Equipment is a significant cost component for any transportation company, regardless of mode. The Equipment Leasing and Financing Association (“ELFA”) expects demand for new and replacement equipment to increase at a healthy pace in 2015. In their latest economic outlook report, ELFA released it’s own version of Letterman’s Top 10 – the Top 10 Equipment Acquisition Trends for 2015. ELFA is predicting that investment in equipment and software will reach all-time highs this year. The increased investment will be spurred by continued growth in the US economy, pent up replacement demand, and an improving market for credit. The increasing likelihood of Fed interest rate increases this year will also encourage those on the fence to make their equipment investments now.
ELFA forecasts that non-traditional financing sources, such as venture capitalists, insurance companies, and even crowd funders will play a larger role in providing funding for equipment purchases. They also anticipate that the Financial Standards Accounting Board (“FASB”) will finally release their new accounting standards for accounting for equipment leases in 2015 – eliminating a bit of uncertainty in the markets. The final rule will not likely be effective before 2018 and is not expected to negatively impact the benefits of lease financing as a source of capital.
For more information on the 2015 trends, please click here.