Building a Conglomerate in Another World - Chapter 63 - New Stream of Income Part 2

The showroom at Hesh Motors continued to thrive. After the overwhelming success of the first sales day, Matthew noticed a trend that he couldn’t ignore: while the wealthy clientele had no trouble paying for automobiles in cash, many middle-class buyers were relying on the company’s in-house financing program. While this system worked, Matthew realized it had limitations. To truly capture the growing middle-class market and streamline the financing process, a more sophisticated solution was needed.

That evening, Matthew sat in his office, scribbling notes in a notebook. Amber entered with two cups of coffee, setting one down on his desk.

“You look deep in thought,” she said, taking a seat across from him.

“I am,” Matthew admitted, setting his pen down. “The in-house financing we offer is good, but it’s not scalable. If we want to reach more of the middle class, we’ll need something better. I’ve been thinking about starting a bank.”

Amber raised an eyebrow. “A bank? That’s a big leap, even for you.”

Matthew nodded. “It is, but it makes sense. With a bank, we could provide loans specifically tailored for automobile purchases. We’d also have more flexibility in setting terms and interest rates. And if we do this right, it could become a major source of revenue.”

Amber sipped her coffee. “You’ll need help with this. A bank isn’t something you can start on your own.”

“I know,” Matthew said. “That’s why I’m going to propose a partnership with Fitzwilliam Bank.”

Amber’s eyes widened. “My father’s bank? He’ll want to hear a detailed plan.”

“And I’ve been working on one,” Matthew replied with a small smile. “I think it’s time to set up a meeting.”

The next morning, Matthew arranged a meeting with Charles at the Fitzwilliam Bank headquarters. The building, an imposing structure in the heart of Amsterdam, reflected the bank’s long-standing reputation as one of the most trusted financial institutions in the region.

Charles greeted Matthew warmly, motioning for him to sit. “Matthew, it’s always a pleasure. What brings you here today?”

Matthew leaned forward, his tone serious but enthusiastic. “Mr. Fitzwilliam, I’ve been analyzing the data from our sales, and while our current financing program is effective, it has limitations. As our customer base grows, especially among the middle class, we’ll need a more robust system. That’s why I’m proposing we start a new bank—one that specializes in loans for automobile purchases.”

Charles raised an eyebrow. “A bank specifically for automobiles? That’s an intriguing idea. Tell me more.”

Matthew began explaining. “Currently, our in-house financing program is funded directly by Hesh Motors. While it works for now, it ties up a significant amount of capital that could be used for other operations, like expanding production or opening new showrooms.”

Charles nodded, following closely.

“With a dedicated bank,” Matthew continued, “we could create a separate entity to handle the financing. Customers would apply for loans through the bank, freeing up Hesh Motors to focus on manufacturing and sales. The bank could offer competitive interest rates and flexible payment terms, making it easier for middle-class buyers to afford our automobiles.”

“And how do you propose we structure this bank?” Charles asked, his interest piqued.

“I envision it as a joint venture,” Matthew said. “Hesh Motors would bring the customer base and the industry-specific knowledge, while Fitzwilliam Bank would provide the financial expertise and infrastructure to get it off the ground. Together, we could establish something truly unique.”

Charles leaned back in his chair, stroking his chin thoughtfully. “What about the risks? Lending money always comes with the potential for defaults.”

Matthew nodded. “That’s true, and we’ll need to be cautious. But there are ways to mitigate the risks. First, we’ll require a reasonable down payment on every loan to ensure customers have a stake in the purchase. Second, the driving schools we’ve established mean that buyers are trained and responsible, reducing the likelihood of accidents that might make them unable to repay. Finally, we’ll work closely with Fitzwilliam Bank to create strong underwriting standards.”

Charles appeared satisfied with the explanation. “And what’s the benefit to Fitzwilliam Bank?”

“Expansion,” Matthew said simply. “This partnership would allow Fitzwilliam Bank to enter a new and rapidly growing market—automobile financing. As demand for cars increases, so will the demand for loans. It’s a win-win situation.”

Charles smiled. “You’ve thought this through, Matthew. I must say, I’m impressed.”

After a lengthy discussion, Charles agreed to move forward with the idea, provided Matthew could present a detailed implementation plan. Over the next few weeks, Matthew and the leadership teams from both Hesh Motors and Fitzwilliam Bank worked together to lay the groundwork for the new venture.

The first step was choosing a name. After much deliberation, they settled on “Hesh Financial Services,” a name that tied the new entity to Hesh Motors while signaling its specialized purpose.

Next, the team developed the loan structure. They decided on three tiers of loans to cater to different customer needs.

Standard Loans: For middle-class buyers, offering reasonable interest rates and flexible terms.

Premium Loans: For upper-class buyers, with lower interest rates and added perks like expedited approvals.

Starter Loans: For younger buyers or those with limited credit history, requiring a larger down payment but offering a pathway to ownership.

Marketing materials were created to explain the benefits of Hesh Financial Services. Slogans like “Own Your Dream Car with Hesh Financial Services” were tested and approved.

By the end of the year, Hesh Financial Services was ready to launch. The service was integrated into the car-buying process at Hesh Motors showrooms. When customers expressed interest in financing, they were directed to a dedicated desk where loan officers from Hesh Financial Services walked them through the process.

The response was immediate and positive. Middle-class buyers appreciated the flexibility and clarity of the loan terms, while upper-class buyers saw the premium loans as a convenient option. The streamlined process made purchasing a car more accessible, further boosting Hesh Motors’ sales.

One afternoon, Matthew stood in the showroom, observing as a young couple signed the paperwork for a sedan through Hesh Financial Services. Amber joined him, her expression curious.

“So, the insurance, the financing…what’s next?” she asked with a smile.

Matthew chuckled. “Now, we let things be first and see the money comes in.”