Optimism continues in the commercial equipment leasing and finance industry. I traveled extensively in the month of October, facilitating on-site visits with my clients and attending two national conferences (NEFA Funding Symposium and the ELFA 56th Convention). The record attendance at both conferences is a testimony to the current activity in the industry. My on-site visits confirmed that both banks and independent finance/leasing companies are actively positioning themselves for growth and sustainability.  I want to share the following general observations:

• Our industry is changing. Automation, efficiencies, and internal processes are adapting to the changing needs and wants of our commercial clients.
• Competition is fierce, especially for the highest quality assets. Margins continue to be squeezed, especially for the commodity players (specifically banks).
• With only a few exceptions, portfolios continue to perform exceptionally well based upon historical data. Many perceive low delinquencies to be the "new normal." I am constantly reminding professionals to maintain their credit underwriting discipline to avoid the next bump in the road. Although we cannot predict when the bump in the road will occur, it will come, and the most prudent professionals are preparing for it.
• Independents are becoming more equipment-centric. They are providing real expertise to the market.  They are realizing up-side potentials because of their ability to generate significantly more business and because of their ability to re-market equipment when needed, or at the end of lease terms. I am encouraged by the trend, but warn professionals to not be overconfident, until their expertise has been fully tested in a down market.
• A slight increase in yields may be a "shot in the arm" for some participants. A slight increase in yields will cause commercial clients to act now, rather than risk a future rise in equipment and financing cost. A sense of urgency will cause a jump in origination. Hopefully, a slight rise will also give participants an excuse to raise their margins. Many agree that the industry is not being correctly rewarded for the risk it is assuming. That trend is not sustainable over the long run. A little inflation could be a welcome remedy - but too much would definitely be a challenge. Watch out for what you wish for.
• The potential in the market continues to grow for those professionals and organizations that understand their position in the market, know their clients, and strive to offer superior products and services.