3 key themes to watch at Equipment Finance Connect
NASHVILLE — The equipment finance industry is seeing a slight downturn as interest rates remain elevated and banks tighten their lending practices, with dealers and lenders looking to continue serving their customers while refining their finance and insurance operations.
Equipment Finance Connect 2024 kicks off Sunday, May 5, at 5 p.m. at the Omni Nashville Hotel, and features three days of networking and educational sessions focused on best practices to enhance finance operations.
Equipment finance new business volume dropped 7% year over year in March, while past dues and charge-offs declined 0.2 percentage points during the same period, according to the Equipment Leasing and Finance Association (ELFA). In addition, equipment finance industry confidence declined in April, landing at 52.9, down from 55.2 in March, according to the Equipment Leasing and Finance Foundation.
Farm equipment and transportation equipment sales dipped for March and the first quarter of 2024, according to the Association of Equipment Manufacturers and ACT Research, respectively.
Still, there are positive signals, with year-to-date new business volume increasing 0.5% YoY, according to the ELFA. Meanwhile, new orders and shipments for core capital goods, which exclude aircraft and defense, both rose 0.2% month over month in March, according to the data released last week from the Census Bureau.
With more than half of 2024 to go, what can lenders and dealers do to improve and refine economic performance in equipment finance this year and in the future? These will be central questions addressed at Equipment Finance Connect.
Here are three key themes the conference sessions will address:
1. Managing tightening credit standards
As the lending environment and credit standards continue to tighten, dealers and lenders face a more difficult financing landscape for themselves and their customers. The Federal Reserve held rates steady to start May, keeping credit standards tight. Dealers and lenders must refine their ability to evaluate deals and partnerships.
2. Technology is evolving
Dealers and lenders are facing a significant leap forward in equipment finance technology as the sales and financing process continues to digitize, and new and budding technology continues to emerge along each step of the customer journey. As dealers and lenders look to refine their financing operations, the adoption of new technology will play a key role in operations in terms of compliance and efficiency.
3. Forecasted demand decline
Forecasts project a decline in demand for agriculture and transportation equipment in 2024, while construction equipment demand will remain mixed. With equipment demand trending downward and access to funds remaining tight, the ability to move equipment will face challenges, but planning and optimization can help dealers and lenders overcome the challenges.
Follow all the latest news from this week’s Equipment Finance Connect here.