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The TSL Interview: Marc Heller, President, Commercial Services, CIT Group
April 1, 2019
By Michele Ocejo
Heller joined CIT in January 2004 when CIT acquired the factoring portfolio of HSBC. He has previously held the position of executive vice president and New York regional manager of HSBC Business Credit (USA) Inc. Heller was with HSBC and its predecessor, Republic Business Credit Corporation, since 1991 and has been in the financial services industry since 1970.
A recipient of a number of industry awards, Heller received the Financial Services Industries Award from the American Jewish Congress in 1996. He received the Leadership in Education Award from the New York Institute of Credit in 1998. Heller received the Community Achievement Award from ORT in 2002 and received the Top Hat Award in 2004. In 2015, Sephardic Bikur Holim awarded him with the “Partner in Kindness Award.”
Heller continues to be very active in supporting many organizations and is a founding member and Executive Board member of Delivering Good. He is a board member of the Father’s Day Council and is also active in raising money for National Jewish Hospital, the UJA, Bnai Brith and Big Brothers and Sisters.
Here, he discusses what we can expect from CIT Commercial Services this year, the evolution of retail and the challenge of getting new industries to recognize the benefits of factoring.
How did you get your start in factoring? Tell us a bit about your career path.
My career started working for a textile company, learning credit from the ground up. In 1977, I saw the light and joined Chase Manhattan Bank’s factoring division. As the factoring industry began its consolidation, Republic National Bank was my next stop, becoming the regional manager, until the bank was acquired by HSBC, where I had the opportunity to grow my factoring background internationally in Europe and Asia. In 2004, CIT acquired the U.S. factoring business from HSBC and, utilizing everything I learned from the industry leaders over the many years, I rose to the position of president of a leading factoring company in the U.S.
What are your main goals for Commercial Services in the coming year?
We look to grow the volume, revenue and profits through our existing client base, while reaching record-breaking new business signings across all regions. With our high-quality client base, we work diligently to help them grow through acquisition funding and act as a “good matchmaker” and their “trusted advisor” – strong relationships is our key distinction. As we look to grow our core markets, we are adding industry and product diversification to support our 2019 plan and plant seeds for future years’ growth.
How is the tumultuous retail industry affecting factoring? How is CIT facing the challenges of this volatility? Are there other big concerns for factoring in the coming year?
We have seen the best of times and almost the worst of times and yet we are still here. We pride ourselves on our diligent customer research and customer contact. We stay close to our clients, listening to them and their customers, while gaining servicing and industry knowledge, making us a bit smarter. The economy is always a challenge. The evolution in the retail market is another challenge, including issues such as major retailers closing some stores, some looking to make major investments in e-commerce, potential consolidations and, on top of all that, we have a consumer that has changed their buying model. We don’t think that brick and mortar will go away, but we do believe that the retailer is going through a complete evolution and has to adapt to it. As they adapt, we will have to adapt to those changes to provide servicing and financing in this new model.
In July, CIT announced it had hired Joerg Obermueller as the managing director of the Supply Chain Finance business, as part of your overall plan to pursue growth opportunities. Where do you expect to see growth in 2019, either as an organization or for the industry in general?
In 2018, we introduced SCF to support clients outside our core factoring market. The SCF product helps the buyers and sellers while expanding CIT’s industry knowledge and product diversification. We are excited about the significant upside SCF will have on our profitability as well as its potential to introduce CIT’s products to a new and diverse customer base, enabling our new clients to see the value of all of CIT’s businesses and diversification.
What other industries could benefit from use of receivables management and financing services? Why aren’t they currently taking advantage of those opportunities and what can be done to raise their awareness?
Factoring has been established in the fashion, footwear and home furniture industries for decades and everybody there gets it. But people in other industries can be somewhat skeptical about new ways of doing business. In most cases, the real challenge is in getting these folks to give it a try. Once they do, they quickly see the benefits of improving cash flow, and protecting themselves from customer credit losses. At that point, they’re pretty happy to let someone else worry about managing credit risk and collecting on invoices while they go back to what they do best: making products that consumers want to buy. Beyond the known benefits of the factoring product, reducing leverage through securitization and bulk purchases has become a very popular offshoot of factoring, especially with private equity investments. TSL