Equipment Leasing Association's Monthly Leasing Index

Sunday, October 30, 2005

ARLINGTON, Va.--(BUSINESS WIRE)--Oct. 31, 2005--The Equipment Leasing Association (ELA) today released the ELA Monthly Leasing Index (MLI), which indicates a significant upturn to end the third quarter. In September, new business volume increased from August's $4.28 billion to $5.06 billion, representing an 18.1 percent increase. This is also the highest reported amount of new business volume for any month this year. Approximately 20 major equipment leasing and finance companies are surveyed on a monthly basis for the MLI.

Noting the strong monthly performance indicated by the September MLI, Ralph Petta, Vice President of Industry Services, stated, 'Despite the hiccup in portfolio quality, the September numbers show a robust leasing business, which is surprisingly strong given the weather events and high energy prices that occurred during the quarter.'

Delinquencies (net of unearned income billed but not yet received) remained virtually unchanged from August, coming in at 97.92 percent. However, this remains below March's high of 98.46 percent. Credit approval ratios increased very slightly to 82 percent compared with 81.7 percent in August. Average charge-offs, however, increased significantly, coming in at 0.69 percent, up from August's 0.43 percent. Petta noted, 'This is due to a couple of outliers resulting from two respondents who reported very significant increases in that statistic for September.'

The total number of employees increased slightly to 9,001 compared to 8,939 in August. Although off from April's high of 9,259, this puts total FTEs back over the 9,000 mark.

The MLI is issued on the 30th of every month(1) and provides trend analysis across all major performance areas of lessors, including new business volume, aging of receivables, average loss, credit approval ratios and number of employees.

Because the same companies participate in the study each month, the MLI provides a fairly reliable and consistent trend analysis of current industry activity. Results of each MLI are posted on the ELA website and in Equipment Leasing Today magazine.

Charts and graphs are available for reprint to members of the accredited media. The illustrations reflect the data provided by those companies responding to that particular question. Typically, not every company polled responds to every question.

In addition to the MLI, ELA provides a variety of data, including customized market analyses, to ELA members and organizations involved in the forecasted $248 billion equipment leasing industry. To access this and other industry information, visit the ELA website at http://www.elaonline.com/IndustryData/ or contact Dean Frutiger at (703) 516-8380.

(1) Should the 30th of the month fall on a non-business day or holiday, the ELA Monthly Leasing Index will be issued on the next business day closest to the 30th."

read full article

  

Two New Healthcare Equipment Leasing Studies Provide Comprehensive Overview and Details of Healthcare Financing Marketplace

Friday, October 28, 2005

ARLINGTON, Va.--(BUSINESS WIRE)--Oct. 28, 2005--

$15 Billion In New Business Projected Over Next Two Years As Healthcare Equipment Sales in IT Systems, Outpatient Care Grow

Two new studies were released today which provide complementary macroeconomic overview and market-specific details for use by the equipment leasing industry. The Equipment Leasing Association (ELA), the non-profit association representing companies involved in the forecasted $248 billion equipment leasing and finance industry, and R.S. Carmichael & Co., Inc., a marketing research and management consulting firm, White Plains, New York, have released a new report, Healthcare Equipment Leasing: U.S. Market Dynamics and Outlook 2005-2006. The Equipment Leasing and Finance Foundation, a non-profit organization dedicated to enhancing recognition and understanding of equipment lease financing, released its study researched by the University of Virginia Darden School, Long-Term Trends In Healthcare: Implications for the Leasing Industry. Together, The Healthcare Financing Compendium provides the most comprehensive information currently available on the dynamic healthcare market and its implications for the equipment leasing and finance industry.

'These two studies provide thorough insights into the drivers of healthcare equipment leasing,' said Ralph Petta, Vice President of Industry Services for the Equipment Leasing Association. 'This is a tremendous resource for organizations in healthcare and equipment leasing to understand how the healthcare marketplace is financed and why.'

The ELA/Carmichael market study focuses on the leasing practices of healthcare providers, including hospitals, outpatient centers and physicians' offices. It also examines the market from the standpoint of healthcare equipment vendors and lease financing competitors.

Highlights from the report include:

-- The estimated size of the U.S. healthcare equipment leasing market in 2005 is at least $7.0 billion in terms of new volume.

-- The healthcare equipment leasing market is projected to exceed $8 billion in volume by 2007, attributable mainly to forecasted equipment sales growth (as opposed to significant gains in lease penetration).

-- Over the past five years the average annual rate of lease financing market growth in healthcare has been seven percent.

-- Healthcare equipment leasing is primarily a 'middle-market' business, with most transactions in the $250,000 to $5 million range.

-- The hospital market represents a growth market for IT systems (e.g., digital radiology systems that store, retrieve, distribute and display medical images in digital format).

-- The outpatient care market, especially the ambulatory surgery center segment, also continues to grow as a market for lease financing.

-- When investment in all healthcare equipment is considered, lease financing penetration is relatively low and appears to be stabilizing due, in part, to reimbursement reductions, regulations affecting physician referrals, and a lack of awareness of leasing as a tool for equipment acquisitions. However, the upside potential remains substantial although leasing companies will continue to see challenges in realizing the potential opportunities.

'Equipment leasing continues to represent a fundamental source of capital financing for healthcare providers,' said Richard S. Carmichael, Managing Director of R.S. Carmichael & Co., Inc., which conducted the study. 'Healthcare industry conditions such as steady growth, capital budget constraints and rapid technological changes create opportunities for equipment leasing to make greater inroads.'

The Equipment Leasing and Finance Foundation report features an overview of healthcare industry trends, a statistical analysis of leasing transactions and implications for leasing and finance organizations.

Among the study findings:

-- The healthcare industry in 2004 represented a $1.8 trillion annual market that accounted for 15.4 percent of total gross domestic product (GDP).

-- Healthcare's share of GDP is expected to continue to increase every year to 2014 as healthcare expenditures growth are expected to outpace GDP growth.

-- Small, professional firms are the most significant business form in the healthcare sector, followed by not-for profit organizations.

-- The critical element in improving the productivity of the healthcare industry and reducing its cost growth is capital investment in productivity improving technology that will substitute capital for labor.

'Knowledge of both historical and future trends in the healthcare industry is key to participating in this marketplace,' said Lisa Levine, Executive Director of the Foundation. 'The Foundation study on long-term healthcare trends provides those and other critical perspectives on the healthcare industry.'"

read full article

  

Strengthening Leasing Finance in Slovenia

Friday, October 21, 2005

Slovenia Oct. 21 2005
Press Release - European Bank for Reconstruction and Development

The EBRD is extending a €5 million loan to Bank Austria Creditanstalt Leasing d.o.o. (BACA Leasing), a leasing company operating in Slovenia and owned by Bank Austria Creditanstalt AG. The financing, which comes under the leasing window of the EU/EBRD SME Finance Facility, will be used exclusively for leases to micro- and small-enterprises not exceeding €125,000. The loan will be complemented with €700,000 from the European Commission for staff training and institution building.

The Slovenian leasing market is particularly competitive with the ten largest companies accounting for almost 90 per cent of the total new leasing volume in previous years. BACA Leasing has been gaining a strong market presence in equipment leasing and covers leasing in a wide area from manufacturing and services to trading. The company also sees strong potential in the real-estate market.

Francois Lecavalier, Head of the EBRD’s Slovenia office, said the loan will help further facilitate the financing of Slovenian small and medium-sized enterprises, the growth of which is key for the successful development of the country’s economy. Widening its costumer base among this segment will allow BACA Leasing to grow its leasing volume and strengthen its market position.

Alfred Taul and Boris Bobek, Managing Directors of BACA Leasing, said the loan was an opportunity to further boost Bank Austria Leasing’s support for SMEs in Slovenia, which represent the most progressive and fast growing business segment and the backbone of the country’s economy. Bank Austria Group has a very good track record in financing SME’s and wants to further strengthen its involvement in this sector in Slovenia.

The EU/EBRD SME Finance Facility, a joint programme of the European Commission and the EBRD, supports the development and growth of entrepreneurs by facilitating their access to finance. The Bank will make available funding of €1.1 billion, of which €830 million has been committed to signed projects. The EC has been contributing €156.75 million in grant financing and for technical assistance since the launch of the programme in 1999."

read full article

  

Computerworld Singapore - Cisco bets a billion dollars on India

Saturday, October 08, 2005

By Phil Hochmuth, Network World (US online)
Updated: Oct 21, 2005 10:28 AM

Cisco has said it will invest US$1.1 billion in India over the next several years, with new projects in R&D, venture capital, equipment financing, and customer support targeted for the world’s second-largest country.

Cisco has said it will invest US$1.1 billion in India over the next several years, with new projects in R&D, venture capital, equipment financing, and customer support targeted for the world’s second-largest country.

Cisco Chief Executive Officer John Chambers said the move is to address the rapidly growing economy and IT needs of India. “India has rapidly risen to become a major force in the global economy. As Indian companies strive to be globally competitive, they have realised the importance of investing in information technology and networking.”

According to the World Bank, India’s IT sector accounted for approximately 4 per cent of its GDP between 2003 and 2004, with almost a million employed in the sector. More than 100 multinational corporations have set up R&D centres in India.

Cisco will invest $750 million for R&D activities, including training and development of engineering staff, as well as partnerships with local companies in R&D. (This equals about a quarter of Cisco’s estimated total R&D budget of $3 billion in 2004). Cisco’s financing arm, Cisco Systems Capital, will invest $150 million to support product leasing and financing for customers in India. Meanwhile, $100 million will be invested in venture capital for India-based start-ups and investments in customer support. Another $100 million will go to support investments, including channel partner and technical services areas."

read full article

  

So bad that MFP has to change its name (Canadian Union of Public Employees)

On Sept. 29, Toronto City Council voted 42 to 1 to ask Toronto police to forward their inquiry efforts and findings to another force for a more independent inquiry. That same day, lawyers for the city advised that Toronto should pay out $9.65 million to settle a lawsuit with MFP Financial Services Ltd.

Enormous public resources were spent on MFP, the inquiry and on a lawsuit against the former private financial services company. To add to the costs is MFP’s counterclaim stating the city still owes it money under the leasing agreement for computer equipment.

Here is a recap of the MFP scandal of inflated billing and unaccountability:

* The initial $40 million computer leasing contract ballooned to just over $100 million.
* Dash Domi, former salesman for MFP, secured a bonus of $1.2 million for getting the contract.
* Justice Denise Bellamy, who oversaw the two judicial inquiries looking into computer leasing and other contracts, found “credible evidence” that Domi gave then councillor and budget chief Tom Jakobek a $25,000 payoff.
* Jeff Lyons, a lobbyist who was involved in the MFP scandal, was under investigation by the Ontario Provincial Police for allegedly accepting a $150,000 bribe from two Dell Financial Services salesmen. The OPP also investigated Lyons over whether he ordered an aide to deposit $15,000 into her own account and use the money to write personal cheques to 29 candidates for municipal council. No charges were laid against Lyons by the OPP.
* The inquiry itself cost the city $19.2 million and lasted nearly three years.

MFP, now known as Clearlink Capital Corp., is familiar with the halls of justice. Several cities in Ontario have had similar issues as those in Toronto.

In August, Clearlink settled a lawsuit with the City of Windsor and Essex County for an undisclosed sum. Windsor filed a $305 million lawsuit in 2002. The city claimed irregularities dating back to 1995 with leasing arrangements on communication devices, firefighting equipment and a host of other supplies for the city.

MFP financed RIM Park, a 500-acre park and recreation facility in Waterloo. The cost of the park more than doubled to $227 million without city council approval. A settlement brought the cost down to $145 million.

In July 2005, Clearlink decided to mothball its main operation of equipment leasing. Clearlink now cites its main activity as the equipment trading business. Municipalities beware.

Clearlink, a company with shares on the Toronto Stock Exchange, issued a statement in July that addressed its situation: “The substantial amount of time and focus on litigation matters with resulting negative publicity, together with worsening economics in its technology leasing area, has resulted in a substantial erosion of the corporation’s prospects in its traditional core business.”

Public financing and leasing arrangements would have saved Toronto, Windsor and Waterloo millions of dollars, lots of headaches and the public trust."

read full article

  

Ready to Sign that Lease Agreement?

Wednesday, October 05, 2005

The real estate market is booming across the United States, especially in select areas of California as well as Las Vegas. Even the sleepy town of Boise, Idaho is experiencing record breaking primary residential development. Where ever you happen to live, you have probably noticed it’s not so easy to get into that coveted house you have always dreamed of, despite the favorable mortgage rates. So what should you do?

Lessons Learned from the Past

With such uncertainty around the real estate market, perhaps it is best to stay away from owning your own property. Many so called experts predict the housing market in the US has finally reach bubble status, and expect that bubble to burst in the near future. They may have submitted their predictions a bit early, but their advice should be considered. If we learned anything from the stock market bubble and subsequent crash of 2000, we realized frequently a conservative approach to investing serves us well when uncertainty surrounds the market.

Protect yourself and consider the advantages of renting or leasing versus buying your own home. A renter assumes far less risk by signing his/her name to a lease agreement than when closing on a house. Typically a rental agreement locks you into a contract for a short period of time, relatively speaking, during which the rental rate is locked as well. Such a contract can protect you from the downswings of the real estate market, especially the volatility frequently demonstrated by adjustable rate mortgages. Granted, as a renter you don’t stand to gain any equity in the house should the market turn up. However, you also don’t expose yourself to the violent downswings in housing values wrought by an oversaturated market. Should you buy a house now and a year later need to move to pursue a new job opportunity, what happens when your realize those inflated prices you paid for your house are not so inflated anymore, and suddenly you owe more on your house than it is worth? That is called negative equity, and instinctively you realize no good can come of such a situation. Hence renting offers flexibility, both financially and physically speaking.

Avoiding the Headaches of Ownership

By agreeing only to rent the dwelling, you manage to avoid many of the disadvantages associated with owning a house. Normally the landlord is responsible for general maintenance of the flat. Many home owners are quick to offer their stories of frustration, disappointment, and even anger when things go wrong in the house. Pipes burst, flooding occurs, air conditioning units break during the scorching summer days of July, and heating systems fail in the dead of winter. All these things can and will happen, setting homeowners back considerably. Thus, as a renter you can avoid many of the major financial investments owners must make to maintain the comfort and livability provided by a dwelling. Agreeing to a lease agreement helps mitigate the risks of living in a home or apartment.

Weighing your Options

A rental or lease agreement can offer many advantages to those of you looking for a place to live. Ultimately, each individual must decide what is right for them. Some are more than willing to bear the risk inherent to the housing market because they have a strong positive cash flow and are in a position to endure the twists and turns of the market.

Don’t be afraid to weigh your options and consider the risks of owning versus renting. For many, playing the game conservatively and waiting for housing prices to come back down to Earth will prove to be a successful strategy. There is no shame in signing that lease agreement, living in an apartment for a year or two before moving on to that house you have wanted so badly."

Adam Smith is a client account specialist with http://www.10xMarketing.com – More Visitors. More Buyers. More Revenue. For more information about lease agreements, including real estate advice and strategies, please visit http://www.oneminutemillionaire.com/affiliate/glossary/lease-agreement.asp

Article Source: http://EzineArticles.com/

read full article