oaklease blog

What will the New Year bring us?

2011-12-21T09:59:00.004Z

It is at this time of year that people start to think what the new year will bring them, we all hope for better things, and that hope is what drives us all on.

Hope is a positive, but you have to look at the coming year in the hard light of reality. So lets get the bad news over first. I do not believe that in a years time, the eurozone will look the same, some members I expect would have left, or there will be a two tiered eurozone, possibly North & South. Only this morning, the European Central Bank have come up with yet another sticking plaster to the crisis, this is where the eurozone banks can borrow direct from the ECB to help them through the next 2- 3 years.

As the BBC's Business Editor Robert Peston puts it this morning "Because the whole reason that eurozone banks are perceived to be weak at the moment, and why commercial lenders are shunning them, is that these banks are seen to have excessive exposure to sovereign borrowers who may not be able to repay all they owe.
Or to put it another way, the ECB is taking a double solvency risk: on the solvency of the bank to which it lends and on the interconnected solvency of the sovereign standing behind said bank, and to which said commercial bank has lent "

This is a recipe for disaster for waiting for the eurozone down the road, how far down I have no idea, but at least you know that the light at the end of the tunnel is now a train.....!

That's the bad news over and done with, and now moving swiftly on with positive news, Asset based lending grew faster than any other form of lending in the third quarter of 2011. Total funding was £16bn in this period.
This included sale & leaseback & asset refinance, where companies can release tied in capital in equipment, for either expansion in new areas,a Plan B, or to cover irregular cash flow problems.

Another growth area which many people shun because of perceived problems is selling into the eurozone.This is a huge market opportunity which companies simply cannot ignore.The European vendor leasing area has seen Oak Leasing's largest growth over the last three years.We are able to arrange leasing in almost all of Europe in conjunction with our funding partners. This gives you the chance of using our expertise and experience to help you grow in these vital markets. And the best part is we make no charge, its free.

Decisions normally within 48 hours, and we handle all of the lease documentation in the language of your customers through the local offices of our european leasing partners. You have nothing to lose, but I would think a great deal to gain.

So as we look back over the year, it has been hard, perhaps harder than we all thought last January, but hope and opportunity is there for us all to seize in the New Year.

You heard this first here!

2011-11-04T09:28:00.000Z

According to Reuters this morning,

"Italy holds the key to the euro zone debt crisis," BNP Paribas analyst Luigi Speranza wrote in a research note late on Thursday. "Developments in Italy are a crucial test for the credibility of the anti-crisis framework set up by the EU." Concern is growing that Italy, the euro area's No. 3 economy and biggest government bond market, could go the way of Greece and require a bailout without rapid action.

The question is, what the the action be, will this be a light trim, a short back and sides, or something else!

Watch this space !

The price of a haircut !

2011-11-02T10:51:00.003Z

I am sure that you would have noticed that new word has emerged as a buzzword. It is of course a "haircut".

I am old enough to remember when a haircut was a short back & sides, enough to last for at least 6- 8 weeks. But a haircut now only lasts a few days in the financial world, before they all have to go again to discuss how to have another hair cut!. When a country cannot pay what is owes, it used to be called a default, but default is a naughty word and cannot be used, so they have come up with the word "haircut" which in laymans terms means the banks and lenders have to write off a percentage of what a country owes them, i.e. a default!

You may have also noticed that the Euro is in a spot of bother, France is saying how it saved the euro last Thursday, ( with help of course from Germany). But they never learn from history, doesn't the phrase beware of Greeks baring gifts ring any alarm bells? You could see by simply watching what is happening in Athens to realise that a just "haircut" was not going to save Greece.

They key fact to look out for is the price of Italian and Belgium bonds over the next few weeks. If the price of Italy's bonds rise over 7.00%, I think that the game is up for the Euro, it will purely be a matter of an orderly default. ( note the word default, not a "haircut" !)

So there you have it in a nutshell, the Euro problems are down to the cost of a haircut, it used to be two bob, but it appears to be very expensive now.

The other news is that the UK economy is growing, up to .5%, whilst German latest growth figures are.1%.I am aware they the figures are low, but to think we are ahead of the German powerhouse economy is not to be sniffed at! And on that note, I will simply say that Oak is funding more companies than ever before, from start ups, to company refinancing, to straight forward leasing. I will leave you with a post it note to keep on your desktop.

Deja- Vu? or Here we go again!

2011-10-11T10:33:00.000+01:00

Here we are again, as if we have never left, the headlines are the same as 2008, banks in trouble, blah blah blah.

What I find amazing is that this could have been averted almost a year ago if the the European Central Bank had acted decisively when the Greek crisis emerged. Instead of action, they fudged and fumbled along, national issues taking precedent over European issues, and by using sticking plasters instead of life saving surgery. Amazingly, the patient simply got worse.

The fear of a Greek default, ( which is now almost certain to occur) has created a liquidity squeeze on most European banks. Dexia is just the first of many that will require funding According to the FT, the figure of €200 billion is just enough to cover the provision against debt by Portugal, Ireland & Greece. That beggers the question of how about Spain, Italy & Belgium? Does the ECB have enough firepower, and crucially political will to sort this whole question out?

According to newspaper reports, banks in Germany, Italy & France are looking at shortfalls. This will simply increase the liquidity squeeze, and that will affect all of us.

So we all wait until the next Euro Summit, when all will be revealed, and the Germans & French will have saved the Euro, and the Euro Zone, but don't hold your breath !

That is the bad news, however, the UK is still moving forward, Just, I know but still forward. We can either say as Frazer in Dad's Army say "we are all doomed", or we see what is actual happening, franchisee's are expanding, opening more outlets, they know to stand still is really to go backwards. At Oak Leasing we are very active in our support for new start business, and are always willing to assist also established business in expanding and even to help establish new & valuable credit lines for those companies whose banks are simply moving away from their customers.

Come and visit us at www.oaklease.co.uk, and see how we can help you grow in the face of challenges, both in the UK & Europe

A country in Europe Beginning with the letter G

2011-09-16T10:22:00.000+01:00

Way back in June, I stated that it was purely a matter of time when Greece would leave the Euro, not if she would leave the Euro. Everyone's attention is firmly on Greece, and her financial woes. Greece is history now ( no pun intended) the country we should look at is Germany, for only she has the financial clout to save Greece & the Euro .

And there lies the underlying problem, Chancellor Merkel is being slowly edged towards the "Eurobonds " solution, and saying that Greece will come out from this mess, whilst her coalition partner, Philipp Rösler, the vice chancellor and FDP leader, said it should no longer be a "taboo" to talk about a Greek insolvency.

The conservative newpaper Die Welt said yesterday "It's a question of attitude, and whether to reassert such noble principles as avoiding debt, taking responsibility for mistakes, and protecting public funds -- principles which every state institution and every responsible politician must honor." And with the CDU having poor showing at the recent elections,Chancellor Merkel is now between a rock and a hard place.

So with German opinion turning firmly against Germany bailing out Europe, the saga continues, and the markets look on. Even yesterdays action from the main Central Banks will in my view, only delay the inevitable.

On a brighter note, Oak Leasing has been chosen by a large Restaurant Franchise Operation as its leasing partner for all new projects. The key is there are always opportunities for entrepreneur's to move forward in any type of business, in any economic cycle. That is where Oak Leasing, with its expertise can, and will help new start entrepreneur's, and give them the financial help to start them on the road to success. Whatever happens in Europe, it is critical to support our new start business's in the UK, for without them, we will all struggle.

The elephant in the room

2011-08-17T10:53:00.000+01:00

Talk is cheap they say, but the talk that the EU leaders are currently engaging in, is very expensive. There is a huge elephant in the room , and they are ignoring it ! They could have sorted out the whole crisis months ago with decisive action, but they simple dithered. Germany & France really hold the major purse strings, Germany domestically cannot proceed with what is needed, which is a "euro bond". With an election due next year in Germany, the "eurobond" will be the decisive factor, and Chancellor Merkel knows this only too well.

So the real decisive factor is not down to the EU, but Germany's domestic election.The next question is, will the Euro wait for the decision from Germany. My own view is that the pressure on the Euro will simply mount until something has to be done.

Whilst this is going on, the UK, is not flying, but still has its head above water, and as yesterdays figures about German growth show, we are not doing as bad in the real world as some people thought.

The next few weeks will prove quite exciting for the Euro-zone, but if the UK continues on its slow but steady growth, we will be OK. There is a great deal of talk concerning Bank Lending being restricted, remember, Oak has the capacity to help in all of your acquisitions, we can even arrange sale and lease back if you wish.

Something Oak has not got, that is an elephant!

Is Fudge Europe's most popular sweet?

2011-07-26T16:14:00.001+01:00

I am sure that Fudge has to be the EU's favourite sweet, they have been fudging ever since the first financial alarms sounded concerning Greece. Up to last Thursday, it was simply too little too late.And even after Thursday announcements, I think they are simply postponing the inevitable.

On top of the Fudge, we have the US taking brinkmanship to a new level. Now on the face of this, you might wonder, will this effect us in any way? If we take the US problem first, most banks use US bonds as gold plated collateral security in the interbank lending. If the US loses its AAA rating, so do the US bonds. This in turn will make banks very reluctant to lend to each other, and this puts the brake on any bank lending to SME's et al.

In the EU, it is purely a only matter of time before Greece finally cries enough is enough and disengages from the Euro. I do not think that any amount of patching up can sort out their deficit The effect on this to the Euro is unknown, but I would suggest that it will weaken.

However, there is an upside. Although the UK is not flying by any means, we are stable and growing, I know by only 0.2%, but in the teeth of the recent cuts, this cannot be sniffed at all. They always say that the best time to invest is when you are coming out of a recession.

May I simply say that we have the money to help whatever business you have to invest in the equipment that you need, and that you will know that once a lease is signed, it cannot be recinded during the period of the lease, whilst an overdraft can be withdrawn in just a few weeks leaving you high and dry.If you need a new credit line, just give us a call. here.

Compared to fudge, this is glacier mint. Now where did I put the sweet tin !

Rarer than Hens Teeth !

2011-06-29T10:33:00.000+01:00

The banks are still not lending to SME's. According to the Bank of England today, "small businesses are still being rejected, ignored and treated unfairly by banks", MPs were told yesterday.

Sir Mervyn King said yesterday that "Lending to businesses by banks is still falling"

The big question is when will the lending climate improve. I personally think that although the climate is harsh, it could get worse in the next year as the Greek question on default begins to affect not only Greece, but the banks who have lent money into Greece. To give you an idea to the size of the problem, according to the BBC, bank & private lending from French Banks into Greece is just over $40 billion, Germany next with $11 billion, and the UK at just over $10 billion.

If these loans turn into problems, this amount of money will simply disapear from the debt market and will have to be refinanced through other ways, most probably via the relevant governments.

At the moment, although the conditions are very tough, we at Oak have the ability to lease or refinace projects from £1000 up to £5 million plus, both in the UK as well as Europe, and crucially have expanded our lines well into the next few years.

So if you are looking for hens teeth, you know where to come!

Standing still is not an option.

2011-06-13T12:29:00.000+01:00

Back in the mid seventies, when I first started in Leasing, the company I was with launched a sliding card lease calculator, which worked out the lease rentals for every £100 increase in costs. This was considered the most cutting edge sales aid tool available. At this time, remember that a simple calculator was costing in the region of £8- £ 10, and back in the 70's that was quite a lot of money.

How things have changed, last week, Oak Leasing launched the first equipment leasing app in the UK. The amount of information and the rate calculator available would be something that dreams were made of back in the seventies. From simple calculators, we moved on to PC's, whose capacity and speed have changed evrybodies lives. Now it seems that PC's are beginning to look dated, with new cloud technology starting to take over.

I have said many times, standing still is never an option, and technology is helping everybody access information quicker, and at a time that suits them best. That was one reason why we launched the Oak leasing App, you can work the rentals out, propose the customer, whilst sitting with the customer. Leasing has now access to another closing tool, and in this present climate where only last week Vince Cable was bemoaning the bankers lack of providing enough credit, many people forget that lease finance is a simple but effective tool in overcoming budget restrictions as well as cost objections.

Now where was my sliding rate calculator.

Its nice to know you are right!!

2011-05-19T14:19:00.002+01:00

This was published yesterday on an international leasing website. They must have read what I said last month !!

"New global prudential regulations are likely to bring a material increase in the cost of all credit provided by large banks. This, in turn, is certain to affect the global leasing market, because of the prevalence of bank-owned or bank-funded operations across the market".

To keep in the know, just read the oaklease blog, and be a step ahead of the rest.

2011-05-12T15:13:00.000+01:00

They say every cloud has a silver lining, although in this present financial climate, you have to dig pretty deep.

The crisis over the Eurozone, is deepening, even if all the politicians seem to be denial. The Finnish Government can halt the Portugal debt bail out; the Greeks are still on the slippery slope, and just when you think the Irish are working their way out of the problem, the French say the will only agree to a rate cut to the Irish, if the Irish change their ultra low tax rate on business. "C'est La Vie!" Nothing new in Europe then.

In the UK, we are still slowly emerging from our recession, according to the latest information on bank lending, net lending to UK firms has actually been falling significantly in recent months, according to the British Banking Association, which recently produced figures showing that it fell by £4.6 million in February and by £4.7 million in March.But you need to replace some equipment to expand and grow your business. So what is the way forward for you?

We all know, you cannot stand still, to do nothing is simply sliding backwards. Every time, the banks have acted like this, leasing has grown, as the demand for extra credit has turned from expensive bank overdrafts to equipment leasing. The slight silver lining lies here, as inflation rises, a lease rental is fixed, so inflation will erode the real cost to the company. This coupled with the fact that leasing companies are hungry for your business means that there should be some great deals out ther for you.

In all this financial news, at least I found a sliver of silver.!

Please keep your comments coming. They are much appreciated.

What Lies Ahead for Leasing?

2011-04-19T11:28:00.000+01:00

After a break, I thought that I should start up again with my thoughts on where we are now, and what lies ahead.

Leasing at the moment is moving ahead quite well, not as well as pre 2007, but certainly far better than 2009. So that is the good news. The art of running a business is to try and anticipate what the future might come up with, and to prepare for what lies ahead.

No one is sure what lies ahead, but there are indicators of what might happen. With the reforms proposed by the Independent Commission on Banking , it will could cause difficulty in the banks raising the wholesale debt that they will require by the end of 2012. This amount is somewhere between £400 billion & £500 billion.There is a concern that there is not depth in the market to buy all of this debt.

The concequence is that debt will become a scarcer commodity, and as we all know, the price of a scarce commodity always rises. Simply supply & demand.

So why should this be a concern to me I hear you ask. I think that credit could become more limited during the latter part of this year & next year. The cost of credit, I also think will rise accordingly.

Now we come to the nub of the matter, if you are thinking of investing in any plant & machinery of any sort, now is the time to do so for many reasons.

Firstly, with a lease, the rentals are fixed throughout the period of the lease, so no matter what the market might do in the next few years, you have ring-fenced your equipment leasing costs.

Secondly, there is credit available right now, and is priced reasonably according to risk. So to sum up the old TV game show, "The Price is Right" and you have fixed repayments throughout an uncertain few years.

From the suppliers point of view, you have a window of opportunity, You and I know that windows always start to close at some point.

I have tried to put the events of the real world into a normal perspective. I would appreciate any comments from anybody. I just hope that this is of help.

The moving of the goal posts

2009-04-03T12:07:00.005+01:00

In this present financial situation that we find ourselves locked into, we are all fully aware that change has hit the leasing industry.

The change is not for the better as all of the main leasing companies have simply picked up the pitch as well as the goal posts, and have moved them twenty five miles down the road.

Large sectors of the market are now almost "no go " areas for the underwriters. Just think that building, construction, motor, retail etc, huge swathes of the economic base of the UK are almost excluded from leasing.

The effect on suppliers of equipment who use leasing as a sales tool is they have been left high & dry. One funder quoted a very large manufacturer last week that unless the customer was either a local authourity or part of the government, they could not accept the risk. Whilst I understand that underwriters have to change their terms, and become more risk adverse, unless they are very carefull they will descend into oblivion.

Let me explain, if you reduce the amount of new business you are writing, the percentage of bad debt on the leasing book has to rise. If you start to put into the equation that deliquency is rising, the percentage of bad debt will rise faster and faster, until someones says enough is enough, and another funder closes its doors.

This coupled with the fact that underwriters are now looking very closely at ratios and net worth of companies, which companies will show growth in their net worth in the next accounting period 08/09? I would expect very few. This will purely exacerbate the problem.

So what is the road ahead? I think as the Beatles put it very succinctly, it will be a long and winding one ! The key is to think outside the box, and seize opportunities that will arise. That is what Oak Leasing has done ( see Leasing Life article)

To see how we can help, just send us an e-mail sales@oaklease.co.uk. We will help you seize the opportunity.

Overcome the credit freeze, with equipment leasing.

2009-01-05T10:14:00.005Z

We always expect January to be a cold month, as the winds from the North sweep down the country. This year it is not so much as the icy weather, but the increasing credit freeze hits all types of businesses, with no sign of a thaw insight. According to the accountants Deloitte's this morning, 99% of finance directors that they asked, rated credit as hard to obtain. It is this creditfreeze that is driving the recession.There will be no recovery until the credit tap is turned on again.

Accessing credit is now the major worry for most companies. And if you can find credit, the pricing has increased sharply, and its terms are far harsher than they were a year ago. With banks now having a reduced capacity for lending, coupled with a growing fear of rising bad debts, which appears to be justified, the credit freeze has only just started.

So what does the future hold for us all? Well I think that cash flow management will prove to be crucial in the coming months. With companies experiencing growing bad debt on their invoices, and every bad or doubtful debt hitting the bottom line, companies will turn to either factoring or invoice discounting. Both of these options will cost you money. There is a third way, that will not cost you a penny.

If you lead with a lease rental figure on every quote, and lead with a leasing figure in every closing conversation, your leasing penetration will increase, and as you are aware, the leasing companies will normally pay you by either TT or Bacs within 2- 3 days, saving you worrying about the outstanding invoices. In every recession that we have been through in the last 35 years,equipment leasing has always increased, as the suppliers need it for their cash flow, and the customers require it as a new credit line. So it is a win- win situation for both suppliers and customers.

For more information, just visit the UK's most popular leasing company website at http://www.oaklease.co.uk/.

Credit Crunch turns to Credit Freeze.

2008-12-02T08:39:00.004Z

Just as winter starts, the crunch turns to a freeze, how appropiate. Hear is the news that many people are unaware of, M4 Money ( Private Sector Money) fell to 3.5% year on year in October compared to an average of 9% over the last three years. This is the latest data from the Bank of England.

So what does this mean to you and me? It is very simple, we are now in the grip of a credit freeze. A credit freeze is where the banks or lending institutions show a great reluctance to either renew a credit line or overdraft or reduce the amounts and terms in which they are prepared to offer to you or to your customers. With the banks controlling about 90% of the small business lending market, either through overdrafts, loans or leasing; when they revert to type and cut back as they always do in a recession, it effects all the small business's in a disproportionate way.

Cash flow begins to take a new priority. As more and more of your customers take longer and longer to pay, you are in effect funding their cash flow, and damaging your own. Their is a solution to both parts of the credit freeze. With banks in their current frame of mind of retrenchment, they appear very reluctant to offer new loans or increase overdrafts. This is effecting any equipment reseller.

However if the reseller used equipment leasing, it gives the customer a new credit line and helps in closing the sale. The other main benefit of leasing in a credit freeze is that you will get paid normally by BACS or TT within 24 hours, so the money is in your bank, and not in someone elses, assisting your cash flow.

So the ball is firmly in your court, to help overcome the credit freeze, use leasing, preferable Oak Leasing !

http://www.oaklease.co.uk/ The UK's most popular leasing company website.

And now for some common sense.

2008-10-31T10:47:00.002Z

The media is discovering that credit crunch news is making people either change channels on the TV or turn off the news. Saturation point has been reached, but they still try to ram it down our throats.

By simply going over the news with slight variations does not mean that it is news. We are all aware of what has occured, and who is to blame. End of story. Move on.

We cannot dwell on what has happened, we have to look to the future. Doom and gloom is no good for any business. If we think that the end is nigh, it surely is, but I think it is high time to be positive and seize the opportunities that are out there.

Historically the strong would overcome the weak, but this time it will be different. Companies who seize the growing opportunities will succeed. It is the quick that will overcome the slow.

We all know that the banks have tightened up their lending policies.We all know that they are reducing overdraft limits, and this is hitting SME's and medium business's very hard and they try to survive. By using leasing, it overcomes using valuable working capital or part of an overdraft to acquire needed capital equipment. Remember standing still is just an illusion, you are going backwards. For any equipment suppliers, you have to use leasing to help sell your equipment and also help your customers survive. Use and promote leasing on your website, it is not an option, it is a necessity.

Getting down to brass tacks, many leasing companies have closed off their leasing books, and have either stopped offering leasing, or have changed their underwriting criteria beyond recognition.

We have the money, you have the customers, lets talk, and get some leasing proposals underwritten and paid out. The quick will survive, the slow will not, perhaps that is what will eventually come of this period on uncertainty.

Oak Leasing Ltd. The UK's most popular leasing company website.

Stormy financial weather ahead.

2008-10-10T09:45:00.004+01:00

The British are well known that we talk about the weather. Here is today's forecast. There is a very cold wind blowing across Iceland, with a deepening Atlantic depression moving in an easterly direction.

Any firm that uses equipment leasing as a sales aid to sell capital equipment is being hit by three factors.

Firstly that we are in a recession, and that margins are being cut to the bone, and that customers are postponing any buying decision to a later date. With the stock market plunging again this morning, you cannot blame them for that, confidence has been, and is being shot to pieces.
Secondly, funders are being hit by rising bad debt, and are therefore using tougher underwriting guidelines, and thirdly, many leasing companies have simply left the market place, leaving a huge funding gap for leasing.

And now coming back to the weather forcast,the phrase R&D has changed its meaning,from research and development to recession and not depression. Wednesdays move by the government has meant in real terms that we will go into a recession, and not a depression. That is very good news.

The key is that in a recession, it is crucial not to let any sales opportunity slip through your fingers. Leasing only works as a sales aid if the supplier is receiving full support from its leasing partner, and it becoming apparent to us that many funders are simply cherry picking the deals. This is not sales aid leasing. We at Oak, have sources of funding that will give you the opportunity of acceptances that other leasing companies will simply reject. You cannot risk losing any sales in this present climate.

I hope that when I next write, the tone will be more uplifting, all I can say is make every sale count, and if you are not receiving a good acceptance rate from your leasing company, it would be wise to look for a new leasing partner.

http://www.oaklease.co.uk/ The UK's most popular leasing company website.

Woe Woe & Thrice Woe ?

2008-09-30T10:14:00.002+01:00

What a mess the financial world is in. But the journalists are missing the main point. They are all hammering on about the credit crunch, that is very much yesterdays news, the real problem is the confidence crunch.

Banking and finance works on confidence, firstly that the actual system is strong, and that the players or banks are also strong. The acute problem is that at the present, the banks do not have any confidence in each other. Can you blame them when the board will issue a statement saying they are financially sound, ( that in itself should be like an alarm bell) and 3- 4 days later, the same bank is being bailed out by their central bank or sold on to a competitor. It is not as if it is one or two banks that are suffering from this, it is becoming rare that somewhere in the global economy a bank has not failed!

The swagger of Wall Street has long gone, and I think it will take many many years before the rest of us will ever listen to what they are saying about their institutions. The undoubted position as number one has gone, and I think for good, or at least some very considerable time.

So what does the future hold, well I think it is out of the hands of the Central Banks now, it is down to something that money cannot buy....confidence. When it returns,the market will gradually recover, and with that so will the economies. In regard to leasing, many lessors have either closed off their books or are underwriting in such a way that only a very small percentage of business is being placed on their books. Business's will always have to acquire new equipment, and as the banks are very reluctant to lend through the traditional channels, leasing will grow, as it always does in a recession. To use the most popular leasing company website in the UK, simply go to www.oaklease.co.uk

What is a Name ?

2008-09-08T11:09:00.004+01:00

Until the last two to three weeks, Fannie Mae & Freddie Mac to most people in the UK could well have been cartoon characters. It is only now that we realise that they were the largest building societies in the world.

The credit crunch is here to stay for at least for all of next year. The reasons is quite simple, between them, Freddie & Fannie own or guarantee about £2.7 trillion worth of home loans - more than half the outstanding mortgages in the US. Almost every bank in the world has some sort of financial involement with them. So when they sneeze, we catch the flu.

The simple facts are that the UK banks are only lending what the savers are putting on deposit, as securitisation has almost dried up. Savers are under huge pressure,you only save surplus money, and as we all know, fuel is up, food prices are up, gas and electric are all rising, and there is inflation hitting everything else. With little money coming into the banks coffers, it is obvious that little money can be lent out to business. Coupled with banks on the receiving end of increasing bad debts, underwriters are now more cautious than ever.

So how does the future look? The only thing we can all do is work smarter, not harder. The internet is the growth area for all companies, or should be. By utilising a website and including a leasing web page is an easy way to help any business work smarter in the coming year. If you want any help on this simply click here

Times are a Changing!

2008-06-12T09:45:00.003+01:00

When Bob Dylan wrote that song over 40 years ago, it was aimed at the changing sixties, however it is very apt for the challanging times that we face at the present.

A few months ago, credit crunch could have been a new breakfast cereal for bankers in the city, now it is on the lips of everyone. Its effects have also hit everybody in the UK in some form or another.

Even though the US have been suffering from the effects of the credit crunch for longer than us, with banks and customers alike having horrendous problems, one very interesting fact has emerged. With the US ecomony in a recession, the amount of spending in stores and capital purchases like cars etc very low, one area has grown by 23.9% in the last quarter. The key fact is that this growth has not come from a low base. Internet and web based purchases have risen by this amount. People are now not just surf the web, but are actively chasing the best deals that they can, to make their money go further.

In the UK, we have started with some travel and insurance supermarket sites, but still have a long way to go. In a weeks time, we are launching oakleasedirect. This is in response to being asked by both suppliers and customers alike, for the best leasing deals in the market. This includes new starts and every kind of equipment. You simply type in either the rate you have been quoted, or the rental, and we will do the rest to give you a lower quote, and save you and your company money.

As the song said, times are a changing, and unless companies change and look to ways to save money, they will struggle to survive the coming months.

http://www.oaklease.co.uk/

The shrinking pie.

2008-05-09T12:52:00.003+01:00

Well, all the excitment of the local elections are over, some people are more happy than others !!

The economy is trundling along, inflation is about 4.5%, the government say it is about 2.5%, but they keep moving the goalposts, sorry wrong word, criteria; so much so that they are now playing on another pitch from the rest of us!

There is a great deal of uncertainity in the business world, some say it will get worse, others say it appears to be getting slightly better. The leasing world is in exactly the same boat, some funders moaning about increasing bad debts, whilst others are constantly chasing us on a daily basis for more business, so sales must be slow.

We now arrive at the shrinking pie, whatever market you are in, the pie is definately shrinking, now you have two options, cut back and hide under a stone and wait untill things get better; This will not work as in business, you know if you stand still, you are actually going backwards. The second option is to get a bigger slice of the pie, as some people will hide under a stone, it is your chance to grow as they are supposedly standing still, you can actively poach their customers.

When the economy is tight, you have to remain in close contact with all of your customers, that is why for our suppliers who use Oak Leasing for their funding, we help them by sending e shots out to our suppliers customers, telling them of their new offers or new equipment. We also provide them with expert advice on their website, and how to use our web solutions to attract more customers to them. So far from hiding under a stone, we see this as a huge opportunity for our dealers and suppliers to grow in market share, and have a bigger slice of the pie!!

Now who is for another slice !

www.oaklease.co.uk

Credit crunch over? I don't think so

2008-04-22T11:33:00.007+01:00

It seems that no matter what the Bank of England does, the market does the opposite. The slight problem with this big hand out to the banks is that it will not be passed on to their customers, i.e you and me.

It is very unlikely that the mortgage rate that we all pay will suddenly drop, far from it. It is also highly unlikely that the banks will joyously tell us that the credit crunch is over, and we can
all go back to where we were, living off debt. The more reasoned response is that the banks will shore up their badly hit balance sheets with these government bonds to repel any takeovers, and they will simply lick their wounds for a couple of years. Very little of the extra £50 billion will actually be passed on to normal customers. The banks have learnt a sharp lesson, they lent on very poor credit decisions, and this will reflect in their underwriting for some time to come.

Only yesterday, a leasing company announced that it was pulling out of financing certain leisure equipment. The reason I would guess is down to problems they have experienced. There will be other leasing companies that will follow this path over the next few months, in fact, a large leasing company has recently changed its underwriting policy greatly on new starts, and the rate on which they will now consider them.

The market is simply re-adjusting to the new market conditions, and will continue to do so for at least the next 6- 9 months. As with any change, you have to adapt quickly to survive, and that is what we all have to do for the rest of the year. I apologise for the slightly gloomy outlook, but reality is something we have to face.
www.oaklease.co.uk

Leasing, a silver lining

2008-04-11T12:54:00.006+01:00

For the past 3 months, the news is still the same, but another word is creeping in now, inflation to join credit crunch and recession. It is not just the UK that is in the mire, a small German bank has closed its doors , Weserbank shut up shop this week, due to a change its business model.

Business model, thats a good phrase to use, and I expect we will hear a great deal more of that particular phrase as the year progresses. It is when the tide goes out, and it's certainly ebbing quite fast, that you find that business models that looked good when times were OK, are suddenly on sinking sand. Companies that are too relient on banks for overdrafts and loans, and are highly geared, are coming under increasing pressure on two fronts, the increase in the price of credit and the reduction in available credit.

The very fact that on the day that the Bank Of England cuts base rate, some building societies and banks are actually put up theirs. It is no co-incidence that the institutions are repricing their loans. They are under pressure to recoup some of the losses that they have had to swallow, and also what they expect to have in the near future.

We now come to inflation, a word that had almost disapeared over the last 10-12 years. The Bank of Englands target rate of inflation is 2%, but with the increase in fuel, food and energy prices, inflation is back into the system. So as the song says, "its a long and winding road ", but where it will take us, I have no idea ! The only plus is that with leasing, it is a fixed cost through out the period, so it's a built in hedge against inflation; so at least with leasing, there is a silver lining.

http://www.oaklease.co.uk/

Is it all doom & gloom?

2008-03-20T11:30:00.002Z

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

2008-03-04T08:41:00.003Z

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.

Europe feels the chill, and the "I" word is back.

2008-02-15T11:34:00.004Z

I have just arrived back from seeing some customers in Europe, and it seems that they are in the same boat as us, i.e. one with a few leaks !!

In the German papers over the week, the German government has been forced to lead in a bail out to a small business bank, IKB, for the sum of €1.5 billion, in a third attempt to avoid insolvency. Other German banks such as West LB have also been hit by the sub prime crisis.

The "I" word is now being mentioned for the first time in ages. Inflation is in the Eurozone, and it seems that according to the Governor of the Bank of England, it is here as well and will rise well over the target of 2%. As inflation rises, I expect a marked slow down in UK growth. A sign of how hard the government think it will be is if they alter the planned tax increase on fuel in a few weeks time. If is stays the same, you know that we are in for a rough ride ahead.

With a tougher market , it is vital to maintain margins as much as possible. By utilising leasing not as a tool of last resort, but as the leading weapon to maintain margins will be crucial to most business in the next few months ahead.

Whatever equipment that you are selling, I think it is vital that you lead not with a cash price, but with a ballpark leasing figure. That is how companies survived and even grew in the last bleak times.

As always, if you need help, just go and visitus at Oak

New Month, New Opportunities

2008-02-04T10:56:00.000Z

Well we have started a new month, and gloomy January is now behind us, Thank God !

Reading the papers over the weekend, a number of stories took my eye. Firstly there was the story concerning a credit card company, that were cancelling some customers cards, for no better reason than they had a a credit review, and goalposts were now moving. Tough on their now former customers.

It made me remember that a lease agreement, once it has commenced cannot be withdrawn as long as the repayments are continued to be made.

The other story was that last year, over £53 billion was spent over the web by UK consumers. That is a huge amount of money. I think that this year will be critical for business to utilize the web for its full potential. You simply cannot ignore the huge potential that is out there.

Business's who do not show to customers what they can fully offer, are simply not doing themselves justice. You would not dream of not showing all of your products in the best light, so why do suppliers and manufacturers not have a leasing page on their website, to show that is available.

In this present financial climate, customers will simply assume that they cannot offer a lease solution, and go to someone that does. Oak has over 30 suppliers that use our links. If you need help, see our web leasing solutions .

Lets see what this month brings, I think that some of the gloom will move away as it always does in the Spring

Oak Lease Blog hits its target

2008-01-24T14:36:00.000Z

If you told me on Tuesday, that over 87 people would read our blog in two days, I would have said you must be joking !

Apparently that is true, so I must be doing something right for a change.

You know that something big is on the horizon when the Fed makes only its second large cut in 20 years, and Mervyn King, attending a CBI dinner is live on BBC 24 news. You normally only see a 30 second shot of him when rates are changing.

Speaking to a number of friends within the industry, ( after 30 years in the leasing market I have a few !!) they are of the same opinion that this year suppliers will find it tough, and underwriting will be harder.

But this is far from gloom. Everytime this has occured in the past, 1989-1990, 1979-1980, leasing has always grown. Why you ask? well the answer is very simple, with banks not lending as much, and with higher deposits, and guarantees, and fees etc, customers will gravitate to who ever the supplier recomends when selling the equipment. Whilst I would like you to always use Oak, there are others out in the market place !!

By leading with a rental figure, not only helps you overcome the cost objection, but will overcome bank interference, which always slows a deal down, and you can close the deal quicker.

So in the words of that well known song from Life of Brian,

always look on the bright side of life

Comments will be most welcome, so please feel free to add whatever you like.

2008-01-22T15:01:00.000Z

Well at long last , and after many people asking for an oak lease blog, here it is.

I thought January is always a good time to start something new, but to start on the first is a bit too organised.

I think that many people are now saying the "R" word instead of skirting around it. In the leasing world, it started back in August when a funder suddenly closed it doors to new business.

A year ago, people thought credit crunch was some new and expensive chocolate bar!! Well they are not wrong. The speed in which it has hit business's has alarmed people, but the signs were there over a year ago.

So how does all this affect leasing? , well funders will and have tightened up credit acceptances, and banks are being more careful in their lending. Thats enough info to start with, I will be back with more insights into the leasing world later on in the week