Compared to last month’s upheaval
in the equipment finance sector, things appear to have settled
down, at least for the time being.
For months, Leasing Life
has been covering stories of lessors culling their broker business,
but last month there was not even a rumour of one having taken
place. Let’s hope the worst has already happened.
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Certainly there are two schools
of thought as to whether the stopping of broker lines has been a
good idea. One is that they are knee-jerk reactions to the
downturn, and that when one lessor cut its broker lines others
followed suit in follow-the-leader fashion.
Indeed, Derren Sanders, the
outgoing MD of HSBC Equipment Finance, refers this month to the
need for lenders to act responsibly when “dealing with the problems
faced by our customers”.
The other school of thought is
that brokers’ deals are more likely to go bad than ones sourced
direct from leasing companies.
Brokers themselves admit there is
some truth in this. Therefore axing brokers at a time when lessors
are trying to expunge bad debt altogether would seem to be a
sensible decision.
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By GlobalDataAnother factor erring against the
use of brokers is an increased emphasis on vendor finance, as
companies rely more on leasing as their capital budgets dry up.
To reflect this development, we
feature a series of profiles and news of financing agreements
between vendors and funders.
We hope this will be useful to
you when sourcing new business.
These VF profiles form part of a
new section called Channels, which covers the business of
resellers, captives, branches, brokers and salesforces; the whole
distribution process of funding.
Our lead story for that section
concerns a commercial vehicle manufacturer specialising in green
vehicles.
It has funding agreements for
batteries on its electric cars with ING Lease – clearly a leasing
company not afraid to take risk on the green revolution.
We also tackle the green issue
this month with another article on renewables. It makes
clear the sad reality that the UK is well behind most of the rest
of Europe in terms of encouraging manufacturers – and lessors – to
support the green revolution. This is best reflected by the failure
in the past by some organisations to drum up support for the
financing of solar panels in residential homes.
Again, lethargy on the part of
the UK government made such deals uneconomical for leasing
companies.
