Strong Growth in the Equipment Finance Industry
I often have opportunities to speak with industry professionals including lessors, brokers and funding sources serving the equipment finance industry and typically ask them two questions:
- Is your company growing?
- What is driving your company’s growth?
What are the factors driving today’s growth?
The answer to the first question is almost always “absolutely” or “we can hardly keep up with all the demand for equipment financing.” To be perfectly honest, I have not heard a negative comment related to the level of business being on-boarded by any of the leasing/lending sources I have spoken with in years.
The second question is where it gets a bit “foggy” as the answers vary. Many tell me it’s simply the result of a strong economy. Others say it’s all about strong consumer confidence – which is considered by many to be THE leading economic force driving the overall economy – or the fact that we remain in a low-interest rate environment. And finally, some say it’s all these factors – a sort of pallet of positive influences.
There’s no doubt about it: our industry is experiencing a period of strong growth. I would argue that one would be naïve to believe all these factors are not positively impacting demand for equipment financing in some manner. But I believe it’s deeper than a strong economy and all the other reasons cited above: in my mind, a key reason why equipment financing is growing at such a rapid rate is because consumers (the business owners) are well educated and understand the true value of leasing equipment better than ever. In the past, banks were a major source of financing for small-to mid-sized businesses; business owners worked very hard to keep strong relationships with their banker for all their financing needs. Today, business owners understand they have many options – and more options than ever when it comes to equipment financing.
Innovation to Deliver a Unique Value Proposition
So how did all these business owners get so knowledgeable?
We can say, “It’s the Internet!” But it’s more than that from my perspective. I think it’s time we give some credit to the hard-working people in the equipment finance industry – the business originators, credit underwriters, operations and marketing teams in these equipment finance organizations that have found innovative and powerful ways to present and ultimately deliver on the equipment finance value proposition to the end-user.
It’s not just the business originators who are creating awareness to our industry; rather it’s the entire team making up an equipment finance organization that differentiates equipment finance solutions from standard loan products. The day we stop valuing our team members and give all the credit to the economy and all the other factors I mentioned earlier, will be a sad day. We may remain in a strong economy, but your equipment finance business will eventually wither away without the right team in place to deliver your company’s unique value proposition consistently and effectively.
Cheers to the Equipment Finance Professional!
So, here’s to the equipment finance professional! Keep up the good work and remember, it takes a team to win in this game…