Wednesday, March 2, 2011
Today's Equipment Leasing Headlines
######## 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.
There should have been some clarification to the list of features available. The clarification was added to the article on line, but those for readers who may have missed it:
(Snopes.com points out some things in the Cell Phone story that are not fully correct and need explanation; certainly all cell phones, especially the digital telephones, work differently. The reason I think this is basically correct is I have personally used some of the features mentioned. Kit Menkin)
While certain cell phones cannot reproduce the sound required, many can. In addition, new digital phones have difference sound devices, and some manufacturers allow you to start your car from your telephone with their model equipment with this feature, even over the telephone as you may have seen in ads. I know the cellular unlock procedure works from my cell phone as have used it to open a Mercedes where the keys were locked in the car. That it does not work on all phones, most likely.
3370# will not give you 50% battery life, but it may give you time to make two or three important calls. It depends on the telephone model. Most phones are not set for the highest quality sound, and this brings up more power. The point here is not how much time is left, but you will be able to make telephone calls if your cell telephone works in this manner, which may be very important at the time. Some cell phones also have this feature with a different number and most likely all digital telephones have a different code. Read the manual. Also many phones accept an “instant cell phone charge battery” that you can carry as a spare for such emergencies. Duracell makes one that provides up to 35 hours for an IPod or 295 minutes talk time on a cell phone:
Entering #06# does not work on all telephones, and the feature of finding a lost telephone certainly is remote so identifying it may not be important. Many digital telephones have this feature in another code. Normally if a cell phone is found, a discoverer needs only to a call back. That happened to me in New York when I inadvertently left my telephone in the Taxi Cab. I got it back almost right away as they called Sue who was with me and had her own cell phone, which the party called as it was the last number I had called.
800-Free-411 of course does not count the time use of the telephone, and therefore is not fully free. Google and other programs have made yellow pages and telephone information numbers obsolete on digital telephones. So how important this feature is a matter of the cell phone plan you have and the type of telephone device you use.
5 Things You Never Knew Your Cell Phone Could Do
(These ads are “free” to those seeking employment
Free Posting for those seeking employment in Leasing:
All “free” categories “job wanted” ads:
Its Come Back to Bite Balboa on the...
(Ecclesia Christian Fellowship pastor Rev. Joshua Beckley
After two years, and the conviction and sentencing of two who committed the fraud against the churches, the California Attorney General's office under Kamala Harris has revived the complaint against Balboa Capital Corp., Irvine, California and United Leasing Associates of America, Wisconsin, Also named in the suit were company representatives Wayne and Tanya Wilson, of Rancho Cucamonga. Not named are Willie Perkins and Michael Morris, of Maryland, officers who are both serving prison time in connection with the scheme in other states.
The kiosks were to be in the church foyer, allowing members to access church information and community activities. The Kiosk monthly payment was to work out being “free,” being supported by advertisements. The churches relied on Television Broadcasting Online, after all they were backed by the leasing company as being legitimate, they told California AG Kamala Harris.
"I think much of the Leasing Cos. problems with under-valued, over sold equipment stems from an unwillingness to underwrite the credits they are making, not with the borrower, they have credit scoring for that--- But with the Vendor, “said Tom McCurnin, Barton, Klugman & Oetting, Los Angeles, California.” Often the Vendors are not pre-qualified, their business model is not vetted, or makes no sense.
"The equipment lessors would rather rely upon a hell and high water clause and offload the investigation task to their borrower.
"This has come back around and bit them in the ass on several occasions."
California AG Kamala D. Harris is seeking $803,100 in restitution and civil penalties in California.
Fifty African-American churches on the East Coast, as well as 300 churches in Maryland, Michigan, Indiana, Ohio Wisconsin, and Texas signed off on a $40,000, 48-month contract with Balboa Capital Corp. Irvine, California, United Leasing Associates of America of Brookfield, Wisconsin and Chesapeake Industrial Leasing of Baltimore as well as other leasing companies.
The Michigan and Washington, D.C. were successful in their suits. California has been slow. Leasing News first wrote this story in 2006 when the claim first started that 33 African American churches in California were persuaded to enter into leases for the kiosks. Twenty-four of the churches are located in Los Angeles County, five in Riverside County and four in San Bernardino County.
Kauai Sunrise “Postcard” from Don Myerson
This photograph was taken by Don Myerson of BSB Leasing with his cell phone. He lives a half year in Hawaii and a half-year in Colorado.
Don and his family live near the Grand Hyatt Hotel, Koloa, Kauai, on Poipui Beach, where the photo was taken. He jogs past the Hyatt every morning on his multi-mile run on a path following the beach. He adds it was 79 degrees the other day.
NEFA Scottsdale Conference New Features
At the upcoming NEFA National Equipment Finance Summit, in Scottsdale, Arizona, on March 17-19, 2011, well known leasing and equipment finance industry public relations expert, Susan Carol, will address how today's commercial finance businesses can cash on in the exploding business potential of Facebook, LinkedIn and other social media technologies.
"Social Media's not just for kids, anymore! Business people can connect with more than just classmates, they can connect with cash if they know how to use social media effectively, “NEFA Executive Director Gerry Egan said.
She has operating her public relations company for 21 years with leasing companies among her clients, formerly a PR manager for MCI and the original Equipment Leasing and Finance Association from 1986-1988, when she founded her own company.
Stuart Papavassiliou, senior editor of the Monitor will join Lisa Rafter of World Leasing News and Kit Menkin of LeasingNews.org in a session entitled Meet the Media designed to give summit attendees direct access to the editors of the leading industry media channels. John Semon of Lessors.com is unable to attend due to a scheduling conflict.
Papavassiliou said, "I'm delighted to join both Lisa and Kit in this session designed to give our readers a sense of how our respective media channels operate. While we cover the same 'beat' so to speak, this provides a great opportunity to discuss where each of us sees coverage of the industry is headed. I look forward to a spirited discussion on the workings of the publishing side of the equipment leasing and finance industry coupled with the opportunity to meet with our collective constituents."
Bruce Winter, a Broker/Lessor member and former Board Member of NEFA, owner of FSG Leasing, very well known and respected in the industry, will detail his 20 years of consecutive profitability including his actual financial statements---a leasing conference first!!!
NEFA member, David Wiener, one of the contributors to the Alta Report, will be giving an oral report to the one to be published in the spring by Equipment Leasing & Finance Foundation on “The Place of the Independent Lessor 2011”. He will be the key speaker on Friday, March 18th at the NEFA luncheon.
“Knowing the NEFA audience would be a prime beneficiary, I lobbied and obtained Foundation express permission to speak from the study even though it will be prior to the publish release,” he told Leasing News.
There is a lot going on, so time to register.
Leasing Industry Help Wanted
Please see our Job Wanted section for possible new employees.
License Up-Date for Leasing in United States
While there is a conception that equipment leasing is not licensed, it is not quite true. Most states have license requirements, and all have issues on usury, requiring a sales/use tax permit, corporation filing to do business in a state, as well as many states have personal property license requirements from the owner of the equipment.
It is true that there are no state or national associations that regulate the industry as banks and other financial institutions or accountants, attorneys, realtors, to name a few. The closest may be the Certified Leasing Professional Foundation where they are 200 individuals that have passed a test, an annual test, and abide by a set of rules and regulations.
In most states, banks are not required to have a leasing license as well as manufacturers. An expert on this who has won cases against company’s not licensed in California, notably CMC Commercial Credit, Tom McCurnin, Barton, Klugman & Oetting, Los Angeles, California told Leasing News: “A property owner can sell his property on credit without a license or without usury issues. Its called the Time Price Doctrine or Time Price Differential.
“CIT on the other hand doesn't own the stuff and is therefore making a loan and is required to have a license.
“A gray area might be for the leasing company to buy the stuff and have it shipped to them, and they, in turn re-ships to the customer. May not be required to have a license. Simple invoices and drop shipping probably would not pass muster.” .
In California Banks are not required to have a Financial Lender’s License. Although many follow the guidelines of only doing business with another party who has a Financial Lender’s License. Captive Lessors are required to have a license, and all those that I checked do, such as Dell, who also sells other products than the ones they manufacture.
And while there are financial institutions that also have a bank, such as CIT, they hold a license.
In California, those engaged in true leases, such as Mar Vista, Villa Park, California, do not need to be licensed, but everyone who is involved in “capital leases” with a bargain purchase option, particularly a dollar, are required to be licensed. Without it, they may not accept a commission, engage with a licensed financial institution, and may find their leases in court dismissed for lack of a license. While the fines are not very much, the clout comes in immediate suspension from doing business in California, and while a hearing may be required or filed by an attorney, they may not engage in business during this time.
“NO BROKERAGE COMMISSIONS TO UNLICENSED BROKERS. California Administrative Code Title 10 §1451.”
Commissions may not be paid to unlicensed brokers. There are companies who use other companies’ documents and therefore believe they do not need to be licensed. This may be accurate in dealing with a bank, but not with another licensed financial institution or financial institution out of state that is not licensed in California.
While the Department of Corporations does audit the licensees, about every three years, and are paid for time and travel for this requirement by the licensee, most legal enforcements are from complaints rather than a verification of every financial company who files a UCC in California or by other means, such as leasing association membership.
One of the purposes in the lists created by Leasing News was to record who has licenses and who does not. This lists are not complete as they are not solicited but come from the companies’ themselves. A requirement for the funder list is proving they are a funder of 50% of their transactions, and only after this is satisfied, are they listed.
Funders Looking for Broker business:
"Broker/Lessor" looking for broker business
Funder List “A”
Broker List “A”
Loan/Lease Statute Up-Date
This is a summary and should not be viewed as a legal interpretation or containing all the requirements. Consult an attorney with leasing experience is highly recommended.
Most states exempt banks. This is commercial business only.
Whether some states mix consumer and commercial loans today is not know, although current court cases are recognizing personal guarantees and proprietorships to fall under some consumer guidelines.
Arizona: All “advance fee loan brokers” must register annually with the state. Arizona Revised Statutes, sec. 06-1303-1310 (1996)
Alabama: A simple business, vocational, occupation license is required.
Alaska: Alaska Small Loan act does not distinguish between consumer and commercial loans, one of the reasons many leasing companies do not do business in this state. Requires a license on transactions under $25,000.
Arizona: Requires a state license not difficult to obtain to those who have applied to be on a Leasing News list.
Arkansas: All brokers of “a loan of money, a credit card or a line of credit” may not assess or collect an advance fee. In addition, all brokers must register with the Securities Commissioner, post a surety bond of $25.000 and have a net worth of $25,000. Arkansas Code Annotate sec. 23-39-401 (1995)
California: No person shall engage in the business of a finance lender or broker without obtaining a license from the Commissioner, unless a bank or conducting true “operating” leases. California Financial Code, Division 9, Chapters 1 and 3
Connecticut: Brokers of “unsecured loans” may not assess or collect an advance fee. Connecticut General Statues, sec. 369-616 (1997) A license to make small loans of under $15,000 is required. This is aimed at “retail buyers” and whether a capital lease or commercial entity is defined is not known at this time.
Delaware: License required for commercial lessors for “finance or small loan agencies.”
Florida: Brokers of a “loan of money, a credit card, line of credit or related guarantee, enhancement or collateral of any nature” may not assess or collect an advance fee. Florida Statues, Chapter 687.14 (1992)
Georgia: A broker of “loans of money, a credit card, a line of credit or related guarantee, enhancement or collateral of any kind or nature” may not assess or collect an advance fee unless such fee is for “actual services necessary to apply for the loan.” Official Code of Georgia Annotated, sec. 7- 7-1 (1992)
Idaho: No fee may be collected unless a loan is actually made. Idaho Code, sec. 26-2501 (1992)
Illinois: Code , 815 ILCS 175/15-5.03 Under the Act, a ”loan broker” means any person who, in return for a fee from any person, promises to procure a loan for any person or assist any person in procuring a loan from any third party, or who promises to consider whether or not to make a loan to any person. 815ILCS 175/15-5- 15(a)
Specifically excluded from the application of the Act, however, are (1) any bank …regulated by any service loans for the Federal National Mortgage Association… (3) any insurance producer or company authorized to do business in [Illinois], (4) any person arranging financing for the sale of the person's product, (note that this exception does not apply to any person selling someone else's product and only applies to “the” person's product, implying the exception is for the owner of the product arranging for financing), (5) any person authorized to conduct business under the Residential Mortgage License Act of 1987 and (6) any person authorized to do business in [Illinois] and regulated by the Department of Financial Institutions or the Office of Banks and Real Estate.
“In the event that the Act is violated by the broker, the Secretary of State is empowered by the statute to make investigations and examinations, suspend or evoke the broker's approval, subpoena witnesses, compel the production of books and records, order depositions and obtain temporary restraining orders and injunctions against the broker. In the vent that a violate is found, the Secretary of State may impose a fine in the amount of $10,000 for each violation and the broker shall be liable to any person damaged in the amount of tactual damages plus attorneys fees.
This appears as standard language on most states.
Iowa: A broker of loans of “money or property” may not assess or collect an advance fee except for a “bona fide third-party fee” and a broker must obtain a bond or establish a trust account and file required documents with the Commissioner or Insurance. Iowa Code, sec. 535C (1992)
Kentucky: Brokers of “a loan of money, a credit card, a line of credit or related guarantee, enhancement or collateral of any kind or nature” may not assess or collect an advance fee. Kentucky Revised Statutes Annotated, sec. 367.380 (1992)
Louisiana: A broker of loans of “money or property…whether such agreement is styled as a loan, a lease or otherwise” must obtain a surety bond or establish a trust account in the amount of $25,000. A broker may not collect an advance fee but may collect an “advance expense deposit for commercial loans” only for actual expenses incurred in obtaining the loan. Louisiana Revised Statutes Annotated, sec. 9:3574 (1993); Louisiana Revised Statutes Annotated, Sec. 51:1910 (1992)
Personal Property Lessor License required.
Minnesota: Regulated Loans License. No person “shall engage in the business” of making loans not exceeding $100,000 without first obtaining license from Commerce Division. Violation is a misdemeanor and loan is void. This will apply to “capital leases.”
Mississippi: A broker or loans of money may not assess or collect an advance fee and can be fined up to $5,000 for each violation. Mississippi Code Annotated, sec. 81-19-17 (1997)
A license is required for conditional sales contracts.
Missouri: A broker of loans of “money or property” may not assess or collect an advance fee. Missouri Revised Statues, sec. 367 300 (1992)
Montana: A person who knowingly engages in the business of a sales finance company in Montana without a license can be punished by a fine of not more than $500 and/or imprisonment of not more than six months.
Nebraska: A broker of loans of money may not assess or collect an advance fee. Nebraska Revised Statutes, sec. 45-189 (1993) Installment sales license required except for state banks and trust and loan companies regulated by Nebraska or any other state or chartered by the United States.
Nevada: Requires license for each office or other place of business, considers capital lease as loan and “lending.”
New Hampshire: Requires small loan license, whether applies to Capital Leasing not known.
New Jersey: Brokers of “loans of money” may not assess or collect an advance fee. New Jersey Rev. Statutes, sec. 17:10B (1992)
New Mexico: Currently requires Brokers/Lessors to register for Licensing under the New Mexico Mortgage loan Company or Loan Broker Act with the Financial Institutions Division of the State of New Mexico. Banks with Brick and Mortar within the State of New Mexico are exempt. Prior to licensing applicants must submit the Following:
New York: Any advance payment or deposit must go into an escrow account until a transaction proceeds. License is required to make business and commercial loans less than $50,000.
North Carolina: A broker of “loans of money or property…whether such agreement is styled as a loan, a lease or otherwise” must obtain a surety bond or establish a trust account in the amount of $25,000 and obtain a license. North Carolina General Statutes, sec. 66-106 (1992) Lenders who advance more than $1 million annually, in aggregate, in NC are exempt.
North Dakota: Brokers may not accept an advance fee unless the broker is licensed.
North Dakota Century Code, 13-04. 1-09.1 (1993)
Ohio: Department of Commerce, Division of Financial Institutions (Certificate to engage in the business of a credit services organization in accordance with the provisions of Sections 4712.01 to 4712.14 of the revised code of Ohio, subject to all the provisions thereof and to the regulations of the division.) Ohio Department of Taxation requires a "Vendor's License" under provision 5739.17 of the Revised Code (...is hereby authorized to sell tangible personal property and selected services at the retail location specified below.) This also makes the lessor responsible for all taxes with penalties for not doing so.
Ohio: No person shall engage in the business of lending amounts of $5,000 or less without a license.
South Carolina: A broker of “a loan of money, a credit card, a line of credit or related guarantee, enhancement or collateral of any kind or nature” may not assess or collect an advance fee. (South Carolina Code Annotated, sec. 34-36-10 91992) A license is required for the “business of lending in the amounts of $7,500 or less” regarding consumers. Has won cases against finance for business involving individual guarantees.
Texas: Consult an attorney familiar with Texas finance and lending laws.
Vermont: Commercial lenders and sales finance companies must obtain a license. Does not apply to true leases and leases for security (finance leases.) Does apply to Equipment Finance Agreements.
Here is a 2006 Equipment Leasing and Finance Association forum list.
### Press Release ############################
GreatAmerica Gets 2.6 Times Tenth Term Securitization
(Cedar Rapids, IA) – GreatAmerica Leasing Corporation (“GreatAmerica”) announced that it completed its 10th term securitization in the amount of $362.4 Million. The notes were issued by GreatAmerica Leasing Receivables Funding, L.L.C., a GreatAmerica wholly owned subsidiary. The bond issue was characterized by strong investor demand with orders placed for 2.6 times the amount actually issued. The placement agents of the notes were Wells Fargo Securities, BofA Merrill Lynch, with SunTrust Robinson Humphrey acting as co-manager.
We are excited to see several new investors and at the same time honored to see so many repeat fixed income investors placing their trust in us again,” said Tony Golobic, GreatAmerica Chairman of the Board and Chief Executive Officer. “Our consistent ability to enter capital markets at an attractive price helps GreatAmerica continue to serve our customers and contributes to our record of 18 years of uninterrupted growth in originations.” This transaction brings the total inception-to-date ABS (Asset Backed Securitization) term transactions to approximately $2.5 billion for GreatAmerica.
(This ad is a “trade” for the writing of this column. Opinions
Allegiant Partners Purchases Two Equipment Finance Portfolios
Allegiant Partners Incorporated recently completed two small ticket equipment leasing portfolio purchases for a total receivable balance of $5 million.
"Allegiant Partners continues to close small, relatively complex portfolio purchases. We have been able to quickly and efficiently evaluate, document and fund portfolio transactions involving independent leasing companies and bank lenders interested in selling loan positions at a discount," stated Chris Enbom, CEO of Allegiant Partners.
"We closed both transactions without legal or other expenses usually associated with portfolio purchases," added Mr. Enbom. "We continue to be on the lookout for unusual situations."
Allegiant Partners was established in 1998 as an independent equipment finance company. The company purchases equipment leases and loans of $30,000 to $275,000 from leasing syndication sources, purchasing portfolios and direct financing through its division First Star Capital.
Chris Enbom, CEO
(Leasing News provides this ad as a trade for investigations
Sales Numbers Hit a High in Latest Credit Managers' Index--but...
Combined manufacturing and Service Sectors chart
An impressive growth in sales pushed the number well into the 60s with a reading of 66.3—the highest since the recession started in 2008. Credit applications experienced the same growth, rising to 60.3 after having slipped to 58.6 in January. This number is also the highest since 2008, suggesting that companies still expect growth and are taking steps to get ready. The good news continued with dollars collected, which improved from 60.9 to 63.4. And, finally, there was good progress in the level of credit extended—an increase from 64.8 to 66.5.
These are the signs everyone has been waiting for, but they are not the signs of a fully recovered economy, observes Chris Kuehl, PhD, managing director of Armada Corporate Intelligence and NACM economic advisor.
The strongest competitor in a given market, the market leader, starts responding to anticipated demand with more capital investment, some hiring and additional marketing. That provokes the market challengers in that sector to respond in kind to maintain their edge. Right behind them are the market followers that also have to react to the moves of those in the dominant position. It is a chain reaction driven by the need to hang on to market share—a race that some companies are better positioned to enter. They are the ones that can wait for the recovery. Those that are not sitting on enough cash have no choice but to make investments and hope that the timing is right.
One of two things will happen to these companies. If the timing is right, the investment will pay off. The anticipated demand will manifest itself, and the cash flow will be there to handle the investment and credit requests. If the timing is off or if the company is forced to respond to the competition sooner than preferred, the debt soon becomes brutal and business failures ramp up. This is the signal sent by this month’s index. The two negative factors showing the biggest increase were bankruptcies (falling from 59.1 to 56) and accounts placed for collection (moving from 52.5 to 49.9). Other indicators deteriorated as well. In the end, the declines in the unfavorable factors dragged down the combined index and left the CMI flat for the month.
This part of the transition out of a recession can be the most brutal. Companies barely hanging on could survive if there is little additional pressure. Now with the competition starting to heat up, these struggling companies are left with poor options. They either just accept the loss of their market or they gamble on their ability to hang on. If they guess wrong, they get into trouble soon. It is now a matter of how patient creditors can be and the point where credit managers must really show their skill at reading businesses. If they restrict an account to reduce exposure, they strain the relationship and may lose that customer should it rebound. If they give too much and the company goes under anyway, they have lost a lot of money and could put their own company in some peril.
About the National Association of Credit Management
#### Press Release #############################
San Bernardino, California -- Adopt-a-Dog
This is a gorgeous dog with a great soul and needs someone to be her pal
* Status: Available for Adoption
China will be here:
“Come and see several of the dogs/puppies and cats/kittens currently up for adoption at BARC! Please remember BARC is a non profit organization and all our animals greatly appreciate ANY donations given. Also any monetary donations and well as adoptions are TAX DEDUCTIBLE. Hope you can join us!”
951 845 1513
Adopt-a-Pet by Leasing Co. State/City
Adopt a Pet
Google’s War on Content Farms
Judging Napa Cabernet’s Class of 2007
Lane Tanner Pinot Noir -- a 30-year history
Wine exports up 25% over '09
Napa Valley farms go higher-tech
Wine Prices by vintage
US/International Wine Events
Leasing News Wine & Spirits Page
This Day in American History
1776-Charleston, South Carolina, set up an independent government under a temporary local constitution that was to be in effect until an agreement with England could be reached. John Rutledge was chosen president on Marcy 17. The government, said to be the first independent government within the recognized borders of the colonies, successfully defended Charleston against the British army and fleet on June 28, 1776, thus freeing the South from attack for nearly three years.
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