One Flashcards
(8 cards)
1
Q
What are the sources of finance? (some more relevant for independents, captive or bank owned)
A
- Owners Equity Capital
- Bank loans
- Owners directors loans
- Capital from partial sale of company
- Block discounting loans
- Sale of customer finance agreements
- Sales of assets and receivable
- Back to Back
- Agency arrangement with head lessor
- British Business Bank , Enable Fund
BS CBA BOOBS
2
Q
Advantages of direct?
DIRC
A
- Database of customers
- Lessor controls the relationship
- Reduced risk of fraud
- Strategic changes easy to implement
3
Q
Disadvantages of direct?
A
- Expensive running costs
- Competitive market, often leads to conceding on rate compared to indirect
Run Cowboy
4
Q
Advantages of captive or independent?
A
- Improved sales as one stop shop
- Higher conversion rate
- Higher margins
- Maintenance and servicing can be easily wrapped in
- Customer retention at the end of the lease as they are encouraged to early upgrade
- Shorter decision cycle as no negotiation with 3rd party
- Sales promotions during difficult times - 0% or low interest to boost sales
- Asset knowledge
CHHIASMS
5
Q
Disadvantage with Captive or independent?
Railcar RPM
A
- Additional resources needed for new business levels
- Loss of customer relationship for the funder
- Increased regulatory requirements for intermediary deals (FCA/FLA)
- Portfolio mix
- Residual risk
- Increased pressure to accept riskier deals
- Increased risk of fraud
- Increased risk of non-payment if there are 3rd party issues
- Asset risk due to low collateral value
- Change of ownership and relationship is lost
6
Q
What are the types of risk?
A
- Currency risk
- Credit risk
- Reputation & Residual risk/ Settlement
- Interest Risk
- Legal and Compliance risks
- Operational/Strategic Risk
Can Carrots Really Involve Little Oranges
7
Q
What are the due diligence checks?
A
- Checking approved/declined supplier database
- Review supplier company searches and bank searches
- Checking supplier invoice wording and supply term
- Verifying asset pricing compared to trading guide
- Verifying consumer credit licences
- Completing HPI checks
- Checking supplier stocking finance has been paid
- Seeking visual asset inspection (checking serial numbers)
8
Q
Sources of public information for a company to check?
7 points
A
- Electoral Roll
- CRA
- County Court Judgments
- Credit Account Information Sharing (CAIS)
- Credit Information Fraud Avoidance System (CIFAS)
- Companies House
- London and Belfast Gazette (insolvency)
