How Do You Tell the Story of an Industry?: Tracing Equipment Finance’s Past, Present and Future
In equipment finance, you must turn to its people because as much as the sector has been built on dollars and cents, not to mention iron and steel, the people who form the community within the equipment finance space are what makes it so unique and enduring.
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This almost too-good-to-be-true setup came to a halt in 1986 with the passage of the Tax Reform Act of 1986, which was one of several tax law changes the industry navigated during the 1970s and 1980s. However, the 1986 legislation eliminated the tax credit that made leveraged leases so popular and served as one of the most critical turning points in the history of the equipment finance industry.
“I can remember people when I was coming up for partner at my law firm saying, ‘What happens if Congress gets rid of the investment tax credit?’” Stephen Whelan, senior counsel at Blank Rome, says. “Less than 10 years later, Congress did get rid of the investment tax credit, and guess what? The world did not come to an end. The professionals in the equipment leasing and finance arena devised new structures that weren’t dependent on upon a 10% or 7% investment tax credit.”
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"How Do You Tell the Story of an Industry?: Tracing Equipment Finance’s Past, Present and Future," by Phil Neuffer was published in Monitor Daily on June 22, 2023.