Southeastern Wisconsin business owners have regained some confidence in buying new equipment, according to U.S. Bank.
Equipment financing was up 62 percent over 2012 through the first eight months of the year, said Mike Ward, Milwaukee small business manager for U.S. Bank.
Automotive manufacturing, medical/dental and restaurant renovations have been particularly strong sectors, he said.
There are two drivers of the significant increase in equipment financing demand among small businesses, Ward said. Some business owners held back on equipment investments coming out of the recession and are now confident in making purchases. And others need to replace old equipment and have no other choice.
Grube’s Towing in Mequon recently secured a U.S. Bank equipment loan for about 90 percent of its new $75,000 tow truck.
“We picked up some more work, we’re getting a little busier, and it was time to add some more staff and some additional equipment to try to stay ahead,” said Tim Grube, president.
Grube was waiting to make the investment until after he had evaluated whether a bubble of activity they saw was going to persist.
Last year, Grube’s was getting 50 to 70 calls per day, and now it’s seeing 70 to 100 calls each day. That could be because people who were unemployed are now out driving to jobs, Grube said.
The business now has 20 trucks and about 25 employees.
Ward also expects changes in new equipment tax credits that will likely take place in 2014 could further increase the demand over the remainder of the year.
“Seasonally, we normally do a big percentage of our equipment financing in the fourth quarter—that’s why this is so exciting,” he said.
The jump in equipment activity may also signal employers are going to be hiring, expanding and purchasing real estate soon, Ward said.
“It really feels like it’s a leading indicator for future growth,” he said.
