Wednesday, November 2, 2011
######## surrounding the article denotes it is a “press release”
and was not written by Leasing News nor information verified, but from the source noted. When an article is signed by the writer, it is considered a “by line.” It reflects the opinion and research of the writer. It is considered “bias” as it is the writer’s viewpoint.
LEAF Commercial Takes Over
As in the announcement of Crit DeMent as Chairman of the Equipment Leasing and Finance Association as CEO of LEAF Commercial, and no mention of LEAF Financial in the press release, it appears LEAF Commercial is the succeeding company as the announcement of securitizations of "approximately $105 million of leases, term funded by the issuance of Contract Backed Notes. The transaction is the first securitization of small ticket equipment loans and leases sponsored by LEAF Commercial Capital, Inc. The loans and leases were originated by LEAF and are backed by various equipment including office equipment such as copiers, as well as, technology, telecommunications and industrial equipment. Guggenheim Securities, LLC, was the arranger of the notes and LEAF will continue to be the servicer of the assets."
It should be noted the on going copier division in Moberly, Missouri based LEAF Dealer Solutions unit, during the third fiscal quarter ended June 30, 2011, added 104 new dealers as active users, according to the June 30, 2011 Resource America, Inc. filings.
Reportedly Chris Casey, long time vice-president of operations, is no longer with the company.
LEAF Financial remains on the list of companies who have had complaints and appear not to notify all lessees regarding the termination of their lease or equipment finance agreements.
Guggenheim Partners is a privately held global financial services, so no numbers are available; however, the Resource America, Inc., September, 2011 Calendar year-end should have numbers regarding both LEAF Commercial and LEAF Financial. Don't expect
this until December because Resource Amercia year -end 2010 was filed December 13, 2010,
so numbers will not be available most likely until the middle of December.
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Continuing Good News about Credit Business
As both the Equipment Leasing and Finance Association MLFI-25 and Equipment Leasing and Finance Foundation Confidence Report showed September business increases as well as confidence continuing, the October National Association of Credit Management Index saw a rise, although slight, from 52.7 to 53.7 on their index.
The report stated, "The majority of economic indicators has been reasonably positive over the past few weeks and seems to be pointing to better months to come and the CMI index did not dispel this assumption, although the slower pace of progress reminds those paying attention that this is unlikely to be a rapid recovery for any but a handful of sectors.
“Most of the decline took place in the favorable factors suggesting that growth is not yet ready to surge, but the fact remains that adjustments were relatively minor and remain above the trend from earlier this summer,” said Chris Kuehl, PhD, economist for the National Association of Credit Management (NACM).
"Most of the positive news stemmed from the changes in unfavorable factors. These upward shifts suggest that companies are having more success getting finances in order than was the case earlier in the year. The gains in the index are starting to point to a general recovery.
"Overall, unfavorable factors showed improvement. There were fewer accounts placed for collection, fewer disputes and fewer dollars beyond terms. There were also fewer bankruptcies.
"It has been observed that the manufacturing sector is still working itself out. Those companies operating in fast-growing sectors like energy and health care are doing very well and expanding. The auto sector is undergoing a recovery as well. In contrast, there are the companies connected to the construction sector, a still highly stressed part of the economy no matter what category one examines. Residential housing is not performing well at all, but neither is commercial construction. Even the public sector activity has been in decline as the arguments over what to do with infrastructure projects continue.
NACM, headquartered in Columbia, Maryland, supports more than 15,000 business credit and financial professionals worldwide with premier industry services, tools and information. NACM and its network of affiliated associations are the leading resource for credit and financial management information, education, products and services designed to improve the management of business credit and accounts receivable. NACM’s collective voice has influenced federal legislative policy results concerning commercial business and trade credit to our nation’s policy makers for more than 100 years, and continues to play an active part in legislative issues pertaining to business credit and corporate bankruptcy. Its annual Credit Congress is the largest gathering of credit professionals in the world.
October NACM Full Report:
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First American Equipment Finance Goes Against the Trend
William “Bill” Verhelle, CEO, First American Equipment Finance, past president of the Equipment Leasing and Finance Association, goes against the trend to build his company's business. He has been consolidating his offices to his Fairport, New York office, and in addition, a plan to add more employees with his company’s approach that has been bringing them success.
"It is a model centralized effort," he told Leasing News. "We have direct access to a virtual marketplace with Cisco's Digital Signage system in all our offices, as well as Cisco's Show and Share video training system (to complement and expand the capabilities of our existing Tandberg HD videoconferencing systems)
"In the past, most have followed branch banking, opening an office, expensing representatives to expand business to the office. This then moved to representatives working out of their homes, as if it were a branch office.
“We have taken a different approach, selecting who we want to do business with, profiling, specifically working with them, using state-of-the-art equipment and software, thus lowering our costs and passing this on to our customers. This creates more business for us, increasing not only our performance, but our portfolio quality."
First American Equipment Finance has completed its move to a 33,000 square foot facility, which Verhelle calls a "state-of-the-art" office. He is expected to hire at least twenty more employees to fulfill the company’s goal.
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Sales makes it Happen---by Mr. Terry Winders, CLP
The end of 2011 is 59 days from now, a great opportunity to sell more “capital leases.” This means with a $1.00 out or nominal purchase option where the transaction allows the lessee to receive the depreciation.
Meaning you take one month as a deposit, start the lease this year, with the next payment whatever program you have to start---a month, two months, three months, or even bi-annual payments, if you have such a program. The debtor is entitled to deduct all the depreciation in the transaction (not exceeding the dollar amount available) for this year.
Most likely your leasing prospect has not utilized all the depreciation he can take this year. If they have, they then can start a depreciation schedule for the last six months of the year.
First, the equipment has to be in place and accepted in 2010.
Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if the customer buys (or leases with a bargain purchase option) a piece of qualifying equipment, they can deduct the full purchase price from their gross income. It's an incentive created by the U.S. Government to encourage businesses to buy equipment and invest in themselves.
When your business buys certain items of equipment, it typically gets to write them off a little at a time through depreciation. In other words, the company spends $50,000 on a machine, it gets to write off (if it is a five year asset under MACRS) a percentage of the cost each year. Now, while it's true that this is better than no write off at all, most business owners would really prefer to write off the entire equipment purchase price for the year they buy it.
In fact, if a business could write off the entire amount, they might add more equipment this year instead of waiting. That's the whole purpose behind Section 179… to motivate the American economy (and business) to move in a positive direction. For most small businesses (adding total equipment, software, and vehicles totaling less than $500,000 in 2011), the entire cost can be written-off on the 2011 tax return. For large businesses adding even more than $500,000, the write-offs are just as substantial.
All businesses that purchase, finance, and/or lease less than $2 million in new or used business equipment during tax year 2011 should qualify for the Section 179 Deduction. If a business is unprofitable in 2011, and has no taxable income to use the deduction, that business can elect to use 100% Bonus Depreciation and carry-forward to a year when the business is profitable. Most tangible goods including “off the shelf” software as well as business use vehicles (restrictions apply) qualify for the Section 179 Deduction.
The deduction begins to phase out if more than $2 million of equipment is purchased - in fact, the deduction decreases on a dollar for dollar scale after that, making Section 179 a deduction specifically for small and medium-sized businesses. However, as noted above, large businesses can expense all qualifying capital expenditures with 100% Bonus Depreciation for the 2011 tax year.
The most important difference between bonus depreciation and section 179 is both new and used equipment qualifies for Section 179 Deduction (as long as the used equipment is "new to you"), while Bonus Depreciation covers new equipment only. Bonus Depreciation is useful to very large businesses spending more than $2 million on new capital equipment in 2011; also businesses with a net loss in 2011 qualify to deduct the cost of new equipment.
When applying these provisions, Section 179 is generally taken first, followed by Bonus Depreciation - unless the business has no taxable profit in 2011 (the unprofitable business is allowed to carry the loss forward to future years).
The equipment, vehicle(s), and/or software must be used for business purposes more than 50% of the time to qualify for the Section 179 Deduction. Simply multiply the cost of the equipment, vehicle(s), and/or software by the percentage of business-use to arrive at the dollar amount eligible for Section 179.
Vehicles used in business qualify - but certain passenger vehicles have a total depreciation deduction limitation of $11,060, while other vehicles that by their nature are not likely to be used more than a minimal amount for personal purposes qualify for full Section 179 deduction.
Whether Congress adopts this for 2012 is not known at this time, so this may be the last year to take advantage of this "tax incentive."
Sales Makes It Happen Previous Columns:
The Problem with Accepting Late Payments
A recent New York case, involving Twin Cities Financial underscores the problem with accepting late payments, after a Notice of Default has been issued and served.
In the case of TCF Equipment Finance, Inc. v. New Door of New York Corp., Slip Copy, 2011 WL 5041795 (N.Y.Sup. 2011), the Kings County Supreme Court was faced with a lease of woodworking equipment. The Debtor failed to pay and TCF issued, and the Debtor received, a Notice of Default for non-payment. However, after the Notice of Default, the Debtor made two payments aggregating about $18,000. TCF cheerfully cashed the check. However, unsatisfied with the response of the Debtor, TCF instituted a replevin action against the debtor for the equipment. The Debtor, of course, submitted affidavits as to conversations with the collections department as to waving the default, the content of which was denied by TCF.
The Court had no problem concluding that the lessor waived the default by accepting the late payments and denied the replevin.
Since TCF was located in the State of Minnesota, that law applied, and the Court construed the Minnesota case of Cobb v. Midwest Recovery Bureau Co., 295 N.W.2d 232 Minn. 1980). That case stands for the proposition that a creditor which routinely accepts late payments waives the default, thus requiring the creditor to send a new Notice of Default which explicitly states that despite the receipt of late payments, a default still exists.
This principal that a creditor risks waiving its default by accepting payments after a Notice of Default is well established, but not without controversy. In many states obtaining a waiver of default based on receipt of late payments is a tough row to hoe. See Speigle v. Chrysler Credit Corp., 56 Ala.App. 469, 323 So.2d 360 (Ala. 1975); Harty v. Underhill, 710 S.E.2d 327 (N.C.App. 2011).
Despite the dueling authority, any leasing company which accepts payments after a default has been declared risks waiving that default unless a new Notice of Default is issued.
Leasing attorneys drafting documents should include provisions which allow receipt of late payments without waiving a default. A good example of that kind of clause is contained in Ford Motor Credit Co. v. Ryan, 189 Ohio App.3d 560, 939 N.E.2d 891 (Ohio App. 2010).
For leasing professionals, the simple lesson of the TCF case is that the collections departments should not refer a case to litigation if the lessor has accepted payments after a Notice of Default was issued. The remedy is simply to issue another Notice of Default to the Debtor before sending the matter out for litigation. This simple step of getting one’s ducks in a row can save months of precious time and significant attorney fees.
Visit our Web Site at: www.bkolaw.com
TCF Equipment Finance Case-Westlaw (7 pages):
Certified Leasing Professional Foundation Spotlights
Zach Marsh, CLP
What is your favorite thing about the equipment finance industry?
I like that it is large enough that some of the biggest banks and corporations play a role in the industry, yet even the smallest of companies and individuals can carve out a niche. I also like that a big part of our industry serves the small business person. For every Microsoft, GE and Wal-Mart, there are thousands of small businesses that employ the general populous and truly are the backbone of our nation. Our industry helps many of those businesses to not only survive but also to thrive.
Give a short description of your background in the industry.
I am still relatively young in the industry at ten years but have been on the ground floor of a growing company for most of my tenure. I went to college and studied business and computer science and after a six month sabbatical from school and work (why not?), I found that the computer part of my degree had already begun to age. After discouraging interviews with Microsoft, Real Networks and Amazon, I decided to take a job with a local leasing company to help write reports and ended up performing various admin, IT, accounting and finance job functions within my first two years.
I had the opportunity to work directly with the CEO and made enough of an impression that when he left the company to start Orion First Financial he chose me as one of his initial handful of employees. I have been with Orion ever since and continue help our team build a dynamic servicing organization.
What are the biggest challenges in your day?
I think the economic downturn has to be the biggest challenge of my day thus far. In the past five years all types of money has entered and exited the industry as well as some of the most profitable companies have had to close their doors. As if dealing with the stresses of survival during the rapid downturn while further watching your peers disappear into unemployment and failure wasn’t enough, we now have to figure out how best to seize the opportunities that exist for those fortunate enough to have survived.
What is the last book you read?
I actually don’t read books all that often. Instead I have become a content reader. I have two main methods of receiving that content: email and social media. I receive industry topics and LinkedIn discussions to my email and I have subscribed or “liked” several content providers from my Twitter and Facebook accounts. With all of those content feeds easily viewed from my Smartphone and PC I can scan the content whenever is convenient and if something sounds interesting I follow the links to the actual article or website.
Would you like to share an interesting hobby or accomplishment?
I have always been a competitive person and part of how I cultivate that I continue to play a lot of softball. But keep in mind it is not the co-rec, Sunday afternoon, beer league type softball. I play the once or twice a week league and several weekends a year tournament brand. To do so requires maintaining a delicate balance of being a good husband, father and working professional. However I have always believed that competition is a good thing – it is what drives our free market system as the fuel of the entrepreneurial spirit and a driving force behind some of our great leaders and innovators. Perhaps I have too much competitive spirit since wanting to be the best I can be with my family and professional life is not enough to satisfy me, but I will continue to play so long as my body lets me.
Biography from Orion First Financial:
“Zack has been involved with the UAEL and ELFA. He is a Certified Leasing Professional and has a BA from Washington State University where he focused his studies in business and information technology.
“Zack lives with his wife and two daughters in Puyallup, WA. Zack enjoys softball and camping with his family.”
Global Leasing Resource Now Over 500 Lessors in its Database
Global Leasing Resource (GLR), launched earlier this year, now has over 500 leasing companies in its comprehensive database. Each listing is substantive, providing users with company profile, key contacts, condensed financial information and details regarding products and services offered. The listings are from 67 leasing economies throughout the world-from Australia to Zambia, and every meaningful country in between.
The objective of GLR’s global database is to facilitate meaningful business to business interaction between the varied stakeholders in the leasing industry – brokers, vendors, lessees and; most importantly, lessors themselves seeking to do business with other lessors.
Leasing companies, throughout the world, are invited to submit their free listing by visiting www.globalleasingresource.com.
(Leasing News provides this ad as a trade for investigations
In the "old days," and I am not talking about George M. Cohan days, but twenty ears ago, AOL, CompuServe, and Prodigy were the only private networks. Connections were 2400 baud. I remember when I used to connect on AOL at 9600 baud and thought that was "fast." Wow!!!
To save time, just like they do in ham radio or even police calls with codes, e-mai users came up with their own codes. They are still used today, especially on hand held digital devices.
They are intended to be read sideways.
((Please Click on Bulletin Board to learn more information))
Banking Revenues after the $5 Debit-Card Controversy
Banks could have circumvent the $5 debit-card fee controversy simply by adjusting their deposit rates by 0.01% generating nearly twice as much in interest-expense savings as the new fees on debit cards.
SAN ANSELMO, Calif. The latest analysis from Market Rates Insight (www.marketratesinsight.com) shows that banks could have generate nearly double the potentially $875 million in monthly debit card fees just by lowering their deposit rates by as little as 0.01% (one hundredth of one percent) a month. The $875 million is the total potential for debit-card fees if each of the 175 million US adults with bank account will pay $5 per month. A decrease of 0.01% in the national average deposit interest rate reduces interest expense for banks by about $1.5 billion a month, which impacts the bottom line in the same way as earning this amount through fees.
In 2010, interest expense on deposits at FDIC insured banks was $107 billion, or an average of $9.2 billion per month compared with an average monthly interest expense of $7.7 billion as of June of this year – a decrease of $1.5 billion a month in average interest expense. The national average interest rate for deposits was 0.80% at the end of 2010, and 0.74% in June of this year – a decrease of 0.06% in six month or an average decrease of 0.01% per month. Thurs, maintaining the “normal” decrease of 0.01% per month reduces interest expense nationally by $1.5 billion per month, which is nearly twice as much as the total potential income from the $5 debit-card fee if every bank-account holder had to pay it.
Refining deposit rates to the tune of 0.01% without adversely impacting deposit balances is possible by applying higher level of pricing precision and analytics. Banks typically overpay, relative to the competition, when matching interest rate on a basic CD (average of 0.60%) to the competition not realizing that the competing CD has a requirement, such as new-money (average 0.85%), which pays a premium of 0.15%. As a result, the basic CD is overpriced by 0.15% increasing the interest expense of the bank needlessly
“By increasing the level of pricing precision and analytics,, banks can maintain a healthy net interest margin and protect their bottom line in the next two to three years until the economy recovers,” said Dan Geller, Ph.D. Executive Vice President at Market Rates Insight, “better yet, this objective can be achieved with minimal effort and, most importantly, without alienating customers.”
About Market Rates Insight
Market Rates Insight (MRI, www.marketratesinsight.com) is a reputable provider of competitive-pricing information and analysis to financial institutions. MRI’s competitive data is complete, detailed and timely, which allows for the highest level of pricing precision. Therefore, the use of MRI’s competitive data ensures greater pricing optimization, and subsequently, improved profitability. In addition to competitive-pricing data, MRI also conducts pricing analysis and provides tracking of industry indexes. MRI’s indexes, published weekly in the National Pricing Indicators, are the industry standard for deposit pricing, and are viewed weekly by executives of banks and credit unions through video, audio and print channels.
Dan Geller Ph.D.
Business networks champion tax reforms that raise revenues to invest in America’s future, counter push from corporate lobbyists for more tax breaks
Washington, DC – Three business networks – Business for Shared Prosperity, the Main Street Alliance and the American Sustainable Business Council – submitted a joint letter to the Congressional Supercommittee on the deficit. The letter urges Supercommittee members to support tax reforms that raise revenues to restore America’s economic vitality, countering an all-out push from big business lobbyists for even more corporate tax breaks as the Supercommittee’s November 23 deadline looms.
“If I were a businessman competing with America, I’d be applauding more tax cuts for U.S. megacorporations and millionaires,” said Lew Prince, managing partner of Vintage Vinyl, an independent music store in St. Louis, MO with 22 employees, and Business for Shared Prosperity member. “Instead of investing in the 21st century education, research and infrastructure we need to create jobs today and succeed in the future, we’re laying off teachers and letting our middle class crumble along with our bridges. The last thing we need is more cutbacks to pay for more tax cuts at the top.”
The corporate tax code should ensure that all companies – large and small – pay a realistic and fair share toward the cost of public infrastructure and government services that underpin our economy.
The tax code should promote a level playing field between large multinational corporations and smaller, domestic businesses. We need to close loopholes that allow large multinational corporations to avoid their tax obligations by shifting U.S. profits offshore, rather than rewarding firms engaging in this practice with either short or permanent tax holidays.
Corporate tax reform needs to be revenue positive. It makes no sense to freeze the corporate income tax component of federal revenues at historically low levels, much less reduce them further.
The tax code should reflect longstanding principles of tax progressivity, in which those with higher incomes pay a larger share in taxes than those with lower incomes.
Business for Shared Prosperity, the Main Street Alliance, the American Sustainable Business Council and more than 250 other business organizations, owners and executives have signed a new petition, still collecting signatures, in support of corporate tax reform based on the principles above.
“Let me get this straight – the same corporate players that routinely use their market power to steamroll over small businesses are now asking us to foot the bill for their tax holidays?” said Aimee McQuilkin, owner of Betty’s Divine in Missoula, MT, referring to a push by the “WIN America Campaign” for a temporary or even permanent tax holiday for the return of off-shored profits. McQuilkin serves on the steering committee of the Montana Small Business Alliance, affiliated with the national Main Street Alliance network. “Enough is enough,” she added. “If you want to fly the American flag outside your corporate headquarters, you should be paying your way.”
More than 1,200 business people have signed onto a longer-standing Business Against Tax Haven Abuse statement at www.businessagainsttaxhavens.org.
“We need tax reform that rewards the real job creators, not the job destroyers,” said Frank Knapp, President and CEO of the South Carolina Small Business Chamber of Commerce and Vice Chairman of the American Sustainable Business Council. “We need tax revenue to invest in a sustainable economy, not more tax and budget cuts that take money from Main Street customers while lining the pockets of quick buck artists on Wall Street.”
“Albert Einstein defined insanity as doing the same thing over and over again and expecting different results,” said Scott Klinger, tax policy director of Business for Shared Prosperity. “We can’t cut our way to recovery: The corporate tax share of federal receipts is already just 9%, way down from 32% in 1952. We need tax reform that stops corporate tax dodging instead of rewards it, levels the playing field between big business and small, and raises the revenues we need to rebuild our economy.”
“I’m tired of corporations cloaking their demand for more tax breaks in the guise of creating jobs, even as they lay off American workers,” said Jody Gorran, chairman of Aquatherm Industries Inc, in Lakewood, NJ, and a business member of the American Sustainable Business Council. “They can stop piling up record cash and begin hiring tomorrow. My company has been manufacturing in New Jersey for 22 years. It’s time for big corporations to stop passing the buck, pay their fair share in taxes and create jobs here at home.”
“At a time of unprecedented long-term unemployment, a glaring need for investment in our crumbling infrastructure and an educated workforce, and a realization that some of our largest banks and Fortune 500 companies are sitting on trillions of dollars – unwilling or unable to invest and hire American workers – our government has a responsibility to raise the revenues necessary to assure our economic recovery,” said Jim Houser, owner of Hawthorne Auto Clinic in Portland, Oregon and co-chair of the Main Street Alliance of Oregon. “There’s no excuse for delay now, given the length and depth of our current economic crisis.”
Business for Shared Prosperity is a network of forward thinking business owners, executives and investors. BSP has organized petitions for positive corporate tax reform and for ending top-rate tax cuts, and produced related reports. BSP is a member of the American Sustainable Business Council. www.businessforsharedprosperity.org
The American Sustainable Business Council is a growing coalition of business networks and businesses committed to advancing policies that support a vibrant and sustainable economy. Today, the organizations in this partnership represent over 100,000 businesses and more than 200,000 entrepreneurs, owners, executives and investors. www.asbcouncil.org
The Main Street Alliance is a national network of state-based small business coalitions. MSA creates opportunities for small business owners to speak for themselves on issues that impact their businesses and local economies. www.mainstreetalliance.org
##### Press Release ############################
Fairport, New York -- Adopt-a-Dog
Pet ID #: 13968371
"Polly is just a good dog! She seems to really like being by your side, walks nicely on the leash, and is another dog who loves to be loved. She is a 4 year old Lab/Hound mix, weighs in at a slightly tubby 78 pounds, and likes treats. She too rode to Lollypop Farm in the Rescue Waggin and asks that her next ride be to her forever home. If you think you are the right people for Polly, she is available to meet you whenever the shelter is open."
This pet comes with a 30-day gift of Sheltercare pet insurance, the number one brand of pet insurance for adopted pets. Over 3 million adopted pets have already been insured!
Shelter: Lollypop Farm, the Humane Society of Greater Rochester
Adopt-a-Pet by Leasing Co. State/City
Adopt a Pet
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This Day in History
1734- birthday of Daniel Boone (Boon,) American frontiersman, explorer and militia officer, born at Berks County, near Reading, PA. He is credited with the exploration and growth of Kentucky, working for the Pennsylvania Company.
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