Through the integration of three Mitsubishi HC Capital businesses in the U.S., Mitsubishi HC Capital America has transformed into a $7.5 billion non-bank commercial finance company that seeks to create a more seamless financing experience for borrowers.

Many companies grow and expand their capabilities by acquiring other businesses. For example, an equipment leasing company may buy a working capital provider to diversify its product offerings. But sometimes, integrating businesses to operate under one banner can be an even more effective strategy. That’s just what Mitsubishi HC Capital did this year, as it merged together its Mitsubishi HC Capital America, Mitsubishi HC Capital (U.S.A.) and ENGS Commercial Finance businesses into one non-bank commercial finance provider with more than $7.5 billion in owned and managed assets.

The combined entity now goes to market as Mitsubishi HC Capital America, and with its subsidiary Mitsubishi HC Capital Canada, the company now has a more consolidated and integrated structure to the overall company.

“Our motto, from the start, has been ‘Better Together,’ and it’s been great to see the three groups with unique skill sets and cultures unify under one brand to work toward a common goal,” Brian Rosa, president of commercial finance at Mitsubishi HC Capital America, says. “The objective has always been to bring together three very strong businesses and teams, learn from one another and create an organization that’s greater than the sum of the three parts.”

A More Relevant Funding Partner

Prior to the integration, the three separate businesses operated independently, with each providing products that had the potential to complement each other but lacked the organizational connective tissue to make it an easy process for customers and employees alike. By bringing the three companies together, Mitsubishi HC Capital America is aiming to be a one-stop shop for businesses with commercial financing needs, as it can now provide a full suite of solutions that includes working capital products, asset-based lending, transportation and equipment finance, project finance, and structured finance leases and loans.

“We’re now a more relevant funding partner and service provider for our customers,” Rosa says. “[Combining these capabilities] allows us to dive more deeply into a customer’s capital structure and address multiple needs. Customers and partners who have been working with two or even three of our groups previously now benefit from access to our complete set of capabilities under one roof.”

According to Rosa, in addition to providing a larger menu of financing options to its clients, the combined Mitsubishi HC Capital America is also creating additional best practices. For example, the company organized its structured finance and leasing teams under the direction of Chris Pagano and brought together members of its capital markets buy desk into one group led by Corinne Seton.

“For the structured finance and leasing team, we had a strong direct-to-customer presence, and it made sense to bring the structured finance team in as well because it allowed us to offer more customized solutions than we had previously,” Rosa says. “On the capital market side, we had a handful of people across the three groups that were covering the market; by bringing them together, we’re able to realize best practices.”

Spreading Expertise

Now equipped with a more robust product set, Mitsubishi HC Capital America is doubling down on the expertise of its business leaders and providing greater collaboration between different parts of the business. “We’ve built the business so we have a variety of skill sets across multiple areas,” Rosa says. “It’s not critical for everyone to have all the expertise, but what they need to understand is if they’re hearing certain keywords or requests from customers, that we have a solution in-house and we can get them to the right person.”

Ensuring all employees have the baseline knowledge of the products Mitsubishi HC Capital America provides and who can best deliver them has been a major part of the merging process, even before the company officially integrated in April. Before the integration, there were several different groups within commercial finance alone at Mitsubishi HC Capital (U.S.A.), not to mention the varied divisions at ENGS Commercial Finance and Mitsubishi HC Capital America.

“The top priority was bringing all those groups together, the division leaders and sales teams, to educate one another about the different businesses and products offered,” Rosa says. “We want our customers to have a seamless experience when dealing with Mitsubishi HC Capital America, and it’s important that when they approach us with their needs, we’re able to direct them to the appropriate product expert right away.”

Cross-Border Capabilities

In the months since the integration, Rosa says the greater synergy has already paid off, with several leasing customers requesting asset-based lending solutions they otherwise would have sought elsewhere.

Rosa, who previously led Mitsubishi HC Capital (U.S.A.), has taken on a new role within the integrated company, steering its commercial finance business and reporting to Craig Weinewuth, president and CEO of the company. Meanwhile, Jim Freund, previously from ENGS Commercial Finance, leads the vendor solutions business while François Nantel continues to oversee Mitsubishi HC Capital Canada, which is integrated into the overall business’ structure and allows it to provide cross-border financing capabilities.

“With our capabilities through Mitsubishi HC Capital Canada, we can offer inclusive comprehensive financing for customers operating in either or both countries and grow their organizations faster and more effectively,” Rosa says. “I think there are a lot of companies out there that will say they have cross-border capabilities, but sometimes there’s a disconnect. We work day in and day out with our Canadian team, and it’s translated into some really good success stories with our customers that operate in both countries.”

Perfect Timing

The process of integrating three companies was not a short one, as Rosa says it took months of strategizing, preparing and actually completing the mechanizations of the business combination before the company was ready to go to market in its new form. Rosa, who was involved from the early stages as a leader of one of the three merging businesses, says that the leadership team was “very conscious about the impact to customers, vendors, dealers and employees” as it attempted to complete the integration in as seamless a manner as possible.

Coincidentally, the culmination of the integration process dovetailed with market fluctuations that should benefit the business right away, as recent turbulence in the banking sector and still increasing interest rates have made alternative financing options especially attractive in 2023.

“Companies are still investing in their businesses and deploying capital expenditures, and they’re increasingly turning to independent finance companies for financing in this environment,” Rosa says. “Many U.S. banks are in capital preservation mode, and this makes us a more attractive financing option for many businesses.”

Rosa says Mitsubishi HC Capital America’s short-term goals align well with the current market, as the company will be aggressive in capitalizing on opportunities even as it continues to identify best practices and synergies internally. In addition, the company is eager to grow in markets it already serves, such as construction and clean energy, while expanding and improving its ABL servicing platform, among other initiatives, many of which will revolve around continuing to improve the customer experience.

“Companies will always need access to capital to support and sustain growth, so I believe there will continue to be robust demand for solutions in the commercial finance space,” Rosa says, noting that automation technology and artificial intelligence could be “game-changers” in the industry. “It’s going to be an exciting space to be in over the next five to 10 years.”

ABOUT THE AUTHOR: Phil Neuffer is Managing Editor of ABF Journal.