Maximizing Fourth-Quarter Equipment Financing Opportunities: A Guide for Community Bankers

Equipment purchasing activity typically increases in the fourth quarter as companies take advantage of unused accelerated depreciation allowances. It is essential to remind your clients to consider you, their community banker, as their first choice for providing the most equitable financing options.

The Equipment Leasing and Finance Association (ELFA) has observed that dedicated leasing companies are increasingly gaining market share over banks in this area of specialty lending, which often involves 100% financing. These captive and independent financing solutions are becoming more integrated into the purchase process alongside vendors, leaving banks with fewer opportunities to offer alternative financing to their customers.

As of August 31, 2024, new equipment finance volume has risen by 3.5% compared to the same year-to-date period in 2023(a). Therefore, it is crucial that your customers are aware that you, their community banker, can provide this efficient source of equipment financing promptly.

If you do not currently have a quick response loan/lease program, you can easily adopt one by contacting Bankers’ Bank. We can structure transactions that allow your customers to retain the depreciation deduction(b), while offering fairer terms and maintaining their relationship with you. Let us assist in training your lenders to identify these opportunities and capture the increased fourth-quarter volume.

(a) Source: ELFA’s August 2024 Monthly Leasing and Finance Index report posted on their website (Equipment Leasing and Finance Association’s website: elfaonline.org).

(b) Customers should always seek guidance from their CPA.