Canadian Equipment Finance magazine NovDec 2014
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Transcript of Canadian Equipment Finance magazine NovDec 2014
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
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EQUIPMENT FINANCING SPECIALISTSThierry MartinSenior Manager
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Jrme ThibeaultSenior Manager
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canadianequipmentfinance.com | november/december 2014 | cAnAdIAn eQUIPmenT FInAnce3
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
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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
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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
Relying on the indoor Management Rule and Grant of Security interest: A Common ProblemA case study involving Accra Wood Productions Ltd. 14
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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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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