Dominick Cevet: So I think that, I think that it will allow us the ability to, A, continue to, you know, grow with scope and, but B, it, I think what happens to kind of, you know, since we’re going to kind of wrap on this, you said, I’ll, I’ll tie it back all the way to the beginning. So we’ve got, we’ve got interns here and we’ve got really great young people here. We have a lot of people that don’t necessarily have 30 years of experience in the equipment finance industry. It’s a new concept to a lot of people here. 

And I think it’s going to help us continue to attract talent because people are going to see, you know, hey, we saw this company and they’re, they’re growing like crazy. And oh, you know what? We know somebody who works there. And like, you know, they say it was a great intern experience. And then, you know, we have a lot of different, I guess, initiatives you could say that we kind of do  too, that maybe we can do because we’re independent. Like we do,every year we have an awards ceremony at the beginning of the year. And the companies, you know, the executive team in collaboration with some of the other management here, they actually select winners and they take a trip every year.

I mean, they went to Scottsdale this year. And that’s, you know, that’s something that, frankly, like, you don’t see large banks doing, right? And so you’re able to kind of introduce different initiatives to incentivize your own employees. But, you know, more importantly, you’re able to attract top talent and you’re able to bring people in that you know that care and that want to help this business grow and so you know it’s just all integration. You know one thing I probably should mention is you know we’re in an office and in office culture is really really important here and it’s a You know, you’ve seen it. It’s a very nice office. It’s a very comfortable office. And so, you know, some of those little things, you know, they add up. 

They add up big time. And so I just think that the company is poised to continue our exponential growth because we have the pieces in place. We have the programs in place. And really, when you come in here, you can just see how people kind of integrate and stuff like that. And you can just tell they care.

Andrew Pace: Yeah, you know, your owners invest a lot of money in their people, technology, and clearly the, you know, the space for, so your staff can come to a place where they can collaborate and, you know, be in a comfortable environment. Yeah, and you’re right, I’ve been there, and it is, it is a beautiful space. 

Dominick Cevet: So, you know, about the boardroom, right? 

Andrew Pace: Yeah, you’re going to need a bigger boardroom, right? You know, Dominick, this has been a fantastic conversation.

Is there anything that we didn’t discuss today that you wanted, you know, you wanted our listeners to hear? 

Dominick Cevet: You know, I think we covered a lot of it. You know, it’s always, it’s always great to speak with you and industry people who can give us insight, right? Because a lot of times, you know, we tend to think of our own companies sometimes as a silo, right? And you can, you know, we, you know, we’re here to do this and we’re here to crush the competition, et cetera,et cetera. 

But, I mean, the bottom line is, you know, some of the stuff we talked about, right, like leading indicators of problems in a market and, you know, what people are seeing in certain areas, I mean, that insight affects the whole industry, right? So, you know, sure, you know, I’m not going to come to you and say, hey, you know, we want to know exactly how competitor A, B, or C are doing, but it’s important for us to know, you know, how we’re doing relative to, say, people, other companies in similar, you know, of similar sizes and that do similar businesses. 

And so it’s really important, I think, for the equipment finance industry in general to find a way to keep their competitive advantages, but to also recognize that, that, you know, it’s important that you have that bridge for information because it’s, um, it’s a, we saw it in transportation, right? It’s an industry that can change quickly. And, um, communication’s key. 

Andrew Pace: Sure. You’re not gonna, you don’t want to share the secret sauce or the secret recipe, but it certainly doesn’t hurt to share some best practices, you know, without divulging too much information. But, you know, those things are extremely important. You’re right. And that, you know, you guys are obviously, you guys are part of, you know, a number of different associations. 

You’re visible at the LFA and other, other associations. You support those associations. You guys send, you know, key people from your organizations to those events to, obviously, brainstorm, try to get the best, you know, share some best practices. And obviously, for the educational piece as well. 

Thank you so much for joining us and sharing your insights, your perspective on strategic pivots, service-driven growth, and unique advantages of operating as an independent lender really added a lot of value to the discussion. We appreciate your time, and we’ll be watching closely as your team continues to grow and innovate in the space. Thanks again for being here. 

To our audience, thanks for tuning in to ACS Portfolio Perspective. If you found today’s episode helpful, be sure to subscribe, leave your review and share it with your network. 

We’ll be back soon with more conversations from across the asset-based lending and recovery world. 

Until next time.