Hispanic Latin America Study Now Available

Hispanic America has been drawing increasing attention due to the economies of these countries growing faster than the U.S. economy. This growth is creating business opportunities for U.S. equipment leasing and financing companies. But, there exists both potential and significant risk. As the report, developed by the Alta Group, points out, it is hard enough to be successful in one’s native country these days, and the task of entering a new market grows even greater in another geographic region, especially when it is compounded by different cultures.

On the plus side, Latin American countries (including the largest – Chile, Colombia, Peru and Argentina – and the smaller countries of Ecuador, Venezuela, Costa Rica, Honduras, Panama, Bolivia and the Dominican Republic) have more than 264 million people with an average purchasing power of $6,560 USD. The region has a strong focus on capital investment and equipment leasing is well established, and the industry grew more than 38% in 2007, cites the report.

However, risks of equipment financing in the region do exist, including:

• International Accounting Standards not being universally recognized in Hispanic America; for example, several countries prohibit the capitalization of leases by lessees;
• The availability of US-style credit information being almost non-existent in the region, although some useful credit bureaus exist in the larger countries;
• Repossession and recourse are extremely time-consuming and often expensive, and public, UCC-like asset registration does not exist;
• The used equipment market is largely undeveloped or non-existent in most countries, other than for automobiles;
• Regulations and license requirements vary widely by country, and must be understood clearly by applicants and license-holders.

Additionally, as in most countries, funding availability remains an issue for the foreseeable future. Equipment financing companies planning expansion into Hispanic America should complete thorough due diligence in each country to understand fully their prospective risks. A good first start in conducting research is with the Foundation report.

Donors receive the report free of charge. Non donors may purchase a copy for $300 from the Foundation store.