Monday, June 14, 2010
Archives, June 14, 2002 Frechette
Archives, June 14, 2002 Key Equipment Finance
Names Paul W. Frechette, Senior Vice President
SUPERIOR, CO, -- Key Equipment Finance, one of the nations largest bank-affiliated equipment financing companies, announced that Paul W. Frechette has been named senior vice president, global business development and strategic planning. Frechette will lead the organization's merger and acquisition activities and help guide strategic planning processes and new program development. His office is located at Key Equipment Finance's world headquarters outside Boulder, Colorado.
"Paul Frechette is well known throughout the global equipment leasing industry and is highly respected by his clients," said Paul A. Larkins, president and chief executive officer, Key Equipment Finance. "His desire to come to Key Equipment Finance says a lot about our ability to attract the best talent and speaks well for our future business prospects."
Frechette comes to Key Equipment Finance with 29 years of equipment finance experience. Prior to joining Key, he was senior vice president and managing director, GVF Business Development, for Heller Financial, Inc. (acquired by GE Capital in 2001) in San Francisco, California. Paul's career includes past executive assignments with U.S. Bancorp Leasing and Financial., U.S. Leasing International and Fleet Credit Corporation.
Frechette earned his bachelor of science degree in marketing management from the University of Rhode Island at South Kingstown. He is a member of the ELA (Equipment Leasing Association) Vendor Programs Business Council Steering Committee and chaired the ELA's Captive and Vendor Leasing Conference in Florida this past spring.
(Today Paul Frechette is Executive Vice President Business Development and M&A at Tygris Commercial Finance)
(Today Paul A. Larkins is President and CEO at SquareTwo Financial)
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Funding—Today the Major Problem
Marketing was the greatest burden for most of the past thirty years but now funding has become the major problem. I have taken a survey the past few weeks to determine what problems small leasing companies and packagers have to get their transactions funded. I have heard lots of grief and pain.
It appears that there is good business out there but the days of easy money are long gone. Better credits are required and “complete” packaging is required. The days when you submitted limited information and expected the funding source to d all the work is also gone. When I spoke to some funding banks that have closed their doors to leasing I discovered a dislike of sloppy documentation and questionable tactics. The banks are under the watchful eye of their regulators and many feel they have to be squeaky clean on credits and procedures.
I did not find reluctance, at some smaller banks, to look at lease transactions but I did find a concern for 100% financing. The uncertain accounting environment for leases did not seem to bother them because they did not see any major changes for them from their point of view. However they are more reluctant to allow the Lessor to do the servicing. The regulators are questioning the control of the money and are requesting the banks to make sure that they are receiving the cash prior to the information of the payment receipt reaching the leasing servicing agent. Less likely for discrepancies if the “cash” is controlled by the bank so they prefer a lock box arrangement.
The problem I discovered in many of the new banks that I spoke to was a general lack of knowledge of leasing. Clearly they prefer commercial loans and only wish to fund transactions that that the lease transaction as collateral for a loan. This as I explained would limit the number of transactions a Lessor could do unless a limited recourse arrangement could be created. This highlighted the crux of the problem for Lessor’s looking for non-recourse funding. How to arrange funding on a lease, from a loan perspective, on a non-recourse basis, to a funding source that knows little or nothing about leasing. When I ask the banks if they would be interested in learning about leasing they said yes but they do not trust what they called self serving Lessor’s. They would prefer the information come through the various banking trade associations.
It is a viscous circle because the banking trade associations do not see the need to offer education on leasing because they have no requests for it from their members. I know because I have tried to convince them. I think the best shot is for “informed” (that means that you know the rules) lessor’s contact the “state” associations and press them to let you offer a seminar on ways to fund leases and do it for “free”. Banks love free seminars and then work on the attendees for funding opportunities.
If you are contacting a new funding source leave then information on leasing not on you. The more they learn about commercial equipment leasing the better chance you have to develop a new funding source.
Also provide them with the many ways to fund a lease from discounting to assignments. Many funding sources do not know the different methods of funding a lease.
Last but not least is their reluctance of funding sources to fund residuals. They see residuals as a “pure risk”. So I would suggest only starting with payment discounting and/or loans with leases as collateral for the first year or so until the confidence in leasing grows before moving into more complex transactions with residual risk. That is not to say you could not invest in the residual yourself or offer purchase options but do not take a residual.
Many small banks that I contacted, that use to fund leases, said one of the reasons they got out of leasing was the leasing companies where no where to be found when problems developed on their leases. The best thing to retain good funding sources is to recognize your responsibility to stand by the transaction, recourse or not, until it reaches termination. The more you support the funding source on the deals you have with them the more they will want to do business with you. Failure to do so closes the door on future deals.
Funding will come back but it will take a lot of effort on the part of lessor’s to educate more funding sources that we are not just opportunists but are in it for the long haul.
Mr. Terry Winders, CLP, has been a teacher, consultant, expert witness for the leasing industry for thirty years and can be reached at email@example.com or 502-327-8666.
He invites your questions and queries.
Previous #102 Columns:
(This ad is a “trade” for the writing of this column. Opinions
Bank Beat—Washington State based "Asian Bank"
The four branches of Washington First International Bank, Seattle, Washington, was closed Friday with East West Bank, Pasadena, California, owner of the largest U.S. bank serving the Chinese-American market, to assume all of the deposits.
According to the Northwest Asian Weekly, "Unmentioned in the report is the fact that WFIB is a community bank and for many Asian and Pacific Islander (API) immigrants, it’s been a place where they can realize their dreams of owning a home in the United States.
“[We are] recognized as the premiere bank for new Asian immigrants and investors,” Huang said.
Like many other banks, Huang has found that the minor pitfalls of Washington First are tied to the construction and real estate industry, the Northwest Asian Weekly reported.
“Most Chinese American banks focus on real estate lending. During this economic downturn, banks with real estate concentration (like WFIB) get hurt the most,” she said. “It is because of the high foreclosure rates, lack of buying, and lack of financing available.”
The FDIC and East West Bank entered into a loss-share transaction on $418.8 million of Washington First International Bank's assets.
East West Bank is headquarters in the Philippines and in 2009 purchased the assets of United Commercial Bank in Los Angeles. The US bank headquarters is in Pasadena, California, and now gives the bank 75 branches n northern and southern California, Georgia, Massachusetts, New York, Texas, Washington.
East West has over 130 locations worldwide. In Greater China, East West's presence includes a full service branch in Hong Kong and representative offices in Beijing, Shanghai, Shenzhen and Taipei. Through a wholly-owned subsidiary bank, East West's presence in Greater China also includes full service branches in Shanghai and Shantou and representative offices in Beijing and Guangzhou.
East West now has six branches in the Puget Sound area, making it the largest Asian-American bank in Washington.
Washington First International Bank had 70 full time employees servicing two branches in Seattle and one each in Bellevue and Federal Way. Founded May 15, 1990 bank equity dropped from $51.1 million March 31, 2009 to $10.2 million March 31, 2010 with $69.2 non-current loans, working they way down from $119.4 million non-current loans March 31, 2009. The bank had lost $9.9 million the previous period and $4.7 million the current period. Charge offs were $1.7 million ($1.5 million construction and land development, $187,000 1-4 multi-family residential properties.) Tier 1 risk-based capital ratio 2.09%.
As of March 31, 2010, Washington First International Bank had approximately $520.9 million in total assets and $441.4 million in total deposits. East West Bank will pay the FDIC a premium of 0.5 percent to assume all of the deposits of Washington First International Bank. In addition to assuming all of the deposits of the failed bank, East West Bank agreed to purchase approximately $501.0 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $158.4 million.
List of Bank Failures
(This is a free “ad” for our good friends the Bateman’s,
Top Stories --- June 7-11
Here are the top ten stories opened by readers:
(1) What will happen to Puget Sound Leasing---
(2) Rudy Trebels, CLP, & Friends on LinkedIn
(3) Lease Corporation of America Joins
(4) Clarifications---Mar Vista Financial
(5) Sales makes it Happen—by Kit Menkin
(6) Corrections--- Rudy Trebels & LinkedIn---
(7) Direct Capital Slashes Finance Time w/E-Signatures
(8) Madoff says he holds little sympathy for his victims
(9) Same Day Funding with American Lease Insurance
(10) Conversation with Jamie Chisick, Mar Vista
((click on ad to learn more))
Super "Broker/Lessor" List
( for funders specializing in “Story Credits, “ please click here
There is no advertising fee or charge for a listing. They are “free.” Leasing News makes no endorsement of any of the companies listed, except they have qualified to be on this specific list.
Leasing Associations: All non-profit leasing associations are abbreviated. To see the full name and learn more about the association, please click here.
Business Reports: Companies listed may make any netiquette comment about their company or reports or other information in the footnote section of their listing. Leasing News recommends readers also view the footnote as well as the section itself or searching reports on the business.
BBB - Better Business Report | CBB - Leasing News Complaint Bulletin Board
A -Requires Broker be Licensed | B -Sub-Broker Program | C -Warehouse Line | D -Also a Funder
N/R (not reported)
N/R (not reported)
(A) BSB Leasing, Inc has been providing syndication services for brokers nationwide since 1982 and have been funding business directly since 2002 through BSB Direct Finance, LLC. We offer Brokers a complete internet solution for credit submission and tracking and document preparation.
BSB will fund up to $75,000 App Only on our direct line under BSB Direct Finance, LLC and we now offer App Only up to $100,000 through BSB Syndication (our house syndication group.
Broker Qualify - Please Call or see application on-line at bsbleasing.com
(B) Affiliated Investment Group, Inc. is the proud continuation of over 20 years of serving the broker community. We are a balance sheet, cash flow, credit lender. The primary question on every transaction is "what is the likelihood of being paid back". Our motto is "any equipment, for any Lessee, anywhere in the country". Also known as "The Flexible Funding Source" as we look at a deal with the philosophy of "what's right" about it "how can we make it work".
We have significant sources of funds from A to B credits.
On the commercial side, Quail Capital specializes in mid market to large structured and complex transactions. Mohammed Ahsan began his days at Westinghouse Credit (then Atlantic Financial, Mitsubishi Bank, Bank of California and First Sierra) as a funder. He has been in the leasing industry for 29 years. His partner Jeff Rudin has over 29 years leasing experience.
In addition to the equipment leasing, Quail Capital is also involved in Asset Based Lending, Franchise Financing, Acquisition Finance, Sale- Lease Back- Working Capital and facilitate the SBA program.
Broker Qualifying- please call.
(D) LPI-HC specializes in working Capital Loans / Equipment Financing for new and established medical professionals with our target market being dentists, medical doctors, veterinarians and physical therapists. We also offer any type of Medical Practice Refinancing for established medical professionals that want to consolidate all their practice debts and improve their cash flow position. "We have the financial solutions to help start and grow a practice with repayment programs designed for medical professionals to manage their money."
These companies basically function as a "broker," meaning most of their transactions are sent to other leasing companies or funders. The great majority of their transactions are on a “non-recourse” basis. They may have a “warehouse” line for “housing” a lease transaction or making payments in advance, or building a portfolio to sell, and they also may “keep” leases for their own “in house” portfolio. They are classified as a “Super Broker” because the great majority do not directly “service” accounts, but “sell” the transaction to another. Their intention it not to act as a “funder,” although they may present themselves as one, but to “sell” to another.
An additional description: the majority of their business comes from others, who are acting as a “broker.” These “deals” may come from an independent, a “company,” or even a “lessor” or “funder.”
Most are very experienced in the leasing industry and well-known.
In relation to the rest of the industry categories, this is the smallest. You will only find the “elite” listed here. To date, Leasing News has turned down eight who have requested to be listed due to not having a “satisfactory” Better Business Bureau report (this does not include those listed on the Leasing News Bulletin Board Complaint who have not applied to date.)
It is Leasing News experience that most “advance rentals” or “deposits” have been kept primarily by those acting as “super brokers,” particularly with “tougher” credits or equipment situations.
Their source of business is varied, meaning both new and experienced brokers will come to them because they may not have the "volume" for the source the "super broker" may have; they may be have sufficent years in the leasing business to qualify for many sources: they may be looking for a better rate than their regular sources, or the transaction was originated by another broker and they need to acknowledge that the transaction comes from another broker, called "sub broker," in the trade (most funders will not accept business from that has been “re-brokered.” .” As important, the sender may not have a regular source for the specific transaction they want to place, such as a young privately held company wanted the lease as “corporate only.” Both parties also realize the sender may “go direct” or grow to that point or utilize the “Super Broker” as a consultant for new sources.
Most important, the transactions may come from a lessor that wants to satisfy their client, and they have a "minimum" that the transaction does not meet; or perhaps their client is to the maximum amount of exposure for them.
For whatever reason, they come to a "super broker" to place the deal on their behalf.
In the question of sub-broker business, we take for granted that the “super broker” not only has a written agreement with the sub-broker but informs the lessor when submitting an application it has come from a sub-broker. A violation of this will have the company removed from the list.
In addition to the above qualifications, the "Super Broker" must have a "clean" Better Business Bureau rating, no Leasing News Bulletin Board complaints or a poor record, and must belong to a national leasing association, as we view this that they are professional and abide by their association standards and code of ethics.
We also will be verifying warehouse lines or "lessor" lines with their bankers (as done with those on the Story Credit List.)
Leasing News reserves the right not to list any company it believes does not meet the qualifications as stated above.
San Juan Capistrano, California--Adopt-a-Dog
"Taylor Dane is a 4 year old Mastiff mix. She has a wonderful personality, gets along well with other dogs and, oh yeah, has lots and lots of love to give."
The Ark of San Juan
Dog Adoption Application:
First, you will need to fill out an Adoption Application. Once we receive your application we will review it, along with other submitted applications. We will make a decision based on the needs of the animal and the potential for their forever home to provide those needs.
We will then notify you to discuss any special needs or requirements. Someone from our Animal Welfare Committee will schedule a home check. Last, we will then have you fill out an Adoption Contract and pay the adoption fee of $150 for animals over 4 months. The adoption fee for Puppies and Kittens is $200.
In an effort to help the animal to be successful in their new forever home The Ark of San Juan's Behaviorist will assist with acclimating and/or any behavior concerns. We take these extra steps to ensure the animal you’re selecting is the right fit for you as well as the animal.
Adopt-a-Pet by Leasing Co. State/City
Adopt a Pet
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Today in History
National Flag Day
According to the encyclopedia of American Facts and Dates, the somewhat obscure and uncertain history of the American Flag began during 1775-1777. In October, 1775, when Congress created the first naval force, it also set down rules for creation of a flag. The result, variously called Congress Colors, the Grand Union Flag, or the First Navy Ensign, was a flag of 13 alternating red and white stripes, with a field of blue bearing the crosses of St. George and St. Andrew. This flag is believed to be the one raised by Lt. John Paul Jones aboard Commodore Esek Hopkin's flagship Alfred on the Delaware River at Philadelphia on December 3, 1775.
The first land raising of the Grand Union Flag occurred at Prospect Hill in Sommerville, Mass. on December 3, 1776, during the American siege of Boston.
By the way, “the first flag commissioned for the navy was simply the basic British Union flag divided by white stripes.
Our second flag, the Stars and Strips, substituted stars for the cross in the corner square. The red, white, and blue colors were derivative.” (Henchman, “Legends, Lies & Cherished Myths of American History (1988)
The most popular flag during the American Revolution:
This Day in American History
1775- the Continental Congress established the army as the first US Military service.
NBA Finals Champions This Date
1987--- Los Angeles Lakers
Stanley Cup Champions This Date
1994 New York Rangers
Love of the Game
by David Michael Chambers
Crack of the bat
From the pitcher's stance
The ball flies high
The outfielder runs hard
The batter then swings
Clearing that outfield fence
A pop the batter does hear
On his way to the dugout
The object is to insert the numbers in the boxes to satisfy only one condition: each row, column and 3x3 box must contain the digits 1 through 9 exactly once. What could be simpler?
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