National City Bank has seen enormous growth in its equipment leasing business, much of it with the acquisition of Provident Bank in 2004.
“Their leasing and our leasing company both had assets of about $1.5 billion,” says Chris Karwoski, senior vice president at National City. “They run their business on very vertical, industry-specific markets. National City Corp., pre-Provident Bank, was a generalist.
“Provident Bank brought us industry specific expertise in health care, in data processing, in corporate aircraft and having the sales force throughout the U.S.”
Equipment leases come in a variety of sizes.
A recent National City Bank survey looked at the trends in equipment financing and found that 62 percent of middle market companies, in a seven-state survey that included Ohio, have leased or bought equipment valued at $100,000 or more in the past 12 months. Of those, 33 percent are leasing the equipment.
According to the survey, the top reason for leasing is cash conversion (79 percent). Other reasons given for leasing include tax management, 38 percent; improve financials, 47 percent; short-term financing, 25 percent; and maintain pace with technology, 39 percent.
There are a number of options for those looking to lease equipment.
“We work very proactively with our relationship managers,” Karwoski says. “Every time a bank client and a bank prospect — where they have interest in financing (capital expenditures) — we’ll look at various solutions on the leasing front, whether it’s conditional sale type of lease, operating lease and/or a tax exempt lease. We’ll give clients various options.”
