Community banks helped to expand into equipment leasing

The Alta Group has joined the Independent Community Bankers of America (ICBA), which represents more than 6,500 community banks across the US, to serve as a resource for members that are launching or expanding equipment leasing and finance operations.

Andrew G. Mesches, an Alta director with 30 years’ experience in the regulated environment of commercial lending and bank-owned equipment finance, said that liquidity in the marketplace is encouraging more community banks to start equipment leasing programs or further develop existing ones.

“Community banks are looking for other sources of revenue outside of traditional bank products, and equipment finance can be a good source of revenue with high yields,” Mesches said, but warned that equipment leasing presents challenges as well as opportunities for financial institutions.

“Banks should approach the equipment leasing opportunity with the understanding that it is a specialized business that requires specific competencies. It is the only product within the bank that involves actual ownership and maintenance of equipment, and with that the need to consider residuals, the aftermarket for equipment at the end of the lease term, regulatory issues, tax considerations, managing the risk of liability, and other factors,” Mesches explained.

Mesches said Alta sees its role as helping bank personnel better understand the specifics of equipment leasing, providing consulting services across a range of activities including market entry, strategy, benchmarking, credit operations, risk management, mergers and acquisitions, legal support, software applications and systems, asset management throughout the entire equipment lifecycle and professional development.

“We have consultants in localities across the US that provide comprehensive services to bank equipment finance operations, including functional-specific as well as broad-based professional development,”Mesches said