www.leasingnews.org Wednesday, December 1,2004
Independent, unbiased and fair news about the Leasing Industry
ELA 3rd Q Shows Leasing Growth
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Equipment Leasing Industry Quarterly Report Shows
The Equipment Leasing Association's (ELA) 3Q 2004 Performance Indicators Report (PIR) shows that new business volume grew at 7.1 percent when compared to the 3rd quarter 2003. Total net portfolio also increased 15 percent, indicating that the economy is gaining momentum.
Other key findings include:
*The total number of employees grew almost 9 percent as companies have increased their staff in response to an improved economic picture.
“The key metrics are showing signs of life,” said Ralph Petta, Vice President of Industry Services for ELA. “Originations are increasing and portfolio quality shows improvement as pockets of the economy continue to strengthen.”
The PIR study is conducted quarterly by ELA, which provides a variety of data, including customized market analyses, to ELA members and organizations involved in the $218 billion equipment leasing industry. The survey is conducted among approximately 20 major leasing companies on a quarterly basis, affording trend analysis across all major performance areas.
Because the same companies were tracked and used in the analysis, the PIR provides fairly reliable trend analysis. Each illustration reflects the data provided by those companies responding to that particular question. Typically, not every company polled responds to every question.
To learn more about the equipment leasing industry, visit www.elaonline.com/leasing4usa .
Participants in the 3rd quarter 2004
Bank of NY Buys Out of RW Professional Mess
by Kit Menkin
“Bank of New York eats $24,000,000 for not handling the infamous "E" account properly. Barry will never serve time in jail, but the deep pocket guys will roll to cover their ****.”
( Name With Held )
It was no surprise to see shares of Bank of New York Co. fall 1.1% on a report that the company may pay a $24 million fine in order to avoid criminal indictment for allegedly failing to report suspicious activity at a branch.
Manhattan-based Bank of New York's stock fell to as low as $32.62 Tuesday morning; by 10:14 a.m., it was off 0.8%, at $32.74.
As readers have been following our many stories about RW Professional Leasing Company, the case involves litigation regarding the process of securing leases directly and in directory, in a warehouse line to pay to pay upfront equipment costs. RW allegedly told lenders that the loans would be repaid with leasing revenue, which would be paid into escrow accounts at the Bank of New York. Instead, the firm is accused of putting $92 million in loan proceeds into a Bank of New York account and diverting more than $28 million to the leasing firm's owners.
Several principals of RW and a former Bank of New York branch manager, Myrna Katz, were arraigned in federal court in March for their roles in the alleged scheme. They pleaded not guilty.
Bank of New York is in discussions with the U.S. Attorney for the Eastern District of New York to pay a $24 million penalty, cooperate with prosecutors and submit to independent monitoring, reported the Wall Street Journal on Tuesday.
According to an indictment in U.S. District Court for the Eastern District of New York, RW Leasing obtained large loans from banks by saying it needed the money for upfront costs of the equipment. Lenders were told they would be repaid through leasing revenue that went into escrow accounts at Bank of New York. Instead, according to the indictment, RW Leasing put about $92 million in loan proceeds into a single account at Bank of New York, then diverted at least $28 million to the firm's owners.
Prosecutors are contending that, given the quantity of money that went through the RW Leasing account, the bank should have noticed suspicious activity and filed reports with regulators. Banks are required to closely monitor all of their accounts for signs of money laundering, fraud and other financial crimes.
Neither of the lead attorneys would return our e-mail or telephone calls on any matter since the start of the trial, which has been postponed as the man behind the scenes, Barry Drayer, reportedly fired all his attorneys and is pleading to the court he is too broke to pay any legal fees.
The case may go to trial in March of next year. One plaintiff has made a deal, and it is reported a broker named in the suit may turn state evidence, but his involvement appears to be a side issue in the suit.
The “stalling” of the trial makes other things happen, such as Bank of New York with its problems ( reportedly also involving other difficulties than RW Professional.)
Former Sierra Cities President Tom Depping sold off the company before the buyer American Express found problems, resulting in a $20 million pending law suit ( postponed to the criminal case) as well as several other cases involving community banks allegedly scammed with Bank of New York reportedly playing a role.
With American Express out of the leasing business and the lack of money available, it appears the suit may be moot as there is no money to collect or desire to even be reminded of the companies involvement in an industry it should have stayed clear of ( ask the top executives about this and they know where the investment makes the better return—it was never equipment leasing, something Merrill-Lynch is starting to learn.)
It is ironic, as the person who sent Leasing News the information about Bank of New York, seems to echo what is happening in this legal world with Tyco, NorVergence, CMC, and others seemingly able to walk away, as Tom Depping also did, and here we have Martha Stewart in jail because she sold some stock after she received inside information ( as determined by the trial.) Her crime was pocket change compared to these individuals, but perhaps because she was a woman, and a famous one at that, she goes to jail while the men are able to walk free.
CMC Bankruptcy Keeps On Going
Reporteldy the settlements over unpaid leases continue two years after the bankruptcy of Commercial Money Center (CMC). Officers have been back in business since then, but under different names.
The latest agreement involves Lakeland Bank and Royal Indemnity.
Allegedly both firms filed claims against each other over the pools of commercial leases Lakeland purchased from CMC and surety bonds Royal issued that guaranteed lease income. Under terms of a recent agreements. Royal will pay $1.85 million to Lakeland, which in turn gets to retain $531,000 Royal already paid. The deal must still be approved by the U.S. Bankruptcy Court.
Equipment Leasing Association
Equipment Leasing Association of America
The largest, and perhaps the most politically influential leasing association, backed by all segments of the leasing industry, is the Equipment Leasing Association . Their dues reflect a professional, well-run and managed association with the most meetings, the best equipment leasing website on line, legislative advocates in Washington , D.C. , also available to many states, top rated conferences, and is very sophisticated. It also has the largest number of members. There is something for every segment of the leasing industry and many benefits to growing leasing companies and leasing company executives.
It should be noted that the ELA conference attendance has always been "outstanding", their legislative involvement is not paralleled in our industry, and their web site, with its full and always current information, is the best leasing industry web site, no competition. If you have not visited it, you should:
Membership information can be requested on their website, as well – simply click on “Membership Info” at the top left of the home page. There are membership categories for all types of firms involved in the industry, with leasing company dues beginning at $2,200. This membership is essential for any company that is serious about succeeding in the leasing industry – the “Members-Only” section of the website alone is more than worth the cost of dues.
For any membership questions not answered on the website, contact:
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Six New CLP's
The Board of Directors of the CLP Foundation would like to extend its congratulations to our new group of Certified Lease Professionals, who are all with IFC Credit Corporation located in Morton Grove, IL. We wish to thank IFC for their continued support of the CLP Program.
Kevin Collins, CLP
Stephen S. Csar, CLP
John Estok, CLP
Lee A. Herndon, CLP
Gus Nicolopoulus, CLP
The letters "CLP" behind their name are visible recognition of their experience in the industry and their professional achievement in having passed the CLP Exam.
The CLP Foundation is the official governing body for the Certified Lease Professional ("CLP") Program. The CLP designation sets the standard for professionalism in the leasing industry. This designation identifies and recognizes individuals within the leasing industry who have demonstrated their competency through continued education, testing and conduct. The letters "CLP" behind their name represent a visible recognition of this professional achievement and status.
We invite you to visit our we site -- www.clpfoundation.org for detailed information bout the CLP Foundation and the CLP Program. For further information about our Mentor Program and Anonymous Test Taker Program please contact:
Cynthia W. Spurdle
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NACM Credit Manager's Index (CMI) for November 2004:
COLUMBIA, MD: -- The National Association of Credit Management (NACM) has released its Credit Manager's Index (CMI) for November 2004. The CMI, a monthly survey of the business economy from the standpoint of credit and collections, was launched in January 2003 to provide financial analysts with another strong economic indicator.
Overall, nothing changed in November. A slight slowing in the manufacturing sector growth was offset by a small gain in the service sector. There don't appear to be any major concerns as we head into December.
The CMI survey asks credit managers to rate favorable and unfavorable factors in their monthly business cycle. Favorable factors include sales, new credit applications, dollar collections and amount of credit extended. Unfavorable factors include rejections of credit applications, accounts placed for collections, dollar amounts of receivables beyond terms and filings for bankruptcies.
The National Association of Credit Management (NACM), headquartered in Columbia, Maryland supports more than 25,000 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 and education, delivering products and services which improve the management of business credit and accounts receivable. NACM's collective voice has influenced legislative 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.
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CIT's First Annual Healthcare Industry Survey Delivers Healthy Prognosis For the U.S. Specialty Healthcare Segment in 2004-2005
TEMPE, Ariz., / -- The prognosis for the nation's specialty healthcare providers is excellent, according to the results of the first annual CIT Healthcare Industry Overview, which found that balance sheets are strong and patient volume is on an upswing, leading to a continued investment in improved technology and new equipment to enhance patient care. The survey, released by CIT Healthcare Finance, a unit of CIT Group Inc. (NYSE:CIT), provides an in-depth look at the current state of the U.S. specialty healthcare segment.
"The CIT Healthcare Industry Overview is the first and most comprehensive study of market and financial factors currently affecting the specialty healthcare segment in this critical time of change, challenge and opportunity for the industry," said John Medina, Senior Vice President, CIT Healthcare Finance. "By monitoring the pulse of this vibrant industry, the Overview found that healthcare decision-makers are confident about the financial health of their company. In addition, they intend to make investments in their facilities and equipment and they anticipate changes in the healthcare system."
Specialty Healthcare Industry Trends
CIT Healthcare Industry Overview examined trends in the specialty healthcare industry, including finance, business strategies, issues and opportunities, and technology. Highlights of the study follow:
A majority of survey participants from specialty healthcare organizations and durable medical equipment (DME) manufacturers reported strong confidence in the financial soundness of their companies. On a scale of 1-10, 64 percent of providers and 58 percent of DME manufacturers ranked the overall health of their organization as an eight or higher (with ten being "excellent"). Compared with 2003, 44 percent of providers and 61 percent of DME manufacturers said that the overall financial health of their organization was better in 2004.
Capital spending is on the rise at many specialty healthcare organizations as providers invest in their facilities and equipment. Fifty-six percent of surveyed providers anticipate a move or renovation within the next five years and 45 percent of those who plan to acquire equipment said they would spend $200,000 or more in total. For those looking to raise capital, 54 percent of providers said they would use the funds to acquire equipment, software and other capital items. Corresponding to providers' plans to purchase medical equipment, nearly three-fourths of DME manufacturers expect their company's net earnings to rise, with an average projected increase of an impressive 43 percent. Additionally, almost 70 percent of providers expect their region's patient-dollar volume to increase.
Both providers and DME manufacturers are keeping a close watch on their competition, which, according to 92 percent of providers and 79 percent of DME manufacturers, has increased or stayed constant in recent years. To remain competitive and increase net patient revenue, many providers are putting a premium on increasing the number of patients they serve, and 28 percent are adding doctors, services or locations to their organization.
Among DME manufacturers, about eight in ten survey participants hope to increase their market share; 76 percent plan to take an aggressive approach to marketing and sales; and 30 percent plan to raise the prices they charge for their goods and services.
Issues and Opportunities
The healthcare delivery system is dynamic, growing and increasingly complex, yet many of the challenges that specialty outpatient healthcare providers face also affect others in the system. Recruiting and maintaining qualified healthcare professionals, such as nurses and medical technicians, is a major issue within the specialty healthcare segment. Fifteen percent of providers said employee payroll was the primary reason for their organization's higher 2004 budget and one-third are expected to spend more money recruiting personnel going forward. An additional issue facing the healthcare industry is the rising cost of health insurance. Virtually all providers and DME manufacturers surveyed said it was "very likely" or "somewhat likely" that the cost of health insurance will continue to rise at a pace that exceeds the overall inflation rate in the U.S. However, only 31 percent of providers and 38 percent of DME manufacturers feel that the healthcare system is prepared to deal with continued high insurance-cost escalation.
Information technology is an increasingly important business tool in the healthcare industry. Ninety-three percent of providers and 87 percent of DME manufacturers said that the healthcare industry was "somewhat likely" or "very likely" to face continued pressure to improve their information technology capabilities in the coming years. According to surveyed providers, investments in information technology hardware and software will be needed to meet the demands created by increased healthcare system complexity, a stronger focus on managing healthcare costs, and together patient-privacy requirements and a variety of other factors.
Across the country, specialty outpatient healthcare providers from different regions varied in their perspectives of the market and financial factors currently affecting the healthcare delivery system. The regions for the survey are:
* Northeast - Connecticut, Maine, Massachusetts, New Hampshire, Rhode
Island, Vermont, Pennsylvania, New Jersey, New York
* North Central - Illinois, Indiana, Michigan, Ohio, Wisconsin, Iowa,
Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota
* South - Delaware, Florida, Georgia, Maryland, North Carolina, South
Carolina, Virginia, Washington, D.C., West Virginia, Alabama,
Kentucky, Mississippi, Tennessee, Arkansas, Louisiana, Oklahoma, Texas
* West - Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah,
Wyoming, California, Oregon, Washington
While more than half of all surveyed providers saw the total volume of healthcare spending in their area rise, Northeast providers expressed stronger confidence while participants from the West were more cautious.
Competition among providers appears strongest in the South, where 42 percent of providers said they had seen a rise in competing facilities, compared with a national average of 37 percent. Only 28 percent of respondents from the West reported an increase.
Despite the competition, 73 percent of providers in the South rated their organization's financial health as "excellent" in 2004, while just over half (51 percent) of West Coast respondents shared their optimism.
In the North Central region, providers were more likely to buy durable medical equipment (55 percent versus national average of 50 percent) and providers in the Northeast had the biggest upswing in their capital equipment budgets.
For a copy of the CIT Healthcare Industry Overview,
About the CIT Healthcare Industry Overview
The Overview independently surveyed management personnel responsible for making key financial decisions within specialty healthcare providers, including ambulatory care providers, specialty healthcare practices, diagnostic imaging centers, dialysis centers, oncology centers, diagnostic labs, and hospitals and health systems, as well as durable medical equipment (DME) manufacturers. Over 450 decision makers from across the U.S. were surveyed via the telephone.
About CIT Healthcare Finance
CIT Healthcare Finance is one of the country's leading providers of financial services and solutions to the healthcare industry. The company provides a wide array of financial offers especially designed to meet the needs of specialty outpatient healthcare providers, including ambulatory care providers, specialty healthcare physician practices, hospital and health systems, equipment manufacturers, distributors and other medical facilities and healthcare industry organizations.
CIT Group Inc. (NYSE:CIT), a leading commercial and consumer finance company, provides clients with financing and leasing products and advisory services. Founded in 1908, CIT has approximately $50 billion in assets under management and possesses the financial resources, industry expertise and product knowledge to serve the needs of clients across approximately 30 industries. CIT, a Fortune 500 company and a component of the S&P 500 Index, holds leading positions in vendor financing, factoring, equipment and transportation financing, Small Business Administration loans, and asset-based lending. CIT, with its principal offices in Livingston, New Jersey and New York City, has approximately 5,800 employees in locations throughout North America, Europe, Latin and South America, and the Pacific Rim.
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Equipment Financing Group, Inc. adds new General Sales Manager
Fresno, Ca. –—
Equipment Financing Group, Inc. has added Mr. Richard Rocker to the position of General Sales Manager at our Fresno office. Mr. Rocker comes to EFG fromEPI Leasing and Feather River State Bank. Mr. Rocker brings over 20 years of commercial leasing experience to our company. He will be responsible for overseeing the sales and development of our current and future projects.
Equipment Financing Group, Inc. has shown a 131% increase in lease revenue year to date compared to the same period in 2003. This increase was attributed to lower cost of funds, new Corp-only programs, and additional deferred payment options being offered to our sources.
EQUIPMENT FINANCING GROUP, INC.
Equipment Financing Group, Inc. (www.efglease.com) is a leading small ticket funding source located in Fresno California. The company operates additional offices in Los Angeles, Michigan, and Pennsylvania. Started in 1992 the company has shown tremendous growth in the last 12 months.
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The Corporate Finance Group of ORIX USA hires Patrick Barrett
Atlanta, GA, . Patrick Barrett has been hired as Vice President, for ORIX USA's Structured Finance division based in Kennesaw, GA. Barrett will be based in New Jersey and be responsible for direct lease and loan origination in the Northeast. Barrett brings to ORIX a wide range of experience in leasing and corporate lending.
Steve Crain, President of Structured Finance said, “Pat brings over 20 years of experience in the leasing industry. With his diverse background, he has a good working knowledge and understanding of our products and customer base which will further strengthen our marketing team.”
Barrett will report to Blair McBeth, Senior Vice President, managing the direct marketing team for Structured Finance.
Structured Finance specializes in providing equipment financing and leasing to middle market and larger business enterprises. Additionally, Structured Finance provides “turnkey” financing (land, building and equipment) of facilities (refineries, manufacturing plants, grocery stores, processing plants and other facility-related business locations) with core competencies in manufacturing, grocery, energy, mining, business aircraft, rail, marine and other capital intensive industries.
Structured Finance is part of the Corporate Finance Group of ORIX USA Corporation.
The Corporate Finance Group provides senior secured, unsecured, mezzanine and structured finance credit products to companies throughout the U.S. and Canada. ORIX USA Corporation, together with its wholly owned subsidiaries, is a division of ORIX Corporation, Japan's leading diversified financial services provider. Based in Tokyo with operations in 23 global markets, ORIX Corporation is a publicly traded company listed on the Tokyo, Osaka, Nagoya and New York Stock Exchanges (Ticker: IX)
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Experian Announces DecisionOne to
New software combines business credit data, customizable decisioning and account management capabilities, and cutting-edge technology into a single comprehensive solution
Costa Mesa, Calif.– Experian®, a global information solutions company, today announced the launch of DecisionOne™, a new Web-based credit decisioning and account management tool for medium to large businesses, empowered via a partnership with LiveCapital®, a leader in credit management software. The new solution improves credit department productivity and risk management by combining the power of Experian's comprehensive business credit database and customizable decisioning and account management capabilities, with LiveCapital's cutting-edge technology.
“Credit professionals want more time to focus on high-priority activities and better visibility into emerging problems,” said Mark Zablan, president of Experian's Business Information Solutions. “DecisionOne solves these issues and revolutionizes the way companies manage business credit by enabling the process to be entirely paperless.”
DecisionOne helps clients increase revenue and reduce costs with respect to both new customers and existing accounts. For new customers, the product automates and streamlines the decision process. Decisions can be made instantly based on client-defined rules. In addition, for decisions that require manual intervention, the product allows users to manage their workflow processes electronically. For existing accounts, DecisionOne provides a rules-based mechanism for proactively alerting the credit department to changes in customer credit quality. As a result, credit professionals can better identify issues before they turn into problems.
“Credit management software has historically been difficult to implement, hard to use or expensive,” said Mike Grossman, CEO of LiveCapital. “DecisionOne fundamentally re-defines credit management software by combining unique functionality with a distinctive approach to product delivery and pricing.”
DecisionOne offers the following benefits:
*Improved Efficiency – DecisionOne automates the decision making process based on specific and customized credit policies resulting in faster, more consistent and more objective decisions.
*Increased Sales – By enabling clients to more effectively manage their receivables, DecisionOne helps improve customer service, identify new revenue opportunities and accelerate collections.
*Reduced Risk DecisionOne helps credit professionals better manage risk by enabling them to apply systematic rules in evaluating new customers and existing accounts.
*Reduced Cost and Conserved Resources – As an on-demand, Web-based service, DecisionOne requires minimal IT effort with no additional hardware or software to be installed. It is also easy for credit professionals to customize through a simple step-by-step set-up process. Additionally, DecisionOne enables the credit process to be entirely paperless, as all processes are completed online – eliminating unnecessary manual tasks.
DecisionOne also utilizes Experian's comprehensive credit and demographic databases, Commercial and Small Business Intelliscore models, as well as other third-party sources for business and credit information.
For more information about DecisionOne, visit www.experian.com/products/decision_one.html or
Experian® is a global leader in providing information solutions to organizations and consumers. It helps organizations find, develop and manage profitable customer relationships by providing information, decision-making solutions and processing services. It empowers consumers to understand, manage and protect their personal information and assets. Experian works with more than 40,000 clients across diverse industries, including financial services, telecommunications, health care, insurance, retail and catalog, automotive, manufacturing, leisure, utilities, property, e-commerce and government. Experian is a subsidiary of GUS plc and has headquarters in Nottingham, UK, and Costa Mesa, Calif. Its 13,000 people support clients in more than 60 countries. Annual sales exceed $2.3 billion. For more information, visit the company's Web site at www.experian.com .
LiveCapital® is a leader in credit management software. The company's technology solutions enable enterprises to make smarter and faster decisions, improve productivity and better predict and manage risk. The result: lower bad debt, reduced operating costs and improved DSO. LiveCapital's software is used by many leading companies, including Siebel Systems, Siemens and Waste Management. For more information, please visit www.livecapital.com.
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Ken Jennings, `Jeopardy!' whiz, finally meets his match
The Radio City Music Christmas Show is a “must.”
Bobby Flay is cooking at Mesa Grill this week, as his executive chef is on vacation. He cooked me specially his spiced pork dish—wow!!! He visited us at our table---what a personality and down to earth guy. He told us he cooks every two weeks at his new restaurant in Las Vegas, Nevada. Unusual for such a personality to still work behind the stove.
If you come to New York City, be sure to see “Avenue Q.”