While the long-lasting effects of the coronavirus pandemic will continue to be felt for months and years to come, there is a reason for optimism as we head into the summer months. That is certainly true when it comes to commercial lending.
According to the Equipment Leasing and Finance Foundation (ELFA), COVID-19 may have “accelerated digital adoption by seven to 10 years.” The result? An estimated $1.8 trillion is expected to be spent on capital goods and fixed business investments this year, with many of those assets needing some sort of financing solution.
In this blog, we’ll outline how businesses have adjusted their operations due to the coronavirus and why they are re-examining their equipment needs. If you need help determining if your business needs to re-think its leasing and financing strategy, you may want to reach out to an experienced independent commercial lender like Team Financial Group to learn more about your options.
RELATED: We Make Equipment Financing Fast, Flexible, and Easy
Businesses Are Still Adjusting Their Equipment Needs Due to the Coronavirus
One of the biggest impacts that COVID-19 had on businesses of all sizes, was an increase in the mobile workforce and how operations subsequently reconfigured their technology equipment to continue running smoothly. With many employees forced to work out of their homes for long stretches, businesses had to quickly adjust their resources so remote workers could continue to do their jobs.
As remote workers are starting to return to the workplace, businesses will need to determine if their technology equipment needs to be updated or expanded again. Even businesses that embrace a hybrid work model will need to evaluate if their equipment is flexible enough to allow workers to successfully operate both remotely and at the office.
And how are businesses going to acquire that technology equipment? The vast majority – nearly 8 in 10, according to the ELFA – will use some sort of equipment financing solution to modernize operations and boost growth.
4 Factors to Consider When You’re Exploring Commercial Lending Options
The coronavirus pandemic forced many businesses to rethink their business operations. While things haven’t necessarily returned to normal just yet, more companies are beginning to invest in equipment and software to meet increased demand and build for the future.
As a result, here are four commercial lending trends that we’ll be keeping our eye on throughout the rest of 2021 and beyond:
- Interest rates: In relative terms, interest rates have been very low for the past two or three years, and it appears that the Federal Reserve will continue that trend to make financing easier to obtain and help stabilize the economy. If you’ve been waiting to finance equipment, now might be the time to act.
- Increased demand for construction equipment: As the economy continues to recover, more businesses will be looking to acquire heavy equipment for the construction or renovation of homes, offices, and production facilities. That could create supply shortages or delays that can affect project timelines.
- The need for digital technology: The reliance on collaborative tools like Zoom and Microsoft Teams certainly increased last year during the pandemic. Businesses that can quickly modernize more of their equipment through automation or artificial intelligence, for example, will receive a competitive edge over companies that are forced to wait.
- Heightened cybersecurity: As businesses modernize and upgrade technology, they should adjust their cybersecurity strategies as well to avoid new viruses and scams that pop up on a daily basis. For example, new construction equipment is being fitted with the Internet of Things (IoT) devices, and securing those tools is vital to prevent the costly effects of downtime, hacks, and breaches.
RELATED: How to Choose the Right Commercial Lender For Your Business
Contact Team Financial Group to Learn About Your Equipment Financing Options
Need help determining how recent commercial lending trends might affect your business? We can help you stay ahead of the curve. We specialize in offering fast and flexible equipment financing for a wide range of small businesses.
Call Team Financial Group today at 616-735-2393 or fill out our contact form to talk with a financing expert. If you’re ready to apply for financing, fill out our short online application and we’ll get the process started.
For Construction Pros. (2021, January 25.) “Top 10 Trends That Will Influence Equipment Acquisition in 2021.” Retrieved from: https://www.forconstructionpros.com/business/business-services/financing-insurance-leasing/press-release/21244352/equipment-leasing-and-finance-association-top-10-trends-that-will-influence-equipment-acquisition-in-2021
Vogt, A. (2020, November 18.) “5 Ways COVID-19 is Shaping the Equipment Finance Company of the Future.” Equipment Licensing and Finance Association. Retrieved from: https://www.elfaonline.org/news/industry-news/read/2020/11/18/5-ways-covid-19-is-shaping-the-equipment-finance-company-of-the-future
The content provided here is for informational purposes only. For personalized financial advice, please contact our commercial financing experts.