LPM Outsourcing is seeing
a flood of business from lessors in trouble during these difficult
Having the right back office is
important to maintaining cashflows. Without this a lessor can make
huge losses – both in the good times, when a lessor is writing lots
of new business, and in the bad, when it is forced to partially or
totally divest itself of its leasing activities.
LPM Outsourcing, part of the Five
Arrows Group, specialises in helping the back offices of troubled
leasing companies – whether they face insolvency, or are simply
wishing to divest themselves of their non-core activities.
The UK-based company helps leasing
companies to run-out their portfolios, and also works with
administrators to maximise cash flows.
At present LPM is making most of
its revenues from helping companies that are divesting their
“Some foreign-owned banks are
closing their operations as a result of the recession,” said LPM
managing director Philip Davies.
“We had a few enquiries, and
recently won a contract with a Japanese company which wasn’t making
a return and has decided to close in the UK.”
He added that LPM is in talks with
a couple of other major finance companies which have decided to run
out their non-strategic finance portfolios.
“They are looking at their options,
and because they can’t sell their portfolios, the run-out solution
is being considered seriously enough,” Davies continued.
The hard part, however, is handling
leasing companies that are in truly dire straits.
“For that, you need soft skills,
because you have to re-educate the customers when they try to avoid
payments, reminding them that they have an obligation to pay,” said
Having the right technology to
manage these process is also important – and particular attention
needs to be placed in the migration process.
LPM does not use a single
integrated system – rather it has one core platform which is common
to all portfolios, and a series of specialised applications around
this, which aren’t related to that platform, but interface with
“We have chosen not to go with a
big integrated system because it is better to provide specialised
service for different types of clients,” said Davies.
“Each client wants different
things, they want operating leases on vehicles on the Nordics, IT
leasing in Spain and so on, and having different applications suits
LPM’s specialised applications
include an in house-developed collections module, as well as
external arrears and invoice modules.
Although for Davies most of the
well-known systems on the market are satisfactory for run-outs, the
decision to migrate or not depends on several factors.
“If the economics are right, we
would use the same platform that they were using,” he said.
“If there are less than 1,000
agreements, we would consider rekeying the transactions to our own