Recession Concerns Spur Interest in Equipment Leasing

As small businesses, agricultural producers, and other community bank customers deal with inflationary pressures on the production side, recessionary concerns are causing added anxiety for some. As a result, more people and businesses are leasing – and we expect that increased leasing activity to continue, based on previous historical patterns of significant growth during periods of inflation or recession.

Leasing equipment is already very popular with capital-intensive industries, such as trucking, manufacturing and construction-related companies, where 100% financing under a lease-to-own structure is incredibly helpful. As a result of the government flooding the market with cash early in the pandemic, liquidity generally was not a problem for many businesses. Now, as liquidity levels begin to recede and normalize, concerns over maintaining revenue levels, liquidity and profit margins during a possible recession are front and center. When combined with a possible tightening of credit availability in the market, based on historical trends, more businesses are looking to use a lease-to-own method of acquiring equipment, for two main reasons:

1. Under a lease-to-own structure, customers can acquire equipment with 100% financing at highly competitive rates. They conserve cash, and they keep all depreciation benefits.
2. Customers may begin keeping a watchful eye on their bank credit lines and can use leasing as a way to avoid tying up those lines.

As leasing activity continues to grow, community banks could benefit by positioning themselves to capture income and develop or strengthen customer relationships from leasing opportunities – opportunities that will land elsewhere if your customer has already decided to lease.

Partnering with Bell Bank’s correspondent bank leasing program is an easy solution for community banks. As a trusted partner with experience, expertise and strength, we can work with you to offer a wide variety of competitive leasing solutions to your customers while generating significant origination fee income for your bank. The business opportunity and fee income stays with your bank.

Most bank customers do not discuss leasing with their bankers, mainly because they don’t know their bank offers leasing. As a partner with Bell, your bank can easily and immediately offer leasing when needed. Bell can also assist you with marketing material that can increase customer awareness of your leasing options. Together, Bell will work collaboratively with your lenders to provide and deliver the most competitive lease structures available.

Getting started and partnering with Bell in the correspondent bank leasing program has never been faster or easier. Simply contact me or your correspondent banking officer today. We look forward to working with you and your team in providing your customers the very best in leasing.

Mike LaSalle
SVP/Correspondent Bank Leasing Director
Direct: 952-905-5155
mlasalle@bell.bank