The Equipment Leasing and Finance Foundation has published a study on the opportunities and threats presented to the leasing and equipment finance industry in the USA by alternative lenders.
"The Impact of Alternative Finance on the Equipment Leasing and Finance Industry" study said that alternative finance businesses have become part of the permanent lending and leasing landscape.
As of late 2004, alternative finance firms generated just 1.4% of all loans outstanding at banks and other lending firms in the US.
Despite the small share, the study suggested that borrowers are increasingly viewing alternative finance firm as "eager and willing to make loans or advances, albeit at higher rates than banks."
Apart from the challenges alternative finance poses to established equipment finance players, there were references to growth opportunities.
The foundation provided a list of recommendations for equipment leasing and finance companies to engage with alternative lenders.
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1.Enter the alternative finance industry directly.
2. Provide referrals or join syndications
3. Lend to or invest in alternative finance companies.
4. Join loan marketplaces
The Equipment Leasing and Finance Foundation urges company leaders to evaluate and prioritize the opportunities.
"Doing nothing, on the other hand, or hoping alternative finance is a flash in the pan that will burn itself out, is a mistake," the study wrote.