The State of Washington is the 10th largest state by dollar amount of equipment financed in the U.S., and finances $26.78 billion in capital equipment annually. As the 1st session of the 115th Congress begins, groups like the Equipment Leasing & Financing Association, and lending institutions like Orion First must be heard in Washington DC and promote the finance industry’s continued well-being and its vital role in fostering small business growth.
May 15th through May 18th David Schaefer (CEO) of Orion First, along with Zack Marsh (CFO), Joe Collins (SVP), and Quentin Cote (Product Manager) journeyed to Washington, DC to lobby for American small business and the lending institutions that support it.
While in the Capitol to discuss regulatory reform and explain the looming potential for adverse effects it poses on the American economy:
- Dave met with senior staff of the Senate Finance Committee, House Ways & Means Committee, Senate Banking Committee and the Consumer Financial Protection Bureau
- Joe met with Congressman Fred Upton (R-MI), staff of Senators Debbie Stabenow (D-MI) and Brian Schatz (D-HI), and staff of the office of Congresswoman Debbie Dingell (D-MI) and Congressman Mike Bishop (R-MI) and Dave Trott (R-MI)
- Zack and Quentin met with US Representative Derek Kilmer (D-WA), and key staff from the offices of US Representatives Adam Smith (D-WA), Rick Larsen (D-WA), and David Reichert (R-WA) as well as staff from the offices of US Senators Patty Murray (D-WA) and Maria Cantwell (D-WA)
On the docket for this session of Congress are two issues that have the potential to negatively impact the American small business lending industry and, by extension, small businesses across the country.
- Firstly, small business access to affordable credit will be threatened by Section 1071 of Title 10 of the Dodd-Frank Wall Street Reform and Consumer Protection Act – requiring financial institutions to inquire if the applicant is “woman-owned,” “minority-owned,” or a “small business.”
- This will negatively burden lending institutions by requiring the credit grantor to gather the information and keep it segregated from the underwriting process, thereby creating additional expenditures for staff, technology and firewalls inside their companies. These additional and unnecessary expenses must be passed on to borrowers or ultimately force both small and large lenders out of business and decrease access to affordable capital for small businesses. This is an example of government interference which adds costs with little to no value, unfairly burdening smaller lending institutions.
- Secondly, the current proposed tax reform would limit interest deductibility associated with financing of equipment acquisitions, to finance a lower corporate tax rate. With approximately 68% of all money invested in U.S. businesses coming from financing with loans, leases and lines of credit, this change could dramatically harm investment in American business and stunt economic growth. It is especially harmful to small and capital constrained companies as they have fewer options to raise capital through the equity markets as larger publicly traded corporations do. This one size fits all policy harms small businesses at a time when an effort should be made to support small business investment in equipment and job growth.
Orion First is committed to the overall health and prosperity of the small ticket equipment finance industry–and the small business lending marketplace as a whole. To promote the vitality of these industries Orion is a dedicated advocate for wise and informed legislation in Washington, DC. Without individuals and organizations looking out for the best interests of markets such as these, many American small business owners could face undue burdens. Our goal is to champion initiatives that are advantageous while fighting against the enactment of cumbersome legislation that could, ultimately have a detrimental effect on small businesses across our country.