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.

Improving Dealer Relationships

From the desk of Nate Burnett, Director of Leasing:

Harvest is winding down in this part of the country, and our ag customers are thinking about 2017 equipment and farm plans.  We've talked in the past about how important dealer relationships are to our leasing portfolio at FOCUS Bank.  I wanted to share with you a new venture we are working on with a local center pivot irrigation dealer.  In 2017, Mid-Valley Irrigation, will launch a new pivot refurbishment program.  Their plan is to completely overhaul existing pivots with all new "guts".  The major structure will remain, but new parts, nozzles, panels, etc will be installed.  In essence, the customer will have a new pivot for about 1/2 the price of a purchasing a new pivot.  We will be assisting with the lease financing for the customers.  In addition, the insurance companies are loving the idea and are onboard as well.  What a great way to reinvigorate your leasing program!  

Best wishes for the remainder of 2016.   

TRAC Leasing

We have been contacted in the past few months by a few users that requested information on TRAC Leasing.  This particular type of lease is used for vehicle leasing, more directly, Tractor Trailer lease financing.  The term TRAC is an acronym for Terminal Rental Adjustment Clause.  These types of leases on vehicles are structured where the Lessee and the Lessor agree that at the end of the lease term and the residual is due, the vehicle will be sold (if the Lessee does not want to purchase) and the Lessee is responsible for any shortfall.  In the case that there are excess proceeds after the sale, the Lessee is entitled to receive them.  This concept gives the Lessee a financial incentive to maintain the vehicle properly and not leave it in disrepair with excess mileage.  This type of lease can be treated either as a true operating lease or a finance lease depending on the structure.  We do not and have never written these types of leases at FOCUS Bank nor do we anticipate delving into the "over the road" truck industry.  However, some of those markets are very strong, and if your bank is located in such, we would be very glad to share all the information we have regarding the TRAC Lease option.

Britt McConnell
Community Bank President

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

Best Practices for Cross-Selling & Upselling


With increased competition in the lending and leasing world, it is crucial to make sure your bank is doing all they can to cross-sell and upsell existing customers. 

Here are 3 best practices to implement when maximizing the benefits of cross-selling & upselling:

1. Listen for Cues and Respond Appropriately.
Make sure the products and services you recommend are relevant to the customer's needs.  This isn't about just pushing a product/service on a customer.  It's about making sure it fits with their business, their financial goals, etc.  Often times, the customer doesn't realize they need another product but when you listen, you can make additional suggestions to help them become more successful. 

2.  Focus on Providing Maximum Value.  
You must be able to demonstrate value to the customer so the offer becomes a "no-brainer" to them.  Sometimes the best way to accomplish this is to show the customer that the value isn't on the sticker price but on the depreciation.  Help the customer to see the big picture during this phase and make the suggested product/service very tangible. 

3.  Pay Close Attention to Timing and Context.
Make sure to always handle the customer's immediate needs before attempting to cross-sell or upsell them.  Timing is everything.  If the customer is frustrated or has a complaint, now is certainly not the time to convince them to buy something else.  The best time to cross-sell or upsell is right after you have solved the customer's problem.  Your credibility is high and so is their trust in you at this point.  Learning to read the situtation properly is critical at this phase. 

Finally, make the offer but always be positive.  Never pressure customers because this only creates negative feelings and bad PR. If your intentions are to make money, the customer will know it.  However, if your intentions are to provide excellent customer service and keep happy customers, cross-selling and upselling will increase your bottom line. 

Industry Confidence Steady in December

The ELFA reports confidence in the equipment finance market is 63.4, steady with the November index of 64.2.  In addition, signs point to a positive 2015 and expect to see slight increases in delinquency and credit losses.  According to survey results, 22% of respondents believe the demand for leases and loans to fund capital expenditures will increase over the next four months. 

To view the full report, check out:

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

Fall & Winter Leasing Workshops

Now is the perfect time to begin planning your fall and winter leasing workshops.  This a wonderful opportunity to invite local business owners from the agricultural, municipal and commercial markets to learn more about the benefits of equipment leasing.  These workshops are simple and very afforable to host by following a few steps:

  • Select a convenient location (community center, library, hotel conference room)
  • Provide breakfast or lunch
  • Arrange for guest speakers - accountants, bank president, etc.
  • Offer incentive to attend - free gift, door prizes, etc.
  • Mail post cards 2 weeks prior and create a calling campaign to increase attendance.

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!!