Before a car rental company opens its doors — before fleet and business equipment are purchased, before land is leased and staff is hired — it needs financing to make it all happen.
Four car rental companies share insights into their relationships with their lenders, taking us from the beginning of their businesses, through the ups and downs to today. The connective tissues in each of these stories are trust, transparency, communication and personal bonds.
GUIDANCE AND FLEXIBILITY
At the turn of the millennium, the Thrifty franchise in Indianapolis consisted of 160 leased units. At the same time in Los Angeles, Fox Rent-A-Car had but two stores. Thus began a growth path for these two car rental businesses that were facilitated by 1st Source Bank.
Thrifty and Hertz franchisee Brad Meyer has car rental management experience dating back to 1986, one factor that gave 1st Source the confidence to fund him when he became an owner.
Brad Meyer bought that Thrifty franchise in 2001. “I started with a small line and 1st Source was the first through the door,” he says. Now Meyer owns not only the franchise in Indianapolis, but he also owns franchises in Fort Wayne, Ind.; Flint, Mich.; Springfield, Mo.; all of Arkansas as well as in Mobile and Montgomery, Ala. And as of June 1, Meyer is also a Hertz licensee in Montgomery.
Fox Rent-A-Car opened its doors in 1989, though its expansion trajectory really began after 1999, its first year with 1st Source. Fox has spread from its West Coast roots to 21 U.S. locations today, including five recently added Florida locations. The company counts 35 international affiliate locations as well.
Both companies made the right moves to give their lenders, including 1st Source, the confidence to fund with increasing lines.
While Meyer was a new franchisee in 2001, he was no stranger to car rental. Meyer has a management history that stretches back to 1986 and spans work for four different car rental brands at franchises and corporate offices.
“Before taking the Indianapolis operation, Brad had already proven himself as someone who was effective in the industry and brought a lot of experience to the table,” says Chris Craft, president of auto/light truck and specialty vehicle fleet divisions (also known as Truckers Bank Plan) for 1st Source Bank.
That initial stamp of approval netted him a $500,000 line with 1st Source. In the following years, he worked to execute well, grow prudently and build on that trust, and his credit limits grew commensurately. “I worked with Cindy Trenerry, 1st Source relationship officer, who helped take the credit limit up to $15 million and then to $20 million in support of our profitable growth opportunities,” said Meyer. Later as the Hertz franchise deal unfolded, “I asked for — and got — $25 million of credit limit to support my fleet needs,” adds Meyer.
Craft and others cite Meyer’s market expertise and longtime key personnel as facilitators of those line increases. Meyer is quick to credit his team, including John Harbison, whom he hired to sell his cars in 2001 and is still with him today. “[Meyer] is willing to spend the money to put the right people in place to make sure that the operation is running as smoothly and efficiently as it can,” Trenerry says.
As such, 1st Source will even call on Meyer and his staff for advice. “We hold them as some of the best people in the industry for best of practices,” Trenerry says.
Similar to other car rental companies of this size, Meyer works with more than one lender. Nonetheless, “1st Source has been the one constant in our business since 2001 as far as lenders go,” he says.