Ray Ellingsen is Vice President of Syndication and Operations, Corcentric. He has more than 25 years of experience in the syndication, equipment lease finance and commercial banking industry. At Corcentric he is responsible for growing and maintaining national funding source relationships with complementary valued-added financial institutions and equipment finance organizations, as well as developing customized, customer-focused, life-cycle fleet management financing programs.
Ray Ellingsen, Vice President of Syndication and Operations at Corcentric, details steps to take in the transformation from paper mess to paperless amid a rapidly digitalizing, post-COVID-19 environment.
Everyone in the heavily regulated syndicated equipment funding arena knows that each funding transaction requires signatures on more than 25 documents. While that has always been cumbersome, the restriction of public gatherings during the COVID-19 pandemic with its work-from-home mandates made many of us realize just how cumbersome it was with the back-and-forth mailing or overnighting of the critical, time-sensitive documents needed to complete a lease transaction.
A good first step is eSignature technology, which is often compared to an electronic fingerprint. A digital signature securely associates a corporate authorized officer with the document they signed. An eSignature is considered authenticated and validated if it follows the predetermined document review, electronic signing and sequential tamperproof audit system process requirements.
Electronic signatures within the collateralized leasing/lending are being used by certain industries and allow equipment lessees to electronically execute lease finance documents anywhere and at any time. This is especially helpful given that many lease contracts are signed at the end of the calendar year, and e-signature technology makes it possible for customers to easily complete the transactions during holidays and vacations.
Electronic signature technology can be delivered as a web-based application, mobile application, or embedded application. This saves both time and money by providing immediate access to not only the document, but also the equipment.
Many e-Signature solutions have multiple authentication methods including the use of an email security code, OFAC (Office of Foreign Assets Control) lookup, a PIN delivered via SMS text and knowledge-based authentication using challenges questions.
However, e-Signature technology is only one step in digitizing the lease finance process. The next step is an eVault. Basically, an eVault is an electronic storage system using both computer hardware and software to store electronic lease contract chattel paper and syndication funding lease documentation related to a transaction. The eVault technology permanently binds e-Signatures to a document, creating tamper-proof seals which demonstrates all the necessary legal signature authorities and collateral authentication for all documents places in the eVault.
The eVault ensures that digital loans are created, stored, and assigned in such a way that they comply with all industry and legal standards throughout the term of the lease. The purpose of an eVault is to allow frictionless, secure, and trusted transactions in order to enable speed and market funding efficiency.
One of the most significant benefits of the electronic documentation process is that it gives the end-user customer immediate access to their equipment, allowing them to use their equipment a few days sooner than they would be able to with traditional processes. For the lessor and lessee alike, the savings are in both time and money.
Document digitization is happening across a wide range of industries. Given the paper intensity of the lease finance process, it makes sense to move toward eSignature and eVault technology as a way to modernize and streamline the process while keeping in compliance with all regulations.
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