Reflections of the Recession
By Kevin F. Clune, CLP
When I was approached by a representative of ELFA, the Equipment Leasing & Finance Association, for an interview about the effects of the recession on the leasing business, I readily agreed. I was flattered to be featured in a national industry magazine and it was also an opportunity to tell my side of the story.
Having been in the industry for 38 years and experiencing many fluctuations, including a prime rate of 21.5%, this recession hit the leasing industry particularly hard. In the recession of the early 80’s demand was still high for leasing. Those of us that had access to capital booked business at a ferocious clip. In this most recent recession demand is off due to the glut of cash on hand in American businesses in addition to anemic equipment sales.
Even though many in the leasing industry, including my business, have had to make some adjustments, there are leasing companies who are no longer in business. In hindsight, there are certainly lessons to be learned. As I reflected on the reasons for this state of the leasing industry, I comprised a list of factors that may have positively affected my business and others like Clune & Company.
- Clune & Company is a small sized business that can be flexible and adapt to changes far more easily than larger competitors.
- A strategic planning initiative in 2007 had positively changed our business model.
- Red-Lining by larger competitors in the industry gave us unique opportunities.
- Our business serves a broad base of commercial equipment vendors
- As an Independent lessor, Clune keeps their own portfolio and establishes relationships with lessees, who may lease other equipment directly through Clune.
- Savvy credit analysis is key to establishing a solid portfolio.
- Technology has “helped to level the playing field”.
- Access to capital at a good rate is essential.
Overall, the reflection on the economic downturn was a good exercise for me personally. It made me realize that even a relatively small enterprise can find markets to serve and compete with much larger companies. For every business owner who meekly accepts the “captive” lease contract, there are others who choose to have a more personal relationship with a company that appreciates their business and beats the captive. The same holds true for some vendors who value their customers and want to offer an alternative to the mega lease companies.
Read the entire interview here…"Off the Grid, On Target" To read only Kevin's comments turn to page 16
Kevin F. Clune, CLP
Clune & Company
