Evolution of Equipment Finance

Evolution of Equipment Finance

On ELFA’s 60th anniversary, reflecting on the past and looking to the future

THE YEAR 2021 MARKS ELFA’S 60TH ANNIVERSARY. We’re celebrating by taking a look back as well as forward, imagining what the future will hold. In this issue we talk to Martha McGuire, Executive Vice President at First Bank Chicago, a division of First Bank of Highland Park, which is celebrating 20 years as a member of ELFA. We’ll talk to other companies celebrating “milestone” ELFA membership anniversaries throughout 2021. 

2021 marks First Bank Chicago’s 20th year as an ELFA member. To what do you attribute your company’s longevity in the marketplace? 

Our CEO, Randy Green, started the Lease Finance Group in 1987 when there were very few banks involved in the lease finance industry. The times have certainly changed as the list of our competitors would fill this entire page. I credit our CEO with being very selective of the lessors we do business with and serving higher quality credits. Having started in the business so long ago, bank management has literally grown in tandem with the management teams of many of our lessors and faced many of the same issues. We have forged strong bonds of trust and reciprocity. That goes a long way in doing business together. Having a CEO who started the bank’s Lease Finance Group is truly a competitive advantage. When challenges arise (and they always do), our team can go straight to the top without first having to explain leasing. 


Why is it important for your company to be a member of ELFA?  


There are a number of reasons:

• Membership creates visibility for First Bank Chicago.
• The association provides access to important industry information.
• The association protects the industry’s prospects with federal and state lobbyists. 
• Membership offers learning through webinars and convention sessions.
• Being a member affords us occasions to:

o  Network and build relationships
o  Gather informal industry information:

■ What are companies seeing or doing in the marketplace
■ Who has joined or left organizations and  why
■ What are advantages we may not be thinking of or taking advantage of

The equipment finance industry is evolving. What are some ways you’ve seen the industry evolve over the course of your career? In what ways would you like to see or do you expect to see the industry evolve by ELFA’s 100th anniversary in 2061? 

I’m a relative newcomer to the industry, having been appointed to manage the Lease Finance Group in 2016. I’ve learned a lot and still have lots to learn. That said, I think the industry will change tremendously by 2061. Even during my short tenure, it’s been interesting to watch the megabanks take market share from independent lessors. The banks have a ready salesforce that is responsible for staying in regular contact with clients to monitor their credit quality and cross sell. This is a tremendous advantage as they’re already extending credit so they’ve defined their credit appetite and by staying in touch they’re more likely to become aware of opportunities. By definition, the banks do business with creditworthy companies so we’ve seen many independents lower their credit standards to maintain volume. As you might guess, they’ve also raised pricing to compensate for the risk. I expect this trend will continue.

Something else that I see is the fact that a lot of independents started their business in the 1980s. If those leaders were in their 30s then, that means they’re in their 70s now and, if they haven’t already, will soon be thinking about selling the business. The face and culture of the industry will change as these industry stalwarts retire.

Lastly, we’re at the beginning of a technological revolution and technology will forever evolve. Using e-documentation, creating websites that lead companies to self-identify as real prospects, using credit scoring for evaluating credit and applying artificial intelligence will ultimately change how leasing is done.