Financing outlook good for MCI customers

Everyone likes a little good news. With the media talking credit crunches and foreclosures, it's no wonder operators have questions about the availability of financing to the coach industry. It turns out the picture for MCI customers looking to finance or lease equipment is as bright as ever, according to Mike Denny, vice president of MCI Financial Services.

“We have not seen our funding sources tighten up like in the housing market or some other commercial industries," says Denny. "If a company has sound fundamentals, we will be able to get them financed. In fact, with the rates so low and bonus depreciation available, it's a great time to acquire coaches."

Denny explains that the motor coach industry faced its largest financing challenge in the early 2000s, when the credit market learned from its mistakes of the late 90s, bringing credit terms more in line with customers credit ability. Today, MCI uses a variety of funding sources, and each has its own set of criteria. As with any loan, companies that are established, with solid credit history, tend to be offered the best interest rates and the lowest money down. Denny says many factors go into determining an operator's credit profile, including their financial picture, time in business and payment history on their current coaches.

"In the end, it's just good business to satisfy the needs of both funding sources and customers, and ultimately, such synergy is good for the industry," says Denny. "We don't look at it as a one-off deal. We don't want to put people in the business who shouldn't be in the business. And we want to provide our funding sources with a book of business that performs. We want to make sure our sources are happy and will remain long-term players in the industry. And we want to make sure our customers have the financing they need to succeed."

Again, Denny emphasizes that there's currently a historic combination of low interest rates and government incentives, along with an economy that may favor ridership growth. And that bodes well for those operators that are ready to grow.

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