FinanceComplianceNovember 02, 2020

Equipment leasing industry confidence rises

The November 2020 Monthly Confidence Index from Equipment Leasing & Finance Foundation (EFFA) is 56.1, up from 55.0 in October.

While confidence in the equipment and finance industry is up from last month – and up from November 2019’s 54.9 level – there appears to be a ‘wait and see’ attitude for the next four months: 

  • Executives believe business conditions are more likely to stay the same than improve (53.9% versus 26.9%)
  • Respondents also believe demand for leases and loans to fund capital expenditures are more likely to stay the same than increase (69.2% versus 19.2%)
  • Access to capital for equipment acquisitions is also expected to stay the same (76.9% versus 23.1% of executives who predict more access)

Looking further out, there’s optimism that the U.S. economy is also expected to improve, likely because the political climate will settle. More than a third of respondents (34.6%) feel the economy will get ‘better’ over the next six months, an increase from 25.9% in October. “Following the distraction of the election, business will get re-focused on winning with whatever the new rules of engagement are and will continue to find ways to win,” said David Normandin, CLFP, President and CEO, Wintrust Specialty Finance

Business development spending also looks promising, with 26.9% of respondents reporting their companies will increase spending over the next six months, versus 22.2% last month.

With political, economic and public health uncertainty, equipment leasing and finance leaders have the opportunity to leverage eContracting technology to improve the eLeasing experience, while also improving the post-closing process and accelerating access to funding from the warehouse lenders or from the secondary markets.

eLeasing offers lessors many advantages compared with paper-based loans:

  • Less time to completion, reducing cost and time throughout
  • Verifiable legal compliance
  • Acceptance in secondary markets, for securitization, syndication and as debt collateral
  • Implementation with less effort and at a lower cost

Well before the pandemic lessees expected to conduct business digitally, and the demand has only accelerated since March. Equipment leasing companies who do not adopt fully digital processes risk being left behind.

Due to the gains in efficiency and speed to capital, there is a growing digital ecosystem of originators, funders and investors in the equipment lease and finance space. Whether you want to add functionality to an existing system, or implement a fully end-to-end eContracting solution, eOriginal can help.

A Trusted Digital Ecosystem

eContracting solutions provide greater benefits for equipment lease and finance companies, and enable an improved borrower user experience, enhance operational efficiencies and eliminate paper-related transaction costs. Technology enables many efficiencies: errors can be identified before closing, the process is faster and more compliant from the close to the secondary market.

An advanced digital lending solution like eOriginal’s eAsset Management can be used to fight fraud in digital leasing.  On the eSignature side, identity verification can be executed via email, text or phone, or through third-party services. Furthermore, after the eSignature, technology can be used to create an authenticated digital original document that cannot be altered, which is an example of where the digital process offers more security than existing paper-based methods.

Electronic signatures are a core component of digital loans; however, eSignature solutions are only responsible for creating the loan. To guarantee legal authenticity, lenders must use an electronic vault, or eVault, to establish a Digital Original – an authoritative copy of a digital loan and a tamper-proof, auditable chain of custody and control.

This eVault accounts for the storage and assignment of the digital loan, enabling it to be sold on the secondary market. eOriginal, the trusted leader in digital lending technology ensures Digital Asset Certainty to protect the security interest of lenders, investors, custodians and other involved parties when issuing, managing, and monetizing digital loans.

Best practices include sending lease documents to the borrower in one digital package, which accelerates the origination process by preventing errors and omissions. Digital loan packages become an asset trusted by funders and investors and quickly moved to the secondary market.

Urgency Spurs Digital Transition

As equipment lease and finance business practices continue to evolve, the need for a digital solution that supports eLeasing has never been more essential. Learn how you can adopt a fully digital workflow with 1:1 meeting.

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