Equipment Leasing
ComplianceFinanceJune 30, 2020

Equipment leasing: Industry confidence rises in August

The August 2020 Monthly Confidence Index from Equipment Leasing & Finance Foundation (EFFA) is 48.4, up from 45.3 in July.

Three-quarters (75.8%) of respondents said they expected business conditions to stay the same or improve over the next four months, and nearly 14 percent said they planned to hire during the same period. The number of respondents reporting an increase in business development efforts was also up from July, moving from 21 to 31 percent.

To take advantage of this cautious optimism in the face of economic uncertainty and a pandemic, 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.

Compared with a paper-based loan, eLeasing offers lessors:

  • 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

Even before the pandemic, lessees expected to conduct business digitally, and the demand has accelerated since March. Equipment leasing companies who do not adopt fully digital processes may be 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.

Digital Benefits: a Trusted Ecosystem

A digital eContracting solution provides greater benefits for firms in the equipment lease and finance space, and enables an improved borrower user experience, enhances operational efficiencies and eliminates paper-related transaction costs. Thanks to technology, errors can be identified before closing and the entire process is faster, more compliant from pre-loan to signature to transfer into the secondary markets.

An advanced digital lending solution can also be used to fight fraud on many levels when it comes to digital leasing in the equipment finance space. 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. From there, loan packages become an asset, that can be trusted by funders and investors, and quickly moved to the secondary market to access capital.

The Time is Now: 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.

Here are five considerations for equipment finance companies:

  • Know the law and compliance requirements
  • Require the highest level of security in your document ecosystem
  • Understand electronic chattel paper
  • Understand and expand your digital ecosystem for lenders and investors
  • Implement best practices

If you would like to learn more about eLeasing and how you can adopt a fully digital workflow, contact us for a meeting.

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