Canadian Equipment Finance magazine NovDec 2014

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Transcript of Canadian Equipment Finance magazine NovDec 2014

  • PM40050803

    Nov/Dec 2014 volume 2 issue 6 | www.caNaDiaNequipmeNtfiNaNce.com

    Cleared for Takeoff: The rise of online lease financing

    Business: Why do dogs bark but fish dont?

    Observations: Should it stay or should it go?

    THE LEGAL REPORT:The disconnection notice; The indoor management rule; legalities within the finance industry

  • To contact Business Services:

    EXPERTISE, FLEXIBILITY AND SPEEDWe understand that cutt ing-edge equipment is key to your organizations productivity and success. Let our nancing team put their specialized expertise to work for you to allow you to acquire the equipment you need more readily and rapidly.

    EQUIPMENT FINANCING SPECIALISTSThierry MartinSenior Manager

    Jean-Pascal GagnonAccount Manager

    Franois HoudeSenior Manager

    Jrme ThibeaultSenior Manager

    Thierry LangevinVice-President

    Sbastien LemaySenior Manager

    Louis Dupuis Senior Manager

    88219_Pub_BL_Equipement_Page.indd 1 2014-08-04 12:35 AM

  • canadianequipmentfinance.com | november/december 2014 | cAnAdIAn eQUIPmenT FInAnce3

    contents

    November/December 2014Volume 2 Number 6

    Publisher and Editor-in-ChiefSteve Lloydsteve@canadianequipmentfinance.com

    EditorKaren Tremlkaren@canadianequipmentfinance.comCreative Direction / ProductionJennifer ONeilljennifer@canadianequipmentfinance.comPhotographerGary TannyanAdvertising SalesMark Henrymark@canadianequipmentfinance.com

    For subscription, circulation and change of address information, contact subscriptions@canadianequipmentfinance.com

    Publications Mail Agreement No. 40050803Return undeliverable Canadian addresses to:

    Circulation Department302-137 Main Street NorthMarkham ON L3P 1Y2t: 905.201.6600 f: 905.201.6601info@canadianequipmentfinance.comwww.canadianequipmentfinance.com

    Subscriptions available for $40.00 year or $60.00 two years. 2014 Lloydmedia Inc. All rights reserved. The contents of this publication may not be reproduced by any means, in whole or in part, without the prior written consent of the publisher. Printed in Canada. Reprint permission requests to use materials published in Canadian Equipment Finance should be directed to the publisher.

    ELFA REPORT:What is the current state of technology in the equipment finance industry. Find out in the ELFA Business Technology Performance Index. And in the survey of economic activity, equipment finance companies showed an increase in overall business volume. 4

    Ontario Interactive Digital Media Tax Credit

    Made possible with the support of the Ontario Media Development Corporation

    FEATURES

    NEWS 7

    YOuR BuSiNESSWhy do dogs bark but fish dont? Removing the [ ] from your [business] 16

    EVENTS Where to go. What to see. 24

    OBSERVATiONS Should it stay or should it go?The challenges of derelict equipment 26

    THE LEGAL REPORTDisconnection NoticeSome legal aspects of remote disabling technologies 11

    Cleared for TakeoffThe rise of online lease financing in Canada 20

    State of the Equipment Finance industry Report23

    Also Publishers of

    Payments Businesswww.paymentsbusiness.ca

    canadian treasurerwww.canadiantreasurer.com

    contact managementwww.contactmanagement.ca

    direct marketingwww.dmn.ca

    Financial oPerationswww.financialoperations.ca

    Relying on the indoor Management Rule and Grant of Security interest: A Common ProblemA case study involving Accra Wood Productions Ltd. 14

  • cAnAdIAn eQUIPmenT FInAnce | november/december 2014 | canadianequipmentfinance.com4

    eFla rePort

    ELFA Business Technology Performance Index examines state of technology

    Survey of Economic Activity: Monthly Leasing and Finance Index

    What is the current state of technology in the equipment finance industry? The newly released Business Technology Performance Index examines that question. Conducted for ELFA by Capgemini, the report provides insight into the technology trends and forward-looking initiatives that equipment finance companies are using to drive their firms into new markets and opportunities.

    The equipment finance industry is shifting from traditional to digital channels, including online, mobile and more recently social media. In order to create and deliver the anticipated customer experience, operational efficiency and new business model benefits, companies will need to develop more innovative and engaging service offerings and fully leverage the rapidly evolving digital technologies.

    The report, based on industry research and a survey of industry members, is available on the ELFA website at http://www.elfaonline.org/Research/?fa=Studies#BTPI.

    The Equipment Leasing and Finance Associations (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity from 25 companies representing a cross section of the $903 billion equipment finance sector, showed their overall new business volume for October was $8.3 billion, up nine per cent from new business volume in October 2013. Month over month, new business volume was down 12 per cent from September. Year to date, cumulative new business volume increased eight per cent compared to 2013.

    Receivables over 30 days increased from the previous month to 1.2 per cent, and were up from 0.9 per cent in the same period in 2013. Charge-offs were unchanged for the seventh consecutive month at an all-time low of 0.2 per cent.

    Credit approvals totaled 78.3 per cent in October, a decrease from 79.7 per cent the previous month. Total headcount for

    equipment finance companies was up 0.7 per cent year over year.

    Separately, the Equipment Leasing & Finance Foundations Monthly Confidence Index (MCI-EFI) for November is 64.2, an increase from the October index of 60.4 and the highest level since May.

    ELFA President and CEO William G. Sutton, CAE, says: ELFA members report strong growth in new business volume, albeit tempered by continued margin compression in many sectors. The U.S. economy continues to expand at a modest rate, providing a welcome stimulus for investment in business equipment. Portfolios are performing relatively well, although delinquencies are showing some slight volatility. Most economic indicators lower fuel prices, reduced unemployment and a robust equity and bond market all point to a strong fourth quarter,

    absent some unforeseen development.Michael Doyle, President, BTMU

    Capital Leasing and Finance, Inc., says, The solid growth in October year-on-year new business volume is evidence of a fairly robust capital expenditure environment. We see this trend continuing into a strong fourth quarter, with the possible exception of those markets related directly to petroleum exploration and development. These markets will continue to be negatively affected if low oil prices persist. Stronger sectors include those involving transportation assets and information technology equipment and software. Generally, we are seeing consistent credit discipline, but this has not yet translated into a more stable pricing environment. We expect that margin compression will continue to be an issue in the fourth quarter as lessors look to book volume to meet their 2014 budgets.

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  • cAnAdIAn eQUIPmenT FInAnce | november/december 2014 | canadianequipmentfinance.com6

    eFla rePort

    About the ELFA MLFI-25

    About the Foundation

    November 2014 Survey Results:The overall MCI-EFI is 64.2, an increase from the October index of 60.4.

    The MLFI-25 is the only index that reflects capex, or the volume of commercial equipment financed in the U.S. The MLFI-25 is released globally at 8 a.m. Eastern time from Washington, D.C., each month on the day before the U.S. Department of Commerce releases the durable goods report. The MLFI-25 is a financial indicator that complements the durable goods report and other economic indexes, including the Institute for Supply Management Index, which reports economic activity in the manufacturing sector. Together with the MLFI-25 these reports provide a complete view of the status of productive assets in the U.S. economy: equipment produced, acquired and financed.

    Equipment Leasing and Finance Industry Confidence Index sees six-month high The Equipment Leasing & Finance Foundation released its November 2014 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). Designed to collect leadership data, the index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $903 billion equipment finance sector. Overall, confidence in the equipment finance market is 64.2, an increase from the Oc