The trend of equipment acquisition deferment had a big impact in 2016, but activity saw an uptick in early 2017 after uncertainty around the election was resolved, says Loren Hill, senior vice president of manufacturer and vendor alliances for Key Equipment Finance, in a recent Monitor article.
"We definitely saw businesses deferring equipment acquisitions due to economic uncertainty in 2016," Hill told the Monitor as part of a roundtable of vendor finance leaders. "We also saw some companies delay their equipment acquisitions by a quarter or two, and others downsized their spending, in particular in the software and services space. In this sector, we saw companies move forward, but with smaller, shorter-term engagements than originally planned."
Asked about the pros and cons of working with several finance suppliers in a shared relationship to serve manufacturers and dealers, Hill said: "There are many cases where working with multiple finance partners can be beneficial for everyone involved, particularly when the various partners have different specialties, for example, in goverment, managed solutions, mid-ticket, small-ticket and other specific areas of expertise. Few banks can be all things to all people, and we welcome opportunities to be part of a thoughtful, strategic financing team comprised of companies that bring different specialties to the table. In these cases, we can all focus on our core competencies with less pressure to do business that is outside of our comfort zone. When the skills and specialties of the finance partners complement each other, everyone wins.
"However, when a vendor brings in multiple players with the same core competencies just for the sake of negotiating a lower rate, the relationship becomes more transactional and less strategic. The reality of this is that companies choosing to work with banks on a purely transactional basis are sacrificing a long-term, strategic partnership with their financing partners."
See the article in its entirety here:
