Arvest Equipment Finance Fares Well In Thriving Industry

Arvest Equipment Finance, a division of Arvest Bank, is one of only a few financial institutions serving Northwest Arkansas that specializes in the burgeoning industry of finance and leasing for farm and office equipment.

And for AEF, that’s worked out well. 

The Fort-Smith-based company made last year’s top 100 equipment finance firms, is growing annually and has more than doubled the value of its loans and leases in three years.

AEF ended 2013 with $132.3 million in loans and leases, up from $54.9 million at the end of 2009, according to the company’s financials.

The loan and lease amount also showed an 8.1 percent increase from 2012.

The AEF was started “from scratch,” meaning there were no existing portfolios from which associates could pull, in 2007, said president and CEO Kyle Gilliam. “A lot of people might think because of the timing it was a catastrophic move on the bank’s part, but our product line can thrive, even in a challenging economy.”

During tough financial times, AEF’s service allows business owners to retain their working capital. Rather than spending it on equipment, they can deploy that cash elsewhere, Gilliam said. 

And now that the economy is recovering, the business is growing even more.

In 2013, AEF was ranked by leading equipment leasing and finance industry publication MonitorDaily as one of the 100 largest equipment finance and leasing companies, based on net assets and new business volume.

AEF took the 99th spot, based on its performance in 2012.

The Monitor 100 list based on 2013 assets will not be available until June. Gilliam said it is unknown if AEF will make the cut. However, it reported a 10 million dollar hike in assets for the year.

This jump could partly be attributed to the opening of a new office in Kansas City, Mo., during the fourth quarter of 2012.

AEF now employs 10 full-time staff members and plans to relocate one open position, for which the job listing was posted March 27, to an office in Oklahoma City.

Like Arvest Bank of Fayetteville, AEF serves Arkansas, Missouri, Oklahoma and Kansas, with a large amount of its business coming from Northwest Arkansas, Gilliam said.

The loan and leasing company’s success is partly due to its close working relationship with Arvest commercial lenders,” he added. “The culture [at Arvest] is phenomenal. We are always looking for cross-sow opportunities.”

Gilliam also attributes AEF’s prosperity to the company’s willingness to “get creative” with payment structures. This includes skip-payment plans, 100 percent financing, and systems where customers can make lower payments in the beginning to allow them time to create a revenue stream. “We are nimble in our approach.”

While these factors might have contributed, a steady, overall market economy improvement has boosted the equipment financing and leasing industry as a whole.

The current tax environment is conducive to short-term loans, Gilliam said. Also, there are small pockets of commercial expansion — and, as a result, equipment financing and leasing — going on throughout the country, and a lot of business owners are making equipment purchases, after pushing them back for years.

In many cases, advances in technology have increased the amount of equipment to which businesses must have access in order to run their companies.

 Each year American businesses, nonprofits and government agencies invest more than $1.5 trillion in capital goods and software (excluding real estate), according to the Equipment Leasing and Financing Association.

An increasing number, about 57 percent, of businesses are turning to leasing and financing for equipment, according to the ELFA.

It is now an $827 billion business, with about 600 brokers throughout the U.S.

And experts say it’s only going to get bigger. “All of the journals predict lots of expansion in 2014,” Gilliam said. “I’m not one to say it’s all going to be perfect, but the future remains very bright.”