If you like uber, you will like a lease  

 

 Kevin F. Clune, CLP

“Uberization will come to equipment finance.” This is one of the top trends according to a leading industry newsletter. 

The article described this phenomenon as the mentality that says, “It’s a hassle to own things.” I would argue that this is the bedrock principle upon which the entire leasing industry was built.

While the author cites the rise of small business and the millennial workforce as the catalyst for this dynamic, existing lease programs are also tailor made to satisfy this “Uber” factor. There is no need to reinvent the wheel. 

With interest rates at record lows since 2008, large companies have been able to use their cash reserves to purchase equipment and invest in assets. However, the article contends that small business is “hitting its stride” and not only will lease their equipment, they also want to include managed services, an added feature typically offered in a lease contract. The idea of the equipment being financed with future income is attractive to these young entrepreneurs.

As millennials increase in the workforce, this mindset of an operating lease vs. ownership will shift toward the former option. With a lease, a business is not stuck with extinct equipment that renders them uncompetitive. This group of business owners and managers care less about stuff and more about serving their customer, alleges the writer.

Finally, an aversion to ownership is as old as the concept of leasing itself which dates back to Ancient Egypt but became prominent in this country with the leasing of railcars in the 1800’s. We can just let the millennials think that they re-invented the wheel with the impending increased demand for equipment leasing of capital assets and managed services. 

Let us know how we can serve your needs, 

Kevin F. Clune, CLFP
Clune & Company