Interview with Al Levine, Madison Capital
“We have cut back our broker business, but not out. Historically, it was 20%-30% of our business. We want to be at that level. We are previewing more transactions and not wasting either ours or our broker’s time on weak full submissions that do not fit our footprint. Our borrowing is in tack, with fractionally higher rates. We have made our credit criteria a bit more defined and we are even more conscious of who are customers are, what they do, their history, etc. It is the same we did before, just more of it.” Did you have a credit you ranked as “stellar” go “supernova” by late 08? “Excellent credits that went south were industry related. A perfect example was a major national wood supplier with 75 years in business that simply ran out of clients. This was not logging related, but finished wood related for the housing industry. The customer never had an historic credit blip. The other thing that one could not predict was strong asset resale losses. For example, we the right brand concrete pump truck that cost about $300K that should have sold, at auction, for $200k, which brought $125k. And, we even had $50k down. The total down turn was the culprit and impossible to predict. There are just too many similar units for sale.” Are your days longer or shorter than before? “My days are about the same, but my work focus is different. However, long days have always been the norm. When business is good, one works hard and when bad, one works hard. In bad times, there has been a bit more stress on the collection side, but that is manageable and failing transactions or those needing restructuring is slowing. In good times, we work harder to process transactions. As an FYI, more good direct business is coming in and good margins are attainable. The vehicle portfolio, which performed ahead of budget last year and has normal defaults, is providing wonderful opportunities as the larger fleet lenders are focused elsewhere rather than on the small to midsized fleets.” What advice would you give to a graduating finance major looking for a job in May or June of 2009? “I would tell a graduating finance majors to move in with three friends, keep the overhead down, go to graduate school in some other field. I do not think there will be an abundance of jobs in finance. There are many unemployed good experienced people that can be hired that will help upgrade one's staff now. Madison is finding new good people that have lost their jobs. We are hiring as we simultaneously look to acquire another company that perhaps is a bit distressed. We feel 2009 will be flat, but this is a good time to work on your infrastructure, do your business plan, honker down, and wait for the turnaround.”
Allan is a member of the Leasing News Advisory Board. He began in leasing in 1971 when he went to work for a firm focused on vehicle and small-ticket equipment leasing. In 1974, Allan started Fox Auto & Truck Discount Leasing Company, which evolved, in the early 1980's, into Fox Discount Leasing, Inc. In 1987, he formed Fox Valley Leasing, which merged with Harbor Leasing to become Madison Capital in August of 1997. He has served on many boards and committees throughout the leasing industry, including: the local chapter of the NVLA (National Vehicle Leasing Association), the Equipment Leasing and Finance Association's committee for independent leasing companies (ILC) and its Future Council group, former director of the Eastern Association of Equipment Lessors, is past chair of The Gordon Center (a 550-seat boutique venue for the performing arts), and as past Chairman of the Board of an international not-for-profit serving over 5500 individuals with development disabilities and has 2300 employees. He was VP of The Jewish Community Center and on its board of directors for years. Recently Allan became a member of the Baltimore Zoo’s Board of Directors. It is the fourth largest Zoo in the US. He has also served on the board of many additional local philanthropic and community organizations. Allan is a graduate of the University of Maryland where he played lacrosse. Allan Levine, Chief Operating Officer Direct Line: 443.796.7337
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