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January/February 2009
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| Message From the Executive Director
2009 is already proving to
be, well, a unique year. With a new
administration now in place, we can only hope that the new optimism translates
into positive changes for our industry and others. But, hunkering down for the
long haul is a theme we are hearing again and again. Change will come, but not
quickly. To that end, the Foundation is readying itself to an influx of
research needs Ð from the strategic to the tactical. Several new studies will
debut in 2009 and the research committee is gearing up for more. Have you
thanked a donor today? They are responsible for the continuing support the
Foundation may provide to the industry.
Lisa A. Levine, CAE |
Using Foundation Research to Strategic Advantage For 20 years, the
Equipment Leasing & Finance Foundation has been producing research with the
aim of supporting equipment finance companies strategic decisions as they
navigate the business maze. But, are companies really using the research to
full advantage? The Foundation has big plans to grow its
already-substantial library of studies and research papers in coming years.
And savvy industry members are using the Foundation research to plot a course.
One industry member, Aylin Cankardes, president of Rockwell Financial Group, finds the research quite valuable to their strategic and marketing decision-making. Read More |
| Reading Over the Shoulders of the Industry Future Council
From their discussion, the IFC Report is produced which is meant to provide a "workbook" or guideline
which can be used by providers and arrangers of equipment finance as they
undertake their own strategic planning efforts. As in recent years, the Council
will try to identify the questions Ð not just the answers Ð before the
industry, while identifying the sign-posts that will indicate future direction
and possible changes in direction.
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| Dealing with the Challenges Ahead: Quick Poll Answers Shed Some Light Each month, the Foundation asks industry members to provide a little insight into current thinking via its Quick Poll mechanism published in the Foundation Forecast newsletter. Last month's question, How will you cope with the financial uncertainty in 2009 provoked a good response, worth noting. The answers? More than 60 percent reported they will tighten operations and expenses. Interestingly, just 18 percent said they would lower or freeze employee head count, and a similar number (just over 18 percent) said they would enter new asset markets. Just over 2 percent will expand internationally and none of the respondents reported they would explore a lower credit market. |
| Credit Scoring Models and Bundled Transactions Get the Industry's Latest Attention Two new studies, funded by the Foundation, are currently in the field, including "How Good is Your Credit Scoring Model?" and "Bundled Transaction Frameworks" (both working titles). The credit scoring model paper will identify the specific risks associated with the application of credit scoring models to credit decisioning. An overview of exiting practices in the equipment finance industry, as well as practices that vary significantly from the norm, will be included. Recommendations for future courses of action will provide readers with options to improve model accuracy and reduce inherent risk exposure due to model deterioration. In addition to the paper, a Journal of Equipment Financing article will summarize key points.
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Foundation Events
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| Quick Poll |
| Did You Know? The first quarter of 2008 saw 985 trucking companies with fleets larger than 5 vehicles declaring bankruptcy, compared to 385 in Q1 2007, on top of a 52% increase in the number of failed trucking companies in 2007. Companies with smaller fleets, including the 9 percent of drivers who are owner-operators, are believed to have been hit even harder. (Source: 2008-2013, Transportation Outlook Series: Truck and Trailer Financing Trends) |
The 2009 Industry Future Council meets at Foundation headquarters February 2 to 3 to
discuss the major issues before the industry and to provide predictions and
likelihoods for the industry's future opportunities, challenges and success.
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