Equipment Finance in 2023: Our Top Takeaways from NEFA Finance Summit
Shareholders Sara Costanzo and Andy Voorhees recently attended the National Equipment Finance Association’s (NEFA) 2023 Finance Summit in San Diego, CA. This conference serves as a meeting place for those in the equipment finance industry and offers timely industry education and in-person networking opportunities. Now, Sara and Andy are sharing their top four takeaways!
1. Growth in diverse areas
Attendees of the event were invited to attend the Inaugural Black Equipment Finance Network opening reception. This network helps facilitate and increase participation of African American professionals, promoting diversity in the equipment finance industry. Along those same lines of diversification, the conference also included a Women in Leasing Luncheon, for women in the industry to connect, network, and develop long-term personal and business relationships. Both events were very well attended, leading to expected growth in the upcoming years.
2. Economics – a recession is coming
Eight out of ten businesses use leases, secured loans, and lines of credit to support day-to-day operations. Most economic indicators point to a mild recession by the third or latest the fourth quarter of 2023. With consumer spending still high, and credit card debt soaring with little savings building, financial markets remain volatile, so now is the time to select your business partners, who can help when defaults arise.
3. Challenges in recovery
State laws are not always uniform, and questions arise as to what additional steps may need to be taken with respect to transactions in states in which the lessor or lender has no physical presence. Equipment leasing and financing companies want to expand their outreach, but ensuring all regulations are followed, and collateral is not only secured but security interests are perfected, is not such an easy task. Collateral can include titled and untitled assets. When it comes time to repossess the collateral, having a business partner that understands the laws in each state is critical.
4. With the Federal Reserve increasing another 0.25% lending in A-B spaces is tightening
While rising interest rates give finance companies and lenders an opportunity to increase earnings by pushing up rates charged on loans, the rise in rates also negatively impacts the customer’s balance sheet by increasing the cost of liabilities and decreasing the value of investment securities held as assets. The overall result is that primary lenders may shy away from booking those deals, but that does give subprime lenders an increased opportunity to lend in that same space.
If you have questions about these topics, feel free to connect with Sara and/or Andy at any time.
This blog is not a solicitation for business, and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.
If you have questions about these topics, feel free to connect with Sara and/or Andy at any time.
This blog is not a solicitation for business, and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.
