During the third quarter of 2020, the United States economy rebounded, displaying a much swifter recovery than was predicted. However, when compared to pre-COVID levels, both business and consumer confidence remained much lower.

Across the United States, equipment financing enables all forms and sizes of businesses to acquire the equipment they need to operate and to grow. According to the Equipment Leasing and Finance Association (ELFA), prior to the pandemic, the United States equipment finance sector was valued at nearly $1 trillion. While the industry was impacted like others by COVID-19, it has shown great resilience. As of September 2020 YTD, cumulative new business volume was valued at US$73.6 billion, a decrease of only 5% when compared with the same period in 2019.

However, it is anticipated that the underlying dilemmas with the country's economy will bring difficulties to the industry this year (2021), particularly with regards to the impact of the second wave of the virus, pertaining to high unemployment and great financial pressure on small businesses across the United States. On a more positive note, decreased interest rates are expected to boost equipment finance activity in those sectors that have not been as severely affected by the virus. Furthermore, with the much awaited arrival of vaccines, and as business and consumer confidence normalizes, equipment finance and leasing companies may find themselves moving towards growth.

Equipment and software investment was stronger as compared to overall GDP growth last year (2020), as organizations invested in order to adjust to COVID-19. In quarter three last year, investment in this regard surged 46.9%. Indeed some segments, such as the medical equipment sector, witnessed immense growth as a consequence of COVID-19 across the world. The United States witnessed excellent growth in the third quarter of the previous year pertaining to medical equipment investment and this sector maintains itself as one of the few with double-digit yearly growth.

Other segments tell a mixed story. As the pandemic shut down travel globally, the decreased demand for jet fuel and gasoline led to a greatly impacted mining and oilfield machinery sector. However, with vaccination programs rolling out across the country, and traveller confidence returning, some rebound is predicted. In manufacturing, as new orders and deliveries of important capital goods increased to record levels as business in various sectors responded to increased demand, the segment recuperated in the last few months of the previous year. However, while production is comparatively close to pre-COVID-levels, manufacturing employment currently remains depressed.

In order to do its part in weathering the storm by keeping interest rates low to encourage and facilitate business activity, the Federal Reserve's benchmark rate was set between 0-0.25% and rates are anticipated to remain at similar levels this year.

Prior to the pandemic, equipment finance and leasing companies globally had either already digitally transformed or initiated their journey of transformation. The pandemic further augmented this. The global health crisis shut down the world when the first wave of the virus transpired. Digitalization played the most essential role in order to keep business activity running for all industries worldwide throughout its duration - either from a perspective of continuing to reach new or existing customers, or from an employee "work-from-home" angle.

Enterprises in the equipment finance and leasing space with more superior enterprise technology and digital solutions have remained in a much more dominant position than those companies that still reply on legacy systems. A number of important technologies have gained traction globally in the equipment finance and leasing domain, particularly, but not limited to, Artificial Intelligence and Machine Learning, Virtual Reality, Blockchain and Big Data. Whilst the importance of these technologies was understood already before the pandemic - this has only been increased during this period.

Artificial Intelligence is utilized by equipment finance and leasing companies for superior user interfaces, for automated and seamless credit scoring and processing, and in order to enable better assisted interactions with customers. Virtual Reality enables an extraordinary experience to visualize and customize various forms of equipment. Blockchain enables swift and accurate transactions while substantially decreasing risk, while Big Data enables equipment finance and leasing businesses to better understand market trends, gain important customer insights and build operational agility.

Integrating legacy systems with premier, next-gen solutions can be extremely problematic for equipment finance and leasing companies looking to improve their operations. This is primarily because newer digital technologies, including Artificial Intelligence and Machine Learning, alongside Cloud/SaaS solutions are not compatible with old legacy systems. It is therefore essential for financial organizations in the equipment finance and leasing domain to develop new business and operating models in order to futureproof their business.

Whilst some lessors have been able to take advantage of their technology strategies during the crisis, all is not lost for those who are still in the process of change or even starting out on their change journeys. In order to survive in today's dynamic and ever-changing environment (regardless of crisi or not), it is imperative for equipment finance and leasing companies to take opportunity of the latest adaptive and proven platforms that streamline their processes and substantially decrease their costs. As vaccines continue to roll-out across the country, business and consumer confidence are sure to rise and business activity will return to normality and further increase. Equipment finance and leasing companies need to acquire a platform that supports their growth in terms of business volume and transactions.

NETSOL's scalable solutions cater to equipment finance and leasing companies across the globe with ever growing and diverse business requirements worldwide. NFS Ascent and NFS Digital empower finance and leasing companies to effectively manage their complex multi-site and multi-currency operations and enable them to thrive in hyper competitive markets globally. Since the onset of the pandemic, NETSOL has remotely delivered seven projects in seven countries, including both on-prem and cloud deployments.

Monitor Daily has recently selected NETSOL Technologies in its inaugural special feature of "Most Innovative Companies in the Equipment Finance Ecosystem" in the Sustaining Category. To view the digital version of Monitor Daily's latest edition where NETSOL has been featured as the Most Innovative Company in EF Ecosystem, please click on the following link:
https://www.magazine.monitordaily.com/netsol-technologies.

If you are interested in discovering out how NETSOL Technologies can enable cost efficiency, increase operational effectiveness and transparency for your equipment finance and leasing business, get in touch with us here.