Management Team Voices



VP of CE Division says Komatsu Financial offers much more than loans for purchasing new equipment

Tim Tripas

QUESTION: Why should a customer consider Komatsu Financial for financing equipment instead of going with an outside lender?

ANSWER: All we do is finance Komatsu equipment through Komatsu distributors. That puts us in a unique position to better understand customers’ opportunities and the challenges they face compared to an outside lender that finances everything from homes to airplanes. Being an equipment manufacturer, we also know the construction and mining marketplaces better, which allows us to be more flexible on the front-end when setting up the financing and on the back-end if customers hit a bump in the road. At Komatsu Financial, either on the front end or after the sale, our first question is always, “How can we help?” For those reasons, the number of companies that turn to Komatsu Financial for their equipment needs has continued to increase.

QUESTION: How much of an increase have you seen?

ANSWER: More than 80 percent of all new Komatsu machines sold in North America are financed by Komatsu Financial. That is up from about 60 percent five years ago.

QUESTION: How have you been able to achieve that?

Customer-Driven Solutions

ANSWER: We’ve taken a much more customer-oriented approach, including getting out in the field and meeting directly with dealers and customers to understand how we can better serve their needs. That contact has helped us develop a lot of great programs that are different than what the typical marketplace has to offer. For example, if a customer has a lease that’s greater than 24 months, we’ll let them out of it six months early, as long as the customer is buying another piece of Komatsu equipment. So, a customer may have a D51 dozer and would really like a larger size or a new D51i-22 intelligent Machine Control dozer. With this program, we completely forgive the final six months of payments on the existing lease, to allow for the additional machine purchase. Nobody else in the industry does anything like that.

QUESTION: Could you give some other examples?

ANSWER: In talking with customers, many said they desired the flexibility of paying over time for repairs or service work from their dealer. We developed a parts and service financing program that’s a true loan. Some competitors have similar financing, but in reality, it’s a credit card that charges higher interest. Komatsu Financial’s program lets customers finance the first $50,000 at zero percent for 15 months with no payments for 90 days. That allows the customer to bring the equipment into the shop, get it fixed and get the equipment back and working before a payment is due. Additionally, on this or any other product from Komatsu Financial, there is never a pre-payment penalty.

Another example is our Flex Lease. Customers make a 36-month commitment, but every year on the anniversary of the lease, they have the option to return the equipment. That grew out of a customer telling us, “I think I need a machine for three years, but I know for sure I need it for one.” The advantages are obviously that if a situation changes, they can opt out, and if customers choose to stay in the lease, their rate continues to be what it was from the day the lease started. It’s been well-received, especially in light of the past few years when we’ve seen a big shift from ownership toward leasing. We have several other attractive leasing options if that’s the route a customer wants to go.

QUESTION: Do you finance used equipment?

ANSWER: Absolutely. We’ll finance new and used equipment as long as it’s a product a distributor sells and not a competitive brand. Our focus is on helping build successful relationships with our distributors and their customers, and financing new and used equipment, leases and parts and service contributes to that. We consider Komatsu Financial a facilitator in the process, and we’re willing to do whatever we can to help customers be successful.