Month: April 2017

The equipment leasing industry has experienced remarkable growth in recent years, with over $1 trillion dollars of equipment being leased annually in the U.S. As lease portfolios expand and become more complex, maintaining accurate data and records has become essential for equipment leasing companies. Data tracking not only ensures compliance with income, sales, and property tax regulations but also enables businesses to make informed decisions that drive success.

In this blog post, we’ll explore the importance of data tracking for equipment leasing companies and how to develop a sound data management system. By answering critical questions about asset tracking, documenting lease data, and utilizing data analytics, businesses can gain valuable insights and improve operational efficiency.

Understanding Data Tracking for Equipment Leasing Companies
As the equipment leasing industry continues to flourish, the significance of data tracking becomes apparent. Proper asset tracking ensures accurate reporting for income taxes, sales taxes, and property taxes, making it an essential component of a successful leasing business. But what level of detail is necessary for data tracking?

Companies may differ in their approach, with some tracking every asset individually and others opting for a more consolidated approach. To determine the best policy, leasing companies should consider factors such as asset location, asset types, and the type of lease involved. Tracking assets separately based on these criteria provides valuable insights for analyzing performance and tax treatment.

Documenting Lease Asset Data
Creating a standardized form or checklist for documenting lease asset data is crucial for maintaining accuracy and consistency. This form should include all relevant data to be input and tracked during the lease booking process. A fillable PDF or Word document can serve as a simple yet effective tool for this purpose.

It is advisable to have an independent review and approval process before finalizing the lease data. This additional step helps prevent potential errors and ensures that all necessary information is correctly captured. Errors at the initial booking stage can lead to significant complications later on, making the review process a valuable safeguard.

Moreover, companies may choose to use customer relationship management (CRM) software to record and manage this information more efficiently. Larger businesses that can invest in CRM systems can benefit from a streamlined approach to data tracking.

Data as an Operational Improvement Tool
Beyond asset tracking data, equipment leasing companies can leverage additional data points to improve their operational decision-making. Information related to leases, such as sales representatives, sales offices, vendors, clients, and industries, can offer valuable insights when analyzed effectively.

By separately tracking this information and analyzing it, businesses can assess the performance of individual sales representatives and identify high-yielding industries. Thoughtful planning and analysis based on this data can lead to valuable improvements in various aspects of the company’s operations.

Utilizing Collected Data
To harness the full potential of the data collected, equipment leasing companies have several options. Many lease portfolio management systems come equipped with built-in data analysis functionality, simplifying the process of reporting and analyzing data.

Companies may also combine CRM software with lease portfolio software to enhance data analysis capabilities. In some cases, businesses may even invest in custom data analytics software tailored to their specific needs.

However, even for smaller companies, tracking and analyzing data in Excel can provide valuable insights. Whether through specialized software or simple spreadsheets, data analysis can contribute significantly to an equipment leasing company’s growth and success.

In conclusion, data tracking is a fundamental aspect of running a successful equipment leasing company. By understanding the level of detail needed for asset tracking, documenting lease data meticulously, and utilizing collected data for analysis, businesses can optimize their performance, comply with tax regulations, and make informed decisions.

Embracing data-driven strategies empowers equipment leasing companies to stay ahead of the competition, improve operational efficiency, and achieve sustainable growth in this thriving industry. As technology continues to evolve, harnessing the power of data will become even more critical for companies aiming to succeed in the dynamic world of equipment leasing.

As we step into 2017, the equipment finance industry is experiencing a surge in confidence, bringing forth new challenges and exciting opportunities for funding sources. With a record-breaking Equipment Leasing and Finance Foundation’s Monthly Confidence Index, optimism is at an all-time high. Experts from leading funding organizations, Financial Pacific Leasing, Ascentium Capital, and MB Financial Bank, discuss the landscape of the industry, the impact of the new presidential administration, credit quality, liquidity, and strategies to remain competitive.

A Confident Start to 2017
The equipment finance industry is off to a confident start in 2017, with the Equipment Leasing and Finance Foundation’s Monthly Confidence Index reaching an all-time high of 73.4. Although the index slightly retreated to 72.2 in February, it remains substantially higher compared to the previous year. This surge in optimism has led to an increase in new business volume, setting a positive tone for the industry’s growth.

Funding Sources and Opportunities
Funding sources in the equipment finance industry are embracing the newfound confidence. Brian Griffin, the president of Lease Banking for MB Financial Bank, remains optimistic, expecting transaction volumes to pick up throughout the year. Ascentium Capital, now backed by private equity firm Warburg Pincus, sees growth fueled by existing third-party originators. Financial Pacific Leasing, an Umpqua Bank company, is experiencing a rise in business and plans for continued growth in its core business.

Ensuring Liquidity and Credit Quality
Despite concerns about a liquidity crunch, the funding sources are well-positioned, with no immediate signs of liquidity issues. Planning and diversification remain essential to safeguard against unforeseen challenges. On the credit side, panelists anticipate minor fluctuations in delinquencies, with Griffin and Menzel expecting a decrease in 2017.

Remaining Competitive
In a changing landscape, staying competitive is crucial for funding sources. Key strategies include understanding customer needs, adding real value, and fostering strong funding relationships. Differentiation goes beyond offering the lowest price; reliable responsiveness and flexibility play a significant role. Fisher emphasizes the importance of maintaining strong credit profiles and delivering superior customer service.

The Impact of the New Administration
The new presidential administration promises a pro-small business sentiment and potential regulatory rollbacks. The panelists believe that decreased regulations may lead to increased efficiency in the industry. However, Griffin and Menzel caution that certain regulations are likely here to stay and recommend conducting business in a fair and equitable manner.

Challenges Ahead
The industry is likely to face challenges with the anticipated rise in interest rates. Funding sources will need to adapt to this new element by sharpening their focus on pricing. Additionally, the industry needs to address a more knowledgeable consumer base that demands transparency and tailored solutions.

As confidence in the equipment finance industry reaches unprecedented levels, funding sources must capitalize on the opportunities while navigating the challenges. Remaining competitive, maintaining liquidity, and focusing on credit quality will be critical. With the new presidential administration signaling a pro-business approach, regulatory changes and increased efficiency could reshape the industry’s landscape. Adapting to new market dynamics and evolving customer needs will be crucial to thriving in this optimistic and promising environment.

In an ever-evolving world, the equipment finance industry faces the challenges of adapting to rapid changes, making it crucial for companies to adopt a forward-thinking approach. According to a recent report from the Equipment Leasing & Finance Foundation (ELFF), utilizing “day-after-tomorrow” thinking is essential to thrive in this dynamic landscape. The report, based on insights from 22 industry executives who convened in Washington, D.C., delves into the crucial factors that equipment leasing and finance firms must consider as they chart their path to future growth.

Understanding the Industry’s Evolution

The 2017 Industry Future Council (IFC) report offers valuable insights into key areas that are currently impacting the equipment finance sector. By analyzing managed solutions, risk transference, regulatory restrictions, capital trends, and the evolution of financial technology (fintech), the report sheds light on the transformative trends that demand attention.

Managed Solutions for Future Growth

The first area of focus in the IFC report revolves around managed solutions. As the industry grows increasingly complex, companies should consider innovative and comprehensive solutions to cater to the evolving needs of their clients. Providing end-to-end services, rather than just simple financing options, can elevate customer satisfaction and loyalty, thereby strengthening the business’s position in the market.

Mitigating Risk through Forward-Thinking Strategies

Risk transference is a critical aspect that equipment finance companies need to address in their “day-after-tomorrow” thinking. By actively identifying potential risks and developing strategies to mitigate them, businesses can safeguard themselves against uncertain market conditions and maintain stability during times of economic turbulence.

Navigating Regulatory Restrictions

Regulatory changes can significantly impact the equipment finance industry. Being aware of evolving regulations and ensuring compliance will be essential for businesses to remain competitive and avoid potential legal repercussions. Staying informed and collaborating with regulatory experts can help navigate the changing landscape more effectively.

Understanding Capital Trends

Capital trends have a profound effect on the industry’s growth and expansion. Monitoring and analyzing these trends will allow companies to make informed decisions about capital allocation, thereby optimizing their resources and maximizing returns on investments.

Harnessing the Power of Fintech

The IFC report recognizes fintech as a transformative force that continues to shape the equipment finance industry. Embracing technological innovations and integrating them into existing processes can streamline operations, enhance customer experiences, and open up new revenue streams for companies.

Embracing Exponential Technologies

The report delves into the characteristics of exponential technologies and identifies those with direct or potential applications in the commercial finance sector. Embracing these technologies can significantly enhance operational efficiency and facilitate greater connectivity with clients, driving overall growth.

Applications of Exponential Technologies

1. Artificial Intelligence (AI): AI-powered algorithms can revolutionize credit risk assessment, allowing companies to make faster and more accurate lending decisions. Moreover, AI chatbots can enhance customer support, providing instant assistance to clients and improving overall service levels.
2. Internet of Things (IoT): IoT devices can enable real-time asset monitoring, leading to predictive maintenance and cost-saving opportunities. By offering value-added services, equipment finance companies can enhance client relationships and create additional revenue streams.
3. Blockchain Technology: Blockchain’s immutable and transparent nature can enhance the security and efficiency of financial transactions. Implementing blockchain in lease agreements and payment processes can simplify operations while reducing fraud risks.

In the rapidly changing landscape of the equipment finance industry, embracing “day-after-tomorrow” thinking is essential for companies striving to succeed. The insights from the 2017 IFC report highlight the importance of managed solutions, risk mitigation strategies, regulatory compliance, capital trend analysis, and the integration of exponential technologies.

By adopting these forward-thinking approaches and staying ahead of industry developments, equipment finance companies can position themselves as leaders in the market, delivering enhanced value to clients, and paving the way for future growth and success. Co-sponsored by PayNet and IDS, the IFC report serves as a valuable resource and planning tool for industry executives seeking to navigate the challenges and opportunities of tomorrow.