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Amembal’s New Book Takes a Fresh Look at Leasing

Date: Oct 07, 2019 @ 05:00 AM
Filed Under: Industry Trends

Leasing — The Creative Financing Alternative,” the new book by Amembal & Halladay Chairman and CEO Sudhir P. Amembal, was released today (Oct. 7). Equipment Finance Advisor sat with Amembal to learn more about the book and what readers can expect to learn from it.

Amembal has authored or co-authored 17 books on leasing. He began his professional career in lease education, consulting and publications by co-founding the firm in 1978. In 2016, Amembal was also inducted into the Equipment Finance Hall of Fame by the Equipment Leasing and Finance Association (ELFA).

Equipment Finance Advisor: Your new book was just released — 13 years after your previous best-selling book, “Winning with Leasing!” What drove you to publish this new book this many years later?

Photo of Sudhir P. Amembal - Chairman & CEO - Amembal & Halladay

Sudhir P. Amembal: Mike, to begin with, allow me to express my gratitude to Equipment Finance Advisor for this interview. I am extremely proud to announce that Amembal & Halladay will be releasing two new publications today (Oct. 7): “Leasing — The Creative Financing Alternative,” authored by me; and “Accounting for Leases — Embracing the New Paradigm,” authored by my dear friend and business partner, Shawn Halladay.

I am sure there are many questions you will be asking me; but, I would like to give you heads up that the answer to the first question is likely to be the longest!

I believe there are two parts to your question: The first part is what drove me to publish “Leasing — The Creative Financing Alternative;” the second part is why so many years after my last publication, “Winning with Leasing!

There is a multiplicity of reasons as to why I devoted a period spanning 15 months to write “Leasing — The Creative Financing Alternative.” In no particular order:

(a) As pervasive as the Internet is, it is generally not cohesive; my book is. By the way, Collins, the dictionary, defines “cohesive” as consisting of parts that fit well together.

(b) I wanted to write a book where each chapter is an A-Z on its subject matter. Take funding as an example. There truly is not one piece of literature anywhere in the world that details varied aspects of funding a leasing company — items such as the objectives of funding; the approaches to funding; the intricate relationship between funding and pricing; and, the 15 different ways a leasing company can procure funding. One of the 10 chapters in the book does this. Allow me another example — the chapter on Vendor Leasing comprehensively addresses the following items: vendor motivations to lease; types of vendor leasing programs; benefits to the vendor, the lessor, and the lessee; selecting the right vendor; responsibilities of the parties; elements of the agreement; and, program risks.

(c) The book was written to serve as a reference guide for lessors to enable them to add value in the marketplace. It contains dozens of implementable ideas.

(d) The two most common means to gain knowledge are through training and through reading. Another reason why the book was written has to do with the cost-benefit angle impacting training. As an example, a leasing company could purchase 10 copies of the publication whereby the total cost to provide substantial knowledge to 10 of its staff would be far less than what the total cost would be to send just one of them to a public seminar outside of the city where the lessor is domiciled.

(e) As this is likely to be my last significant contribution to the industry, I wanted to write a book that truly provides guidance to lessors on increasing business volume and profitability.
(f) Lastly, and, perhaps, most importantly, over the past 40-plus years I have served this industry, my passion has been, and continues to be, to teach and to write. Hence this book!

The second part of your question is why did I wait this many years — 13 to be precise, before writing another book — the firm’s 17th publication.

Here, the answer is simple. I have been extremely active providing lease training and consultancy services throughout the world over that last four decades. The last 13 years have not been any different. After having served the industry for 40 years, I have slowed down, albeit just a tad. This provided me with the opportunity, a window of time, to author this book.

Equipment Finance Advisor: As highly respected trainer in the field of equipment leasing for 40 years, what have you found to be the most interesting changes in the methodologies utilized in training professionals over the past 10 years?

Amembal: Leasing is an extension of finance, substantially influenced by three diverse disciplines: accounting, law and taxation. In addition, there are numerous nuances in jargon and practices. All of this suggests that it takes a fair amount of learning to fully understand the complexities involved in leasing.

I am not privy to the training budgets that varied leasing companies have; but, based on inference, I believe that the budgets are on the low side. Live training has essentially been substituted with other means to include webinars, video conferencing and self-study courses. Unquestionably, this reduces travel costs. Yet, as traditional as this may sound, I very strongly believe that the most effective approach to garnering knowledge is through live training sessions. I can say this with certainty based on what I have personally witnessed in having trained thousands of leasing professionals throughout the world.

Equipment Finance Advisor: What would you say is the most common issue equipment finance companies are dealing with today?

Amembal: As you so well know, different types of lessors face different issues. Small and medium-sized independents, as an example, are continually challenged to diversify their funding sources; captives are challenged in transitioning to managed services; and bank lessors — perhaps more than others — are faced with the challenge of an inverted yield curve.

Also, lessors in mature markets face different challenges than lessors in emerging markets. Having said this, some of the common challenges across the board include economic uncertainty; political uncertainty, which translates into tax and regulatory uncertainties; and bracing for the slowdown in investment in plant and machinery.

But you asked what is the most common issue or challenge faced by equipment leasing and finance companies. In my opinion, it has to do with margin compression. U.S. statistics have shown that pre-tax spreads have steadily declined over the past several years. This is indeed alarming. Margin compression, sadly, is not just a U.S. issue; it is a global phenomenon. Using China as the case in point, spreads have drastically decreased over the past two years. In general, even though U.S. statistics are not bifurcated to show spreads for the two main types of leases, spreads have been on the decline on full payout finance leases. FMV leases, on the other hand, have sufficient bells and whistles which continue to enhance lessor profitability.

One needs to examine why spreads have been on the decline. There are a number of reasons, with varying degrees of impact. These include: increased competition; product homogeneity; and a market that is largely rate driven. An article last year in the Monitor quoted one key lessor, Tony Golobic, as follows: “Our competition continues to focus on price. It does not take any effort to lower one's rates. Last year was a continuation in this regard. Unfortunately, when one starts, everyone else follows.”

If spreads continue to erode, particularly in a situation where business volumes stay flat, gearing ratios stay constant and expenses of business do not decrease, companies will face deteriorating returns on equity. This will not bode well for our industry.

Equipment Finance Advisor: What advice do you give to those who are seeking to truly differentiate themselves from their competitors?

Amembal: Business differentiation is key for it serves as the mechanism to outsmart competition. To boot, strategies embracing business differentiation also increase profitability. The continued advice I give to lessors is one most of them realize they should implement; but, many simply do not take the time and make the effort to do so! The strategies include: adding value; mastering the art of countering common objections to leasing; possessing the ideal attributes that customers would like lessors to possess; embracing product differentiation; exploiting niche markets; considering product diversification; moving toward product innovation; and, most importantly, exercising pricing discipline.
With respect to these strategies, lessors need to choose which ones to implement. Nonetheless, there is no reason why all lessors cannot:

  • add value (so many ways to do this!);
  • possess ideal attributes (simply make a list of what customers are seeking in the marketplace and then assure that the attributes are delivered);
  • counter commonly encountered objections to leasing with sound logic (meet with the sales team, have them list all the objections encountered, arrive at counters to each of these and arm all sales personnel with the list of counters); and
  • embrace strict pricing discipline (never sell rate and arrive at a pricing policy which establishes a written floor below which approval should be sought from the executive committee).

All of these items are covered in great detail in one of the chapters entitled, “The Significance of Business Differentiation.” In a highly competitive marketplace, embracing business differentiation is not a choice!

Once again, I appreciate this opportunity to discuss my latest publication. Any of your readers who may be interested in finding out more about our two publications, released today (Oct. 7), should visit

Mike Dickinson
Editor | Equipment Finance Advisor
Mike Dickinson is Editor of Equipment Finance Advisor. Dickinson has more than 30 years of experience as an Editor and Reporter. He spent 20-plus years at the Rochester Business Journal in Rochester, NY, including 18 years as Managing Editor. He also covered Eastman Kodak, technology, optics and telecommunications, among other areas. His writing and reporting on Eastman Kodak won 1st Place – 2012 National Newspaper Association Best Business Story and the Gold Award – 2012 Alliance of Area Business Publishers for Breaking-news coverage. He also won the Silver Award – 2001 Alliance of Area Business Publishers Best Coverage of Local Breaking News – Global Crossing. Prior to working in the business news arena, Dickinson was a reporter for the daily newspapers in Syracuse, NY, and Batavia, NY. Dickinson holds a Bachelor’s Degree in Mass Communications/Journalism from St. Bonaventure University.
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