More than three-quarters of U.S. middle market executives said their
companies will make at least one capital goods acquisition of
significant value over the next six to 18 months, according to Vince
Belcastro, Managing Director and Group head of CIT
Capital Equipment Finance for CIT
Group Inc. (NYSE: CIT) cit.com,
a leading provider of financing to small businesses and middle market
companies. This is one of the key findings detailed in “A
Rising Demand for Capital Goods,” the latest CIT executive vodcast
featured in the award-wining CIT
Executive Insights Series (cit.com/executiveinsights).
Vince Belcastro, Managing Director and head of CIT Capital Equipment Finance note (Photo: Business Wire)
The video is the second of a two-part series that takes a closer look at
CIT’s recent study: “U.S.
Capital Goods and Equipment Financing Outlook: A Focus on Essential
Acquisitions” (cit.com/equipmentfinancingstudy).
Desire for Increased Efficiencies Driving Demand
Over the coming months middle market executives are looking at their
platforms and planning some form of capital investment. “Demand for
capital goods is being driven by aging fleets and the desire for
increased efficiencies, especially in the transportation industries,”
said Belcastro. “The need to improve technology, and customer-specific
applications and demands, requires investment in new machinery and
technology to produce those goods and services.”
Sufficient Financing Facilitates Capital Asset Purchases
Companies that purchased one significant capital asset in the past year
did so for a number of reasons. “More than half said the most common
driver was having sufficient financing in place, while more than a third
said the business need was simply too strong to delay. Additionally, 31%
said that business opportunities required new equipment,” said Belcastro.
Careful Consideration Taken When Acquiring Capital Goods
When reviewing capital asset acquisitions, middle market executives
consider many factors. Belcastro commented, “Executives will often
consider the availability of reasonable pricing for that asset, as well
as the lease versus buy option and how that decision will affect cash
flow, and if there are tax advantages.”
Positive Outlook for the Equipment Financing Market
“According to our survey, the outlook for the equipment financing market
is positive,” said Belcastro. “I believe financial institutions have
come up with flexible structures and pricing to address consumer and
industrial demand for the assets they are looking to finance and
acquire.”
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About the Report
The insights and commentary found in this report are derived from both a
survey instrument and personal interviews. The survey was completed by
279 executives from middle market companies with annual revenues between
$10 million and $1 billion. Industries represented include
industrial/manufacturing (19%); communications (16%); technology (15%);
office equipment (15%); logistics and trucking (12%); energy, mining and
construction (12%); and healthcare (11%).
CIT Capital Equipment Finance
CIT Capital Equipment Finance is a leading provider of equipment
financing solutions for middle market companies in a wide range of
industries. We have nearly a century of experience in developing
innovative financial products and services that are flexible, affordable
and tailored to our customers’ specific needs. cit.com/capitalequipment
About CIT
Founded in 1908, CIT (NYSE: CIT) is a bank holding company with more
than $33 billion in financing and leasing assets. A member of the
Fortune 500, it provides financing and leasing capital to its small
business and middle market clients and their customers across more than
30 industries. CIT maintains leadership positions in small
business and middle
market lending, factoring,
retail
finance, aerospace,
equipment
and rail
leasing, and global
vendor finance. CIT also operates CIT Bank (Member FDIC), BankOnCIT.com,
its primary bank subsidiary, which offers a suite of online savings
options designed to help customers achieve a range of financial goals. cit.com
Photos/Multimedia Gallery Available: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50361937〈en
