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Leasing Co-Op---A First Perhaps the first leasing co-operative has been proposed, which will change the leasing industry as we know it. It may alter all the non-profit leasing associations and the way business is being done in the equipment leasing industry. American Leasing Alliance and MainStreet Cooperative Group announced plans to launch a nationwide cooperative owned by independent equipment lease financing companies. This will not be a “funding source” or “super broker” but a powerhouse of leasing discounters and brokers. The cooperative, OneWorld Leasing, Inc., will serve as a marketing and loan syndication company for small- and medium-sized companies in the industry. The cooperative expects to have 7 founding members and plans to have 500 member businesses by the end of 2003. There is no limit to the size of the co-op, and there may be several “co-ops” per niche in the leasing industry, with other benefits for members due to group purchasing “power.”. “ We will not offer warehousing or funding of leasing transactions,” David Stearns, CEO of American Leasing, says, "OneWorld Leasing will become a true leverage play for the smaller leasing company concerned about industry consolidation, super brokers, better lease-loan rates and a level playing field. “ We will be able to go to a major funder and say we represent 500 leasing brokers. We want a better buy rate than you are offering for our business. “ If we represent 2,000 brokers, I am sure any funder will give us a better rate...We may start off only with 500 brokers, but I am sure we can obtain many advantages for our co-op members.” Unlike lease consolidation plays, the members will own this, yet continue to be independent." Stearns will initially serve as incoming Chairman of the OneWorld Leasing board. MainStreet's Richard Selby will serve as interim CEO during the cooperative formation period. Six to nine months after launch, a leasing industry veteran will be identified to lead OneWorld. “ We have a list of over 6,000 leasing brokers, “ he said. “ This is very similar to other cooperatives we have put together. We go to the supplier and say we have these many members, what can you do for us. “It is similar to going like going to a supplier of drywalls, “ he explained. “We have group power buying that any supplier should be interested in, and as important, benefits to our members. “This also applies to other things we can do for members, including Airborne discounts, Dun and Bradstreet discounts, health insurance discounts, and whatever the members of our co-op would like us to help them with. “ According to Selby, "of all of the cooperatives I have seen being launched in the last decade, OneWorld Leasing is a 'home run' in terms of industry dynamics and syndication opportunities. We are proud to launch this together with American Leasing Alliance. They truly are an industry champion. OneWorld Leasing will benefit its members in many ways, both financially and operationally," Selby added. Selby stated that he has been involved in eight new “co-ops.” They are very similar to agriculture co-ops, where growers combine their product together and sell to at a “group price.” American Leasing Alliance, based in the Chicago suburb of Lake in the Hills, Illinois, is an emerging leader in the equipment lease finance industry. The company reportedly specializes in structuring lease financing for production, income-producing and business-essential equipment. MainStreet Cooperative Group, based in Tempe, Arizona is a leading cooperative service company. MainStreet focuses on developing member-owned cooperatives in various industries and also offers consulting and business services to cooperatives within its network, which is approaching $3 billion in aggregate revenues. How this will affect non-profit leasing associations is not known at this time. Common co-ops are agriculture groups who affiliate to obtain a better price. The concept is similar to One World Leasing. American Leasing Alliance is not related to American Leasing of Santa Clara, California. Brokers on the National Association of Equipment Leasing Brokers (NAELB) Listserve have been talking about “banding together” for a “better rate” and “service”. In fact, it is one of the things on the agenda to see if the association wants to get involved in such a “co-op” at their Orlando, Florida Conference April 11 Both Stearns and Selby will be available for your individual questions at “Meet the Leasing Newsmaker:” on Monday, April 11, 11am, Pacific Daylight Savings Time. David Stearns will be attending the National Association of Equipment Leasing Broker convention, Equipment LeasingAssociation convention, and National Equipment Leasing Broker Association. Monday, April 8t, “Meet the Leasing Newsmaker.” 11am, California Daylight Savings time www.leasingnews.org/newesmaker.htm Contact:
David J. Stearns, Richard
W. Selby, |
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