Not even a year ago, mainstream alternative finance was taking off and we wondered what it would mean for equipment finance. Were the days of going to a traditional bank for a loan on some earthmoving equipment coming to an end? Could large chunks of capital seriously be accessed in a much shorter amount of time (like, 2 days?!?)? And, help us all, is bad credit really okay?
While there hasn’t been the kind of bang that would change the landscape, the industry is certainly paying attention. From talk of the “uberization” of equipment finance to having a mention in “Dexter’s Top Picks for 2016” in the latest issue of Monitor magazine (subscription required), alternative finance is growing into somewhat of a mysterious hot button issue in the sense that no one knows exactly what to make of it yet.
At LeaseTeam, it’s definitely piqued the interest of a number of our clients as they utilize our technology to fund working capital loans and process daily ACH payments, among other things, to meet the needs of their customers.
It’s also worth noting that Fundera, Kabbage and OnDeck, all major league players in the alternative finance space, have sections on their sites dedicated to equipment loans that would appear to have been added within the past year (I say this because they couldn’t be found when we published our take on alternative finance in April 2015). These sections include things like overviews of equipment finance, the pros and cons, and who would benefit from these types of loans. It will be interesting to see the adoption rates of these new platforms, as well as how large of a piece equipment finance becomes for each business.
Like it or not, alternative finance has officially crossed over to the world of equipment and is gaining momentum along the way. Whether it’s a short-lived fad or trend of bigger things to come is still TBD, but 2016 could play a large part in shaping that.