EQUIPMENT LEASING AND FINANCE ASSOCIATION - PowerPoint Presentation

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EQUIPMENT LEASING AND FINANCE ASSOCIATIONEquipping Business for Success

Ralph Petta

President & CEOEquipment Leasing and Finance Association

Top Ten Equipment Finance Acquisition Trends

Associated Equipment Distributors Financial/HR SymposiumApril 27, 2017

Brian HollandPresident & CFOFleet Advantage, LLC

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Ralph Petta

President & CEO

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Who is the Equipment Leasing & Finance Association?

Regular Member Companies – Over 350

Associate Member Companies – Over 180Who is the Equipment Leasing & Finance Association

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Banks

(24%)

Banc of America LeasingBMO Harris Equipment FinanceCitizens Asset Finance

Key Equipment FinanceU.S. Bank Equipment FinanceWells Fargo Equipment Finance

Independent/Financial Services (34%)Ascentium CapitalECN Capital Corp.Fleet AdvantageGreatAmerica Financial ServicesLEAF Commercial Capital

Lease Plan U.S.A.

Summit Funding Group

Captives

(10%)

Cisco Systems Capital Corp.

Dell Financial Services

GE Capital Industrial Finance

John Deere Financial

Toyota Industries Commercial Finance

Volvo Financial Services

Service Providers

(32%)

Over 180

Who is the Equipment Leasing & Finance Association?

Who is the Equipment Leasing & Finance Association?

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*

As of March 31, 2017

Historical MembershipRegularAll Others*

Historical Membership

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Equipment Leasing & Finance Foundation

Industry Research Studies, Publications, Guest Lecture Program

Supported 100% by charitable donations

Dedicated to inspiring thoughtful innovation and contributing to the betterment of the equipment finance industry

Equipment Leasing & Finance Foundation

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Investment

Equipment and software investment will pick up, surpassing $1.5 trillion.

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Expect firm consumer spending in 2017, supporting faster economic growth. Meanwhile, oil prices have recovered from extreme lows in 2017, and improvements in drilling technology should help the American shale industry remain competitive at lower prices.

Strong consumer spending and firming oil prices

1Net exports shaved almost two percentage points off of GDP in Q4 2016, after contributing significantly to growth in the prior quarter. The continued strength of the U.S. dollar may dampen exports in 2017.Net exports have shown signs of weakness4The prospect of substantial regulatory and corporate tax reform — along with the possibility of the repatriation of profits held abroad — have led to sharp increases in business confidence, which suggests that equipment investment should improve.Investment remains positive

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The labor market has been operating at or near full employment, even as the participation rate has edged up. Inflation will cross the 2% threshold in the coming months, which we expect will lead to 3-4 rate increases by the Fed in 2017.Increasing number of Fed rate hikes in 20172

Strong consumer spending and business investment, along with firming oil prices, should drive stronger growth in 2017.

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2

Financing

Equipment financing will grow, with nearly 8 in 10 businesses financing equipment.

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The equipment finance market is poised for a period of modest, but steady growth

Equipment Finance Industry Size

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3

Public Policy

More business-friendly federal policies will bolster business investment and economic growth.

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Monthly Confidence Index

Monthly Confidence Index

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4

Trade

Changes in trade policy will risk headwinds for equipment exports.

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5

Energy

The oil industry drag on the U.S. economy will cease, leading to increased oil industry production and investment.

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Equipment

Improved market conditions will benefit key verticals, including oilfield and mining, materials handling, industrial and construction equipment.

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Top 10 Equipment Finance Acquisition Trends

2014 NBV: $103,023,747,000 2015 NBV: $114,529,112,000

$21.5 ($B)$24.4 ($B)

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Interest Rates

Businesses will need to assess and plan for financing options as the Fed raises rates.

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Top 10 Equipment Finance Acquisition Trends

Ever-Tightening Spreads

Top 10 Equipment Finance Acquisition Trends

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Customers

End-user desire for convenience will drive innovations, from “fintech” to managed solution transactions to e-chattel paperless transactions.

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Customers

End-user desire for convenience will drive innovations, from “

fintech” to managed solution transactions to e-chattel paperless transactions.Continued -

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Accounting

Businesses will prepare in earnest for the new lease accounting rules to take effect beginning in 2019.

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Accounting

Businesses will prepare in earnest for the new lease accounting rules to take effect beginning in 2019.

Continued -

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10

Wild Cards

Positive and negative external risks, from infrastructure spending to geopolitical shifts to the threat of terrorism, could impact investment.

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Brian Holland

President & CFO

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WHY LEASE?

Preserve Cash– 100% Financing

Tax Benefits Keep Up-To-Date; Avoid Obsolescence Outsource Asset Management Accelerate ROI Benefit From Bundling Customize Your Terms Financial Reporting - New Accounting Rules Still Favor Leasing Over Debt Convenience

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USE LEASING TO INCREASE REVENUES

Strategies

to Foster Growth and Enhance Margins

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EMBRACE TECHNOLOGY

Use Technology

to Create New Markets

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LOWER COSTS

Focus

on Total Cost of Ownership

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IMPROVE PRODUCTIVITY

Economic

versusFunctional Obsolescence

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OFFER FLEXIBILITY

Design Solutions

to Match Changing Needs and Usage Patterns

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EXPAND OFFERINGS

Look for

Less Crowded Spaces to BringSpecific Expertise

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PROVIDE ACTIONABLE INSIGHTS

Use Data

to Help Customers Make Better Decisions

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Contact Information

1825 K Street, NW, Suite 900

Washington, D.C. 20006Phone: 202.238.3400www.elfaonline.orgwww.leasefoundation.org