Is it all doom & gloom?

This has been an eventful week, with a major Wall Street bank being sold for a pittance, rumours spreading about almost every bank that you can think of, inflation rising ,and banks meeting with the Govenor of the Bank of England. But is it as bad as it appears?

In the equipment leasing market, another small funder has closed its doors to new business, with gossip about at least another two. The real facts are simple, credit critea have been tighten, and amount of advances to customers has been reduced. The lessors are simply putting sensible underwriting in place, instead of writing all sorts of borderline deals. The key is that they are now taking positive steps to the future.

We are told that inflation is rising, but this is mainly driven by the increase in fuel and food. If you take these out of the equation, inflation is only 1.2%. Even with fuel and food included, inflation was only 2.5 %, whilst in the Eurozone is has just hit 3.3%. With that in mind, a number of European countries are looking at the UK with envy. Things are always relative.

So, doom and gloom ? no I don't think so, choppy water, yes. Companies will always have to acquire new equipment, and it is times like these is where leasing can and will play a major role in recovery.

www.oaklease.co.uk

Credit Crunch Deepens

It is strongly rumoured that two more UK funders are pulling out of the HP & leasing market in the UK. If this occurs , it will encourage others to harded their credit terms even more, which will in turn make the problem even worse.

Hardly good news on this bright morning. This news will simply move the problem along as trade credit will be the way to survive for companies that are having their overdrafts reduced drasticly or even taken away.

Explain I hear you cry, well it is very simple, with restricted credit and rising bank charges and costs, companies will review their payment to suppliers and customers. By getting paid before having to pay the supplier is a well established practice for managing working capital needs, but now this could be the only option left open to many companies. The increase in extended credit terms will have a knock on effect for everybody.

There is nothing new in this, in the past this has led or more likely forced suppliers of equipment to lead with a leasing quote more than ever, as leasing enables the supplier to be paid out normally within 24 hours. So is leasing a remedy for trade credit? I will leave you to answer that for yourself.