GE Capital, Equipment Finance is expanding its financing program for dealers to
purchase construction equipment for use in their rental fleets. About half of
U.S. dealers offer rentals in addition to sales — a figure that’s expected to
grow in 2014 and beyond.
According to the American Rental Association’s Rental Market Monitor service, the construction and industrial
segment of the rental industry will grow 9.1 percent to $24.4 billion in 2014
and 10.5 percent to $26.9 billion in 2015 in the United States.
“At a time when contractors and
construction companies are reluctant to commit to large purchases, equipment
dealers are seeing success by offering end-users the latest machines without
the big payments,” said Jim Kelly, managing director of GE Capital’s Vendor
Finance business.
Dealers typically pay cash for
equipment that costs less than $10,000 each, but may be interested in financing
more expensive equipment, Kelly explained, particularly through GE Capital’s
offer of line-item financing where equipment is purchased unit-by-unit,
allowing dealers more flexibility than an asset-based loan for a pool of
equipment.
Equipment rentals have grown in each
of the past three years, according to Frank Manfredi, president of Manfredi
& Associates, Inc., a market research and consulting firm that specializes
in the industrial sector of the rental industry. He estimates that about half
of U.S. dealers offer rentals in addition to sales and he expects the market
for equipment rentals to continue to grow.
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