Brian Griffin 2017-07-26 06:15:22
WITH THE FIRST HALF OF 2017 BEHIND US, economic prognosticators are hard at work forecasting what’s in store for the rest of the year. I believe there are a number of reasons to be optimistic about the outlook for equipment financing in the months ahead.
ANTICIPATED TAX REFORM. Despite questions around how successful the current administration will be in lowering the tax rate, the expectation of lower rates, reduced deductions and a simplified tax code bode well for the near-term future of the economy.
TECHNOLOGY. Advanced, cuttingedge technology in a number of asset classes is a top priority for business owners. If equipment is available that allows faster production or greater efficiency, confidence in future business opportunities will encourage leaders to continue acquiring new assets. Despite uncertainty around the future of the Affordable Care Act—or its potential replacement—technology within the healthcare sector has evolved so that hospitals compete to offer the best and most efficient equipment available for patient care. As a result, this area remains strong with lessors focused in the medical equipment finance space.
INCREASING COMPETITION. Given the long-term success of the industry, equipment finance continues to be an area financial institutions devote more resources and capital toward. While generally good for the industry, the increased availability of funds does result in reduced pricing at all levels. Growing competition also creates more relaxed credit and/or structuring decisions.
MATERIAL HANDLING. Steady opportunities should be available in material handling equipment. Manufacturers currently have backlogs of eight weeks or more for the assets. The driving force seems to be keeping fleets modern and pursuing new prospects.
MORE PREVALENT USE OF ELECTRONIC DOCUMENTS. Whereas most equipment lease/loan documents are still signed traditionally, electronically documented transactions continue to grow at an exponential rate. This is infinitely more efficient and, when done properly, a safer process that benefits all parties involved and the industry as a whole. As we enter the second half of the year, the $1 trillion equipment finance industry remains strong. As we continue to add value to our customers and embrace new opportunities, we will end 2017 in a solid position.
Brian Griffin is president of the Lease Banking Group, a division that provides funding and banking services to independent leasing companies at MB Financial Bank. In this role he is responsible for directing and managing three main areas: relationship management, credit and lease administration.
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