Equipment Leasing & Finance Magazine is tackling the economic outlook for equipment financing in its current issue, and Key Equipment Finance's Brian Madison, who chairs the Business Council Steering Committee, contributes to the dialogue.
“We did a roundtable with the Captive and Vendor Finance Business Council Steering Committee (BCSC) in January, and collectively everybody felt like they had a pretty strong December, which is exactly what the data showed,” said Madison, senior vice president at Key Equipment Finance, in the article titled "Data Indicate A Bright Picture for 2015."
Author Gwen Moran describes an upbeat picture based on industry data: "The MLFI reported a 20% increase in overall new business volume from December 2013 to December 2014, measuring economic activity from 25 companies representing a cross section of the $903 billion equipment finance sector. In a typical end-of-year spike, December new business volume was up significantly from November volume—by a robust 90%. Cumulative new business volume for 2014 rose 8% over 2013."
Madison goes on to describe the Patient Protection and Affordable Care Act now seem less of a threat to companies, so they are no longer taking a wait-and-see approach to investing.
“I think it really comes down to the fact that people have gotten used to the Affordable Care Act and they understand what the reimbursements are going to look like," Madison says. "This creates a bit more certainty, which makes people feel more comfortable with the idea of investing again."
He also describes a number of industry hot spots.
“We’re seeing growth in the markets that you’d expect to see in an economic expansion, so it’s moving goods and making goods — industrial, material handling, aircraft, rail and trucks,” he says. “Transportation assets are all looking really good right now, and we expect continued strength in this sector based on fuel prices, hiring and overall industry optimism. A lot of people are talking about a manufacturing renaissance, which is also contributing to optimism even in parts of the energy sector, particularly in distributed heat and power.”
In addition, Madison noted that decreased fuel costs are helping businesses decrease costs and improve their cash flows.
Read the article in its entirety here.