Monday, November 15, 2010
Magnesium Helps Diabetics
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First Premier loses "Reps and Warrants" Case: $5.62 Million
First Premier Capital, Edina, Minnesota, was ordered to pay $5.62 million in a "representation and warranty" case regarding Equipment Acquisition Resources, Palatine, Illinois to Minnwest Capital Corporation , Minnetonka, Minnesota,(subsidiary of Minnwest Bank Metro), according to the Minneapolis/St. Paul Business Journal.
First Premier Capital also has discounted many leases with Allied Health Care Service, Orange, New Jersey.
In the MinnWest case, according to the Minneapolis/St. Paul Business Journal, the judge found that First Premier Capital did not disclose the person behind Equipment Acquisition Resources was a convicted criminal and that the entire transactions were part of an alleged Ponzi scheme. Whether this was legal misrepresentation or a violation of a “representation and warranty” agreement was not covered in the news story.
More details to appear in the next edition of Leasing News.
Affiliated Investment Group
A - City Business License | B- State License | C - Certified Leasing Professional | D - State(s) sales/use tax license |E - Named as "lessor" on 50% or more of lease contract signed. | F - Accepts sub-broker business l G -Back Room - has a dedicated back room operation
We recently agreed to be the exclusive broker services group for Alliance Commercial Capital. In addition to our normal programs, we are excited about marketing their vast array of product lines that will greatly increase our funding capability. Broker Qualify – Yes
Full List to Date:
Varion Capital Corp. Joins “Broker/Lessor” List
A - City Business License | B- State License | C - Certified Leasing Professional | D - State(s) sales/use tax license | E - Named as "lessor" on 50% or more of lease contract signed. |
“Although our market is exclusively Canada, we have in the past done some deals for US based brokers working with US based vendors selling equipment into Canada. Recently due to the current market there have been some issues with the US brokers obtaining funding for these specific transactions.
“At this moment is there a huge value for us being listed, probably not, as it is a very niche market, and we are a micro ticket funder, so opportunities are limited. However, we are a relatively young organization and one of our main challenges is exposure so we’re always looking for avenues to increase our brand recognition. In terms of immediate business to be gained, it will probably be limited, but over time as we expand across Canada, I’m sure our foray’s into the US market will become more so.”
Canadian Finance & Leasing Association
Pawnee: First Leasing Company to Report Snow this Season!
Pawnee Leasing, Fort Collins, Colorado
"We wanted to report that the first significant snow is falling this morning at Pawnee Leasing!
"All continues to go well for us. We're receiving great support from the broker community, especially following our recent expansion to $50,000 of our 14-26% "B+ Credit" product; there continues to be a strong need from our brokers as the traditional lenders remain more reserved in their credit appetite. We also expanded our long-time "Start-Up" and "B Credit" underwriting up to $35,000. While it continues to be a challenging environment we've be pleased to be able to expand our relationships with many of our brokers in 2010
"Be well and an early Happy Thanksgiving to you!"
Gary H. Souverein
Leasing Industry Help Wanted
Please see our Job Wanted section for possible new employees.
“Equipment ‘use’ ”
The understanding of how the lessee intends to use the equipment is important as well as a proper description of the leased equipment. Not only for equipment return or repossession, but for legal and tax reasons, recording that use and placing it in your lease folder so you look like a Lessor and not equipment finance. As FASB changes the rules, documentation will become more important, not less. This may not be as important as micro and small leases, but it may help, and certainly should be performed for middle market leases without question. If handled correctly, it can also be used as a marketing tool.
As our rules change and the rule makers try and find ways to separate leasing from lending they will expect us to act more like equipment owners than lien holders. In addition knowing how the lessee expects to use the equipment helps your determine your residual assumption and place good maintenance language in the lease.
Some of you are going to scoff at asking the lessee all of the equipment use question and believe it is too much work or over kill. However the impact it has on funding sources, or credit committees, makes the quality of your portfolio look professional instead of slip shod. The more you know about the equipment you lease comes from better contact with both the lessee and the vendor. This allows you to structure a better lease with more information and lowers the risk by better qualifying the collateral value against the term of the lease. Better credit decisions come from “complete” information and knowing the actual use of the equipment and qualifying that use with proper and complete documentation improves your credit function and lowers the potential for loss. You also can prevent fraud from learning more about the equipment and demonstrating this due diligence.
The kind of information you need to determine how the equipment is going to be used comes from filling out an equipment description and use form as follows:
EQUIPMENT DESCRIPTION AND USE FORM
EQUIPMENT DESCRIPTION: including: Manufacturer, Model, Serial Number, Size, Shape, Color, Purpose, and all Accessories (If multiple items please place in groups of like equipment on separate pages) If available, attach complete description to this form as schedule A
MANUFACTURER INFO: [ ] USA [ ] foreign [ ] single purpose [ ] multiple purpose [ ] current tech. [ ] new tech
How many made this year ___________ Is it a [ ] new addition [ ] replacement Does it require: [ ] attachments to function or have [ ] foreign attachments.
Spare Parts: [ ] local, [ ] out of state, [ ] foreign [ ] special order [ ] short term [ ] long term [ ] not available, Resale/release [ ] limited market [ ] broad market [ ] open market
Contact: ________________________________Ph #______________________________
LOCATION OF EQUIPMENT: (necessary for sales tax, property tax and other assessed taxes)
Street location: _______________________________________________________ ____________________________________________________________________
City: __________________County: ______________State: ________________
Contact at Location: _____________________________________Phone:_________________________
Does it [ ] stay at this location [ ] move within the State [ ] move outside the State [ ] subject to a rental Storage: [ ] inside [ ] outside [ ] protected [ ] unprotected [ ] on premises [ ] off customer’s premises [ ] remote location
EQUIPMENT USE: Describe use in terms of hours, days, years, shifts, mileage, rotations, seasons etc.
Duty Cycle: Days Per Week __ Running Hours Per Shift____ Est. Running Hours._____ Seasonal [ ] yes [ ] no
Requires: [ ] labor operator [ ] trained operator [ ] licensed operator [ ] special handling
[ ] special transportation
Requires: [ ] no installation [ ] some installation [ ] special installation [ ] expensive installation [ ] permanent installation
Requires: [ ] no dis-installation [ ] minimal dis-installation [ ] costly dis-installation
[ ] cannot be moved
Location: [ ] owned [ ] mortgaged [ ] rented [ ] term of lease_______ Mo/Yr
Anticipated useful life based on reported use____________
This form is only a generic presentation and needs to be adjusted, or changed, to fit the market you are calling on. Many of the questions are necessary for all types of equipment but as you move into data processing, medical, food processing and many others there are a series of questions that need to be asked.
I have mentioned many times that equipment inspections during the term of the lease are necessary to determine if the facts on this form have changed. It also gives you a way to contact the lessee and make a good marketing call instead of just stopping by. It would be wise to send a copy of your inspection report to the vendor to keep him informed as to the condition of the equipment. Many vendors look upon this service as an excellent reason to do business with you. You want to make sure the equipment is in good order, and being maintained properly as per the contract and your company wants to insure this. The more you know about the equipment you lease the more professional you look.
Mr. Terry Winders, CLP, has been a teacher, consultant, expert witness for the leasing industry for thirty-five years and can be reached at firstname.lastname@example.org or 502-649-0448
He invites your questions and queries.
Previous #102 Columns:
(This ad is a “trade” for the writing of this column. Opinions
Real estate, construction and land development, with large losses and noncurrent loans closed the fourth bank in Arizona and two more in Georgia to make 18 banks to fail here this year.
The 146th FDIC-insured institution to fail in the nation this year, and the fourth in Arizona was Copper Star Bank, Scottsdale, Arizona. The three branches with 47 full time employees of Copper Star Bank, Scottsdale, Arizona, were closed with Stearns Bank National Association, St. Cloud, Minnesota, to assume all of the deposits, and opened under their name on Saturday. Bank equity was minus $2.3 million.
Formed May 22, 2000, the bank has a branch in Peoria, Phoenix, and Scottsdale. Year-end the bank equity had gone from $21 million June 30, 2008 to $14.7 million 2009 and September 30, 2010 a minus $2.3 million. 2009 loss was $6.3 million and September 30,2010 loss was $17.8 million with $7.5 million in charge offs ($3.59 million in 1-4 multi-family residential property, $453,000 in other real estate loans, $451,000 in opened ended real estate loans, $1.5 million in loans nonfarm nonresidential property, and a host of other write offs. Tier 1 Risk capital was a minus 1.49%.
As of September 30, 2010, Copper Star Bank had approximately $204.0 million in total assets and $190.2 million in total deposits. Stearns Bank N.A. will pay the FDIC a premium of 1.0 percent to assume all of the deposits of Copper Star Bank. In addition to assuming all of the deposits, Stearns Bank N.A. agreed to purchase essentially all of the failed bank's assets.
The FDIC and Stearns Bank N.A. entered into a loss-share transaction on $165.2 million of Copper Star Bank's assets.
Stearns Bank N.A. will share in the losses on the asset pools covered under the loss-share agreement.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $43.6 million.
Darby Bank & Trust Co., Vidalia, Georgia was closed with Ameris Bank, Moultrie, Georgia, to acquire the banking operations, including all the deposits. Established January 1, 1927 with 141 full time employees the bank had even branches: Lyons, Pooler, 3 Savannah, 2 Vidalia.
Originally the J.F. Darby Bank as it started by J. Frank Darby, it incorporated June 22, 1934 under the name of Darby Banking Co., surviving the Great Depression.
Net equity June 30, 2009 was $43 million, December 31, 2009 $30.9 million. At year end the bank had lost $28.6 million with charge offs of $23.6 million ($15.3 million real estate, primarily construction and land devolvement of $8 million, 1-4 multifamily homes $1 million, $1.7 million secured by non arm-non residential property, and $7.9 million in commercial and industrial loans.) September 30, 2010 the income was minus $22.8 million with bank equity at $9 million after $18.2 million in charge offs $7.7 million first liens, $447,000 second liens, $735,000 5 multi-family properties, $2.79 million nonfarm nonresidential property, $1.9 million commercial and industrial loans.) Non-current loans June 30, 2010 were $69.3 million. Tier 1 Rick Capital was 1.9%.
As of September 30, 2010, Darby Bank & Trust Co. had total assets of $654.7 million and total deposits of $587.6 million.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $136.2 million.
Tifton Banking Company, Tifton, Georgia was closed with Ameris Bank, Moultrie, Georgia, to acquire the banking operations, including all the deposits. Formed October 12, 2004 they had 15 full time employees. 360 community embers lost their investment; wiped out.
Bank equity year-2009 was $12.8 million with net loss of $3.48 million due to $2.7 million in real estate loans, $611,000 loans to individuals, and $179,000 commercial and industrial loans. September 30, 2010 the bank had a $11,000 loss and the net equity had gone down to $1.75 million after charge offs of $7.5 million ($2.1 million construction and land development, $1 million secured by farmland, $1.5 million secured by first liens, $582,000 secured by second liens, $1.38 million in commercial and industrial loans plus a host of others. Tier 1 Risk capital was 1.5%
As of September 30, 2010, Tifton Banking Company had total assets of $143.7 million and total deposits of $141.6 million.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $24.6 million for Tifton Banking Company
K Capital, Baltimore, Maryland, the parent of K Bank which was closed last Friday and sold to M&T Bank, has filed bankruptcy. K Capital reported $1 million to $10 million in assets and $10 million to $50 million in liabilities in the bankruptcy filing.
Unofficial List of Problem Banks:
Tracking Bank Failures Map:
List of Bank Failures:
Top Stories---November 8—November 12
Here are the top ten stories opened by readers:
(1) Former GE execs launch Nations Equipment Finance
(2) "Evergreen" is Marlin’s Third Quarter by Christopher Menkin
(3) Evans and Leases vs. FDIC Report by Christopher Menkin
(Tie)(4) Direct Capital Takes “Chill” Out of Winter for Franchisees
(Tie)(4) Leasing News Migration
(5) Bank Beat---Small Banks Still Failing--Why?
(6) Leasing 102 by Mr. Terry Winders, CLP
(7) Southern California Leasing First on “Broker/Lessor”
(8) Placard---Ladder of Achievement
(9) Answers to:
(10) NAELB Western Regional Meeting this Weekend
ACORD 23 Insurance Documentation Web Seminar
What: Equipment Leasing and Finance Association Web Seminar: ACORD 23 Insurance Documentation – Positive changes for Equipment Lessors
When: Tuesday, November 16, 2010, 1pm-2:30pm ET
Conference Website: http://webinars.elfaonline.org/session.php?id=5109
Highlights: Some recent changes in insurance documentation for leased and financed vehicles and equipment are a significant positive change for leasing and financing companies seeking coverage on their assets. With the mid-summer release of a new "Vehicle or Equipment Certificate of Insurance" by ACORD, lessors and lenders can now gain greater certainty that all their leased and financed assets are fully protected. The new certificate has been designated as the ACORD 23 "Certificate of Insurance" by ACORD, the insurance industry's standard setting organization.
Lessors and lenders should attend this web seminar to learn why and how to change their insurance requirements in their documentation and what assurances the new ACORD 23 gives to lessors and lenders with insurable interest in covered assets. For the first time on any certificate of insurance, the ACORD 23 shows a "Lenders Loss Payable" endorsement that is available to lessors and lenders that goes far beyond the simple "Loss Payee" endorsement most lenders and lessors are familiar with. This new ACORD 23 is a culmination of changes that have been discussed for the last 3+ years between the insurance industry and representatives from the lender and lessor communities - it represents the most significant changes in insurance documentation over the last 25 years.
• Why the ACORD 23 should always be requested of customers by lessors/lenders when seeking "proof of insurance".
• How the ACORD 23 can provide lessors/lenders with real documentation for coverage in force.
• The significance of the "Lender's Loss Payable" endorsement to lessors/lenders and why it should always be required in insurance documentation.
Who Should Attend?
Learn more at http://webinars.elfaonline.org/session.php?id=5109.
Test Advantage Capital Surpasses the $100 million mark
Singapore,– Test Advantage Capital Pte. Ltd. (TAC) announces it has surpassed the $100 million of originations mark in less than two years. The company, which initiates and services individual equipment lease transactions and portfolios throughout the region, achieved this milestone ahead of schedule. This is a testament to the long-term and mutually beneficially relationships TAC maintains with its customers. As an independent equity funding source, the company is well capitalized and uniquely positioned to significantly contribute to the growth and continued success in this region.
Evan M. Bokor
“Our approach to our Asian activities is the same as the approach we employ with all of our business units, “ said Evan Bokor, President and Chief Executive Officer of Somerset Capital Group, Ltd., TAC’s parent company. We have avoided the transactional mentality common to this area and instead are dedicated to developing and nurturing long-term relationships. With the infrastructure, the funding capacity, and a well developed background to draw on, we believe that we are well positioned for long-term success in this arena, despite the current market challenges.”
Under the leadership of Adam Simon, Executive Vice President of Sales, the company has expanded its presence within the region over the past several years. Adam commented, “TAC and our entire servicing platform allow us to support our lessees and vendors throughout the Pacific Rim. I am excited to be a part of the growth and success of this group. Embracing our strategy of developing long-term business partnerships, and providing efficient administrative support around those partnerships, continues the spirit of service that built the foundation for equipment leasing.”
About Test Advantage Capital Pte. Ltd.
Fountain Partners Adds Venture Capital Veteran John Van Hooser as Managing Partner
Fountain Partners announced the addition of John Van Hooser as Managing Partner. Mr. Van Hooser joins Fountain Partners founder Tom Carter in managing its third fund, Fountain Leasing 2010 LP which is dedicated to equipment leasing needs of venture, growth and expansion stage companies. John Van Hooser brings over 15 years of venture capital and private equity experience most recently as a General Partner at M/C Venture Partners.
"I am very excited to join Fountain and to work with Tom to continue to build on the company's success," said John Van Hooser. "In my years as an equity investor, I have had first hand exposure to the challenges growth and venture stage companies face when it comes to financing meaningfully sized capital equipment purchases. In recent years I witnessed Fountain's ascension as a go-to source of equipment financing for equity sponsors and management teams in the communications sector based on its customer centric culture and ability to customize terms to fit clients' needs without requiring warrants, covenants or additional security; terms that are complimentary to existing equity and debt partners alike."
Fountain Partners has successfully invested two equipment leasing funds and is near the end of its fund raising for its third fund. Since 2006 Fountain has been exclusively focused on the needs of businesses that are generating cash losses from operations as they ramp development or expand sales rapidly. Despite the economic chaos of 2008 and 2009, Fountain has had only one surprise lease default.
"John has been a highly regarded investor not only for being astute in his business judgments but for being an individual that CEO's and other equity managers respect for his integrity, fairness and effectiveness," said Tom Carter. "The partnership is fortunate and proud to have John as a Managing Partner of its funds."
In addition to M/C Venture Partners, John Van Hooser was an investment professional at J.P. Morgan Capital and prior to that held positions at The Walt Disney Company and Bain and Company. John is a graduate of Harvard Business School and Dartmouth College. John will work from Fountain Partners' San Francisco office.
About Fountain Partners
### Press Release ##############################
Queens, New York---Adopt-a-Dog
Pet ID #: 2775971
"Sammy is 9 years old and very very lovable. He is friendly, calm and a lap dog who loves being petted and nuzzled.
"Sammy also has the cutest face/expression we've ever seen. Look at those eyes - aren't they breath-taking?
"He probably will be nicely groomed by the time you visit him but don't wait, come see this sweetheart soon
"Please contact Laurie (Angeleyes121473@aol.com) for more information about this pet."
Shelter: Animal Center of Queens
Animal Center of Queens
Adopt-a-Pet by Leasing Co. State/City
Adopt a Pet
Fitch Affirms GreatAmerica Leasing Receivables Funding 2009-1
Holiday spending boost expected
Magnesium Helps Diabetics
NFL Huddle: Football Wrap-Up
Taylor: Cowboys give fans a big surprise: they finally don't give up
The Right Call for the Cowboys at Coach: Dungy
Patriots 39, Steelers 26
Miami Dolphins' victory over Titans: As the quarterbacks turn . . .
Bears get over the hump, make Favre look over the hill
Seahawks end four-year losing streak in Arizona with 36-18 win
Smith throws for 356 yards as 49ers rally to beat Rams in OT
49ers’ game-changer: Troy Smith does what Alex Smith never did
49ers burn Rams repeatedly
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California's unemployment fund has $10.3 billion deficit
Release of 2010 Beaujolais Nouveau is Nov. 18
Hong Kong looking to be world's wine storage hub
Thinking about Thanksgiving and wine
San Mateo County panel OKs controversial winery expansion
Odd Fellows Orphanage from the 1930s transformed into winery
Wine Prices by vintage
US/International Wine Events
Leasing News Wine & Spirits Page
This Day in American History
1492 --Christopher Columbus notes first recorded reference to tobacco. His main crop was bringing slaves back to Spain, but he also introduced tobacco, first to chew, and then to smoke, addicting Europe to nicotine, which became the new world's major export, as grown and harvested by African slaves.
American Football Poem
Gold helmets shine in the sunlight.
The object is to insert the numbers in the boxes to satisfy only one condition: each row, column and 3x3 box must contain the digits 1 through 9 exactly once. What could be simpler?
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