Equipment Financing in North America: Leveraging the Web

March 13, 2002

Abstract

San Francisco, CA, USA March 13, 2002

Equipment Financing in N. America: Leveraging the Web   

Whatever happened to the dream of moving equipment financing into cyberspace and its dream weavers? Most loan and lease exchanges had a nightmare. Web-based technology, however, continues to house great potential for improving equipment financing performance according to Celent Communications.

In a new report, entitled , Alenka Grealish, wholesale banking analyst at Celent, examines the potential of Web-based solutions for equipment financing and trade credit. "Given its Byzantine structure, equipment financing is ripe for efficiency gains and revenue enhancement through Web-based automation. Potential cost savings for the industry overall ranges from US$700 million to US$1,000 million and for manufacturers, trade credit automation could yield up to US$1,500 million in savings," concludes Grealish.

According to Grealish, "Online origination is not where the biggest bang for the technology buck is (though it is a relatively easy place to start), rather the bang for the buck is cumulative across the numerous pieces of the financing process. Web-based technology can weave together the numerous players, systems, and data sources involved in each stage of the process, pushing financing to the point-of-sale (e.g., vendor), automating the overall workflow, and expediting credit decisioning and fulfillment."

Commenting on the demise of online loan/lease exchanges, Grealish states that: "Their nemesis was the complexity of leasing transactions, which could not be reduced to purely a price game. Moreover, equipment financing companies would not allow their product to be reduced to a commodity."

Grealish concludes with: "the solutions, which will gain the most traction, will be those that deliver not only quantifiable cost savings and cycle time reduction but also allow companies to improve revenues and customer relationships. Because the equipment financing industry is heavily relationship based, the need for high touch will never go away. To the degree that technology vendors prove that high touch can be leveraged by high tech, they will win."

A Table of Contents is available online.

of Celent Communication's Wholesale Banking  research service can download the report electronically by clicking on the icon to the left.

        

Send mail to info@celent.com with questions or comments about this Web site.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

San Francisco, CA, USA  March 13, 2002

Equipment in North America: Leveraging the Web

Return to report Abstract

 

EXECUTIVE SUMMARY 3
BACKGROUND 5
  What is Equipment Financing? 5
  Market Size and Trends 7
  Performance Roller Coaster 10
  Competitive Landscape: Titans and Lilliputians 12
E-FINANCING: BACK TO REALITY 14
  Equipment Financing: A Byzantine Process 14
  Online Originations: The Dreams vs. the Reality 15
  The Solution: High Touch Leveraged by High Tech 17
  The Impetus: Cost Savings and Revenue Potential 19
TECHNOLOGY PROVIDERS WEAVING WEB SOLUTIONS 21
  A Snapshot of the Innovators  21
  Pure Markets and LeaseNOW: Long Live Online Originations 25
  eCredit: Pushing the Credit Decisioning Envelope 28
  CapitalStream: Reducing Costs and Credit Risk 30
  Cyence: First Mover in .net 31
  LeaseTeam: Providing Back to Front-Office Solutions 33
  LiveCapital: Teaming with D&B 34
  eFinance: Coupling Credit with Business Development 35
  WiredCapital: Striving to Expedite Complex Deals 36
  LendX and LeaseForum: Bringing Lessees on Board the E-Train 37
CONCLUSIONS 40

 

        

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