What’s happening in the bank sector of the equipment finance space?
Equipment Leasing & Finance Magazine caught up with Eric Bunnell, CLFP, President of Arvest Equipment Finance, for his perspective on the state of this sector. Bunnell is Chair of the Bank Business Council Steering Committee (BCSC), a group of 22 members that represents bank-owned or bank-related organizations that utilize internal funding. They may encompass bank departments, divisions or affiliates, or divisions or subsidiaries of bank holding companies.
From your perspective serving on the Bank Business Council Steering Committee, what issues are bank members of ELFA focused on this year?
The majority of the bank members saw their originations increase in the second half of 2024 and are optimistic that this trend will continue into 2025. Most banks took a wait-and-see approach in 2024 to work through any portfolio performance issues and higher rate environment. Now that many have worked through these challenges they are focused on net interest margin and profitability.
Everyone wants to optimize their talent and integrate AI into their bank operations. We all know it will impact every part of the equipment finance industry and everyone wants to take advantage of the efficiencies without losing sight of the relationship approach that banks are built on. Also this can help in some areas where there are talent gaps in certain functions.
There is still a lot of uncertainty around tariffs and what impact they will have on costs and availability of equipment. Many of us have seen buyers put off equipment purchases due to higher rates and now delay some purchases because of possible tariffs. At some point the equipment will need to be replaced and can’t be delayed forever.
The last item to keep an eye on is private capital entering the equipment finance industry. We have seen many new companies announce that they are interested in this space. This can be viewed as an opportunity or a threat and something we will need to monitor as it adds more competition, but can also help banks with syndication needs.
How did you get involved with the BCSC?
I have been involved in the banking & finance industry for over 25 years. I attended my first ELFA event in 2018 which was the Annual Convention. I was amazed at all the networking and collaboration between the members. I knew from attending that event I wanted to become more involved and started attending more events, including the Bank Roundtable. I was elected to the BCSC four years ago and now serve as the chair in my last year on the committee.
Would you recommend serving on the BCSC to others?
I highly recommend and encourage others to join the BCSC. They can start this year with the upcoming Bank Roundtable June 2nd in Washington DC. This event has taken place in the past in Chicago, but will be held the day before Capitol Connections this year. It is a good event to join peers and discuss topics that are impacting our industry and share best practices. Then follow up the next day by advocating for the equipment finance industry on Capitol Hill.
The Bank Best Practices Roundtable is a small, highly interactive half-day program designed to bring senior bank executives together for information sharing and critical thinking about issues facing them every day as leaders of their organizations. Learn more and register.