Three items create every commercial equipment leasing and finance transaction:
1) The need of a client to acquire equipment
2) The ability of vendors to supply specific equipment, and
3) The ability of a finance or leasing company to supply the needed capital.
Historically, activity in the industry is stifled by the lack of clients needing equipment or the lack of capital. In the summer of 2021, there is a pent-up demand for new equipment sweeping through every sector. There is plenty of available capital and business activity is strong. However, the challenge is a shortage of equipment, and the shortages are keeping industry activity from exploding even more than we have already experienced in the first half of 2021. The shortage has been created by supply chain interruptions and is expected to be temporary. In the meantime, the shortages have created inflated equipment cost placing pressure on finance companies to be cautious with equipment values. (Is the current cost of equipment aligned with the long-term value of that same equipment? Will finance companies have a negative equity position when the cost of equipment normalizes after the shortage is corrected?)
As a successful originator, are you prepared for a significant increase in activity in the second half of 2021 when the shortage of equipment diminishes? Top originators are working with their vendors, end-users, and stakeholders to create systems and strategies to handle the expected, significant influx of activity when the supply chains are once again restored, and vendors can deliver equipment quickly. Successful originators are not waiting, they are prepared to maximize their results in the second half of 2021.
Survive - Thrive - Lead
This "Sales Tip" is provided by Wheeler Business Consulting.