2017 Q1 Update

According to the Equipment Leasing & Finance Foundation, in 2017, the U.S. economy is poised to experience moderately strong growth of 2.7%. After a growth pause during the first half of 2016 in which low energy and commodity prices contributed to weak business confidence and investment, the U.S. economy appears to be back on solid footing.

• Credit market conditions are healthy and are not expected to inhibit business investment or the equipment finance industry.
• Struggles for the energy, manufacturing and export sectors posed a major drag on business investment in 2016, but early indicators point to growth of 3.0% in equipment and software investment in 2017.
• The Foundation-Keybridge U.S. Equipment & Software Investment Momentum Monitor, which is included in the report, tracks 12 equipment and software investment verticals. A number of verticals are primed to improve in the first half of 2017.

Over the next three to six months:

• Agriculture machinery investment growth will likely remain negative
• Construction machinery investment growth should improve.
• Materials handling equipment investment growth should remain stable.
• All other industrial equipment investment growth will likely rebound.
• Medical equipment investment growth should remain stable.
• Mining and oil eld machinery investment growth is expected to improve.
• Aircraft investment growth will likely strengthen.
• Ships and boats investment growth is set to improve.
• Railroad equipment investment growth should continue to strengthen.
• Trucks investment growth is poised to accelerate.
• Computers investment growth is likely to improve.
• Software investment growth should continue to strengthen.

Earning a Return on Your Leasing Program

If your bank is anything like my bank, we often find ourselves excited about a new product or service, do all our risk management, approve the purchase of the product or service, train our staff....And then....we put it on the shelf.  Yet, we still expect it to earn a return on our investment.  If this scenario sounds familiar, you're not alone.  As community bankers, we wear multiple hats and juggle tasks that are normally handled by several people in mega bank operations.  However, if we are to stay competitive and make good use of our existing products, we must devote the time and staff necessary to get our leasing program off the shelf and out the door. 

As a leasing bank with 25+ years of experience, we have found the key to success is to designate a direct sales person.  This doesn't mean that you must go out and hire additional staff.  BUT, it does mean that you will need to select one of your best lenders or most experienced sales staff and create a plan allocating time in his/her schedule to do the following things:

• Create a database of prospects & dealers (use CRM software to manage contacts, sales pipeline, generate management reports, etc.)
• Cultivate relationships with prospects & dealers (equipment dealers are a good source of credit/character references.  Provide factor sheets to them for easy payment quoting.)
• Utilize tools like EDAdata software (helps with developing new prospects & seeing where current customers are getting other financing.)
• Cultivate relationships with real estate agents (aids in cross-selling loans for real estate/land.)
• Call on former lease customers
• Keep up with leasing industry trends (utilize sources like ELFA, Equipment Leasing and Finance Association to monitor trends.)
• Follow-up, Follow-up (with a call, note, visit, email, etc.)

It's time to knock the dust off your leasing program, put some boots to the ground, and turn over those rocks.  Leasing sales are out there.  I challenge you to review UCC filings in your area. You'll be amazed at the amount of equipment being financed in your back yard.  As always, we are here to help you build your leasing program and wish you much success this year. 

Britt McConnell
Community Bank President

US Business Borrowing for Equipment on the Rise

According to an article published in September by ELFA, U.S. companies' borrowing to spend on capital investment rose in August.  These companies signed up for $7.2 billion in new loans, leases, and lines of credit last month, up 13% from a year earlier. 

The Equipment Leasing & Finance Foundation said its confidence index rose to 60.2 in September from 58.9 in August.  A reading of above 50 indicates a positive outlook.

For the complete article, please visit
http://www.reuters.com/assets/print?aid=USnS8N0OQ0520140923

Be Honest...Is Your Bank Actively Leasing?

In the past few months, we have been discussing the Banclease program with prospects, existing clients and former clients.  One common theme we have stumbled across is that most banks aren't leasing because "they just don't know if they have the market for it."  As with all community banks, budgets are tight, additional staff is not feasible and current staff is already juggling a myraid of responsibilities within the bank.  So how do we answer this question?  Well, EDA (Equipment Data Associates) offers an enhanced UCC database.

This database contains:

• 4.5+ million borrowers/lessees
• 20+ million verified transactions
• 25+ unique search filters
• 500+ equipment types
• Recent financing activity
• Reverse lender search
• Lease expiration alerts
• Lead automation and more

Now is the time to test the old marketing theory and decide if the majority of your business truly comes from existing customers.  Check out EDA's website http://www.edadata.com/features and watch their product video http://www.youtube.com/playlist?list=PLN-pxYxOGfYsQ9Q4mk5lD4c0EpXbl7iE0 to see if this information can help answer that buring question "Do we have the market for leasing?"  I think you'll find you do!!