October 31, 2002





Classified Ads---Job Wanted

    Pictures from the Past: 1991-The Wild Kingdom of SIGs

     Correction: regarding IDS and Summit

       Debra Marshall Joins IDS as Director of Marketing

        Microfinancial 3rd Quarter a net loss of $19.6 million

         Mortgage Demand Plummets

          Key Equipment Finance Names David Angel Sr. V-P

            CapitalStream Corporate Take-Over

              Significant Consolidation Seen in Software Sector

                Swapalease.com Celebrates Two Years of Business

                  CIT Full Press Release on latest Quarter and Fiscal Year Results

                     MAEL Conference----November 7th

                      Fed's Largess Boosting Bank Numbers


   #### Denotes Press Release




Classified Ads---Job Wanted


 Credit: Los Angeles, CA

Over 15 years experience in Credit/Operations with Small Ticket and transactions up to $500,000.00. CLP, with excellent relationships with most major lenders. Email:jonbh123@earthlink.net


  Credit: Columbia, SC

Seasoned senior credit professional with 14 years experience in small ticket. Strong analytical skills, spreadsheet proficiency, all types financials, tax returns. Looking for new career in Southeast/Mid Atlantic Email:lrport2001@yahoo.com 


Credit: Hayward, CA.

Versatile/ creative senior financial executive w/extensive experience in varied areas of the commercial lending environment. Strong written/ oral skills with a results-oriented team-player attitude. Email: daveschultz9@aol.com


 Credit: Vista, CA

+15 years experience structuring, underwriting, and collecting leases to privately and publicly held companies. Creative and results oriented. Proven ability to achieve bottom-line results. Email:dkalitow@pacbell.net 

Finance: Lyndhurst, NJ

CFO w/20+ years leasing/financing. Respected by lenders/rating agencies full & fair financial reporting. Outstanding record restructuring debt. Adept at investor relations and mentoring people. Email:joemcdev@aol.com


 Finance: Orange County, CA

CFO/Controller/IT Director - 15 years experience in leasing and ABL. Experienced in: Accounting, Finance, Systems, Tax, Operations, Securitizations, etc.MBA, ELA member. Many accomplishments. Email:gosween@cox.net


for the full list:



Pictures from the Past   1991—The Wild Kingdom of SIGs



“Ring Master” C. Michael Baker, CLP, the April 17-21, WAEL Spring

Conference Chairman, introduces the “ Wild Kingdom of SIGs”—(Special

Interest Groups) during the 1991 WAEL Spring Conference.  Baker, President

 of Pacific States Leasing, Fresno, CA, was responsible for keeping three rings going with presentations from the SIGs representing Brokers, Funders, and Lessors during the four day event.  SIG chairmen pictured here are (l to 4) Lion---Funders SIG-Mike Wing, President, Fleet Credit/Denrich Leasing Group; Fox—Brokers SIG—George Davis II, President, Fortune Financial; and Bear—Lessors SIG—Rick Wilbur, President, Charter Equipment Leasing




Correction: regarding IDS and Summit. 


“On behalf of Tom Quilling and myself, I would like to submit a correction to your recent email. Tom Quilling voluntarily resigned and I voluntarily resigned after a successful job search.  I enjoy your newsletters but in this case there was an error.  Curious as to who your source was? 


                         Joseph Franco

               Address = 5421 Bryant Avenue South

                  City = Minneapolis

                 State = MN

               Zipcode = 55419

                 Phone = 612.822.9361

                   Fax = 612.824.4583`

                 Email = joseph.franco@iqfinancial.com


Cannot divulge sources. No names were mentioned in the e-mail. In view of trying to be fair to all parties, we have revised the story on line to, plus at your request, have printed your e-mail above.  For readers not familiar with the story, here is the

revised version::


Decision Systems.


This mess started two years ago this week when CFS Leasetek acquired IDS, then known as Decision  Systems ("DSI"), at one time the premier leasing software company for Monitor 100 companies. At the  time the merger was consummated the stock traded at $4.80 and the market cap was $265 million!


Today the stock trades at $0.09 and the market cap is about $5 million. So they have somehow managed to blow $260 million of their stockholders and employees(esop) funds in two short years. There's more wrong with IDS than "soft US markets".


As Paul Harvey says, "and now the rest of the story". In July 2001 Summit  offered to acquire IDS for $25 million cash. They laughed at them.  The Summit  investment bankers said "just wait", and they did.


 In Feb '02 Summit offered a stock exchange merger that would have given them Board and Management  control since the management team that started with $265 million and turned it into $5 million probably needed "tweaking". Again they laughed. In July '02, Summit offered $15 million cash and of course they again, brushing them off.. (The value of the employees ESOPs has declined from about $20 million to $400,000. and that's tragic.) The corporate investors who control the company have lost theirs too but their loss is a drop in the bucket compared to the hit taken by the loyal staff. This week Summit again offered to acquire IDS, this time of course for the market cap price

of $5 million. They're laughing! to keep from crying. Trick or treat!



( Name With Held )


  --Press Release on International Decision Systems follows



#########    ###################################################






Debra Marshall Joins IDS as Director of Marketing



International Decision Systems, Inc. (IDS) – the global leader in lease accounting and portfolio management software systems – announced today that Debra Marshall has joined the company as director of marketing to head strategic planning, brand positioning and corporate identity initiatives.


According to Jim Meinen, IDS group CEO, “Debra’s 23 years of corporate, product and agency marketing management experience will be a tremendous asset in helping implement our new Web services strategy with the introduction of new products that provide web-enabled front-end access and an open back-end lease accounting engine. She has an outstanding track record for developing marketing strategies that build brand awareness and gain market share, as well as positioning products for specific markets.”


Ms. Marshall was most recently director of communications with PLATO Learning, Inc. and chief marketing officer for VirtualFund, Inc., a manufacturer of large-format printers.



About International Decision Systems

With nearly three decades of leasing industry-specific expertise, International Decision Systems (IDS) is the global market leader in developing lease accounting and portfolio management software and services. Hundreds of independent, bank-related, captive leasing and financial services companies worldwide use IDS products and services, which include anchor products InfoLease, LeaseEnterprise and FleetWare.



InfoLease is the world's most stable, scalable and robust end-to-end equipment lease accounting software, and LeaseEnterprise is designed for small to mid size lessors who want an easy-to-use, Windows-based lease accounting and portfolio management solution that will accommodate their growing businesses. FleetWare is a comprehensive full-service vehicle-leasing and contract-management system. Companies use IDS' software to streamline, manage and automate the entire leasing life cycle, as well as to leverage the Internet's speed and flexibility for improved customer service, achieving greater internal efficiencies and closing deals faster.


In addition to its product lines, IDS also has the leasing industry's largest global consulting, implementation and technical support organizations that provide incomparable service from offices located in the United Kingdom, North America (Minneapolis), Australia (Sydney) and Southeast Asia (Singapore).



IDS' parent company, IDS Group plc, is publicly traded on the London Stock Exchange (IDGL). For additional information about International Decision Systems and IDS Group plc, visit www.idsgrp.com


############## ####################################




Microfinancial 3rd Quarter a net loss of $19.6 million



29% reduction in lease and loan revenues to $12.8 million and a 43% decline in service fee


additional allowance of $35 million is warranted


Past due balances greater than 31 days delinquent at September 30, 2002 increased to 17.2% from 17.0% last quarter.


$35 million is warranted. This additional allowance will provide for 104%


coverage of our 90-day past due accounts as compared to previous quarters which had coverage in the 50-60% range

Based upon the results for the third quarter, the company is no longer in compliance with the terms of its revolving credit facility.


                 Recent stories on MicroFinancial/Leasecomm




The headlines you see in other newspapers were supplied by the Press Release and do not reflect the full press release, let alone the real story about insiders selling $500,000 worth of stock right before Leasecomm closed down.


The  facts highlighted above are from the Microfinancial Press Release, their spin to the events, which follows:


#### ###########################################################


MicroFinancial Incorporated Announces Third Quarter 2002 Results


WALTHAM, Mass.,) -- MicroFinancial Incorporated (NYSE:MFI), a leader in Microticket leasing and finance, announced today its financial results for the third quarter and the nine months ended September 30, 2002.

Third quarter revenue for the period ended September 30, 2002 decreased 22%, or $8.8 million to $30.5 million compared to $39.3 million last year. Net income for the third quarter, before an additional provision of $35 million discussed below, was $1.4 million, or $0.11 per diluted share as compared with $3.6 million or $0.28 per diluted share in the prior year's third quarter.


 After the additional provision, earnings were a net loss of $19.6 million, or ($1.53) per diluted share. Besides the additional provision, the decline in earnings for the quarter is primarily the result of a 29% reduction in lease and loan revenues to $12.8 million and a 43% decline in service fee and other revenues to $4.4 million as compared with the third quarter ended September 30, 2001. Additionally, gross lease investment was down 7.8% or $34.4 million from the same period last year, caused in part by lower than anticipated lease origination volumes.


As part of management's ongoing analysis of its portfolio, it has determined that an additional allowance of $35 million is warranted. This additional allowance will provide for 104% coverage of our 90-day past due accounts as compared to previous quarters which had coverage in the 50-60% range. This provision will reserve against certain dealer receivables, as well as delinquent portfolio assets. In the past, dealer receivables had been offset, in some instances, against the funding of new contracts. Since we have temporarily suspended the funding of new deals we feel that the collection of these receivables will be more difficult. Although the company will continue to pursue collections on these accounts, management believes that the cost associated with the legal enforcement would outweigh the benefits realized.


Total operating expenses for the quarter before the additional provision remained relatively flat at $28 million compared to the same period in 2001. Interest expense declined 29% to $2.5 million as a result of lower debt balances of approximately $9.0 million and lower interest costs of approximately 162 basis points. Selling, General and Administrative expenses decreased $0.6 million to $10.3 million for the third quarter ended September 30, 2002 versus $10.9 million for the same period last year. The majority of the decreases are attributable to reductions in personnel related expenses and collection expenses. The provision for credit losses, before the additional provision, decreased to $9.7 million for the quarter ended September 30, 2002 from $15.1 million for the same period last year, while net charge offs decreased 17% to $9.8 million. Past due balances greater than 31 days delinquent at September 30, 2002 increased to 17.2% from 17.0% last quarter.


Revenues for the nine months ended September 30, 2002 decreased 16% to $98.8 million compared to $117.2 million during the same period in fiscal 2001. Net income for the nine months ending September 30, 2002 was $6.6 million before the additional provision. Including the additional provision, the net loss for the nine months ending September was $14.4 million versus net income of $14.2 million for the same period last year. Fully diluted earnings per share for the nine months was $0.51 before the provision. Including the additional provision, fully diluted earnings per share for the nine months was a loss of $1.12 versus a profit of $1.10 for the same period in 2001.


Based upon the results for the third quarter, the company is no longer in compliance with the terms of its revolving credit facility. Management is in the process of working with its lenders to receive a waiver for the covenant violation. Management recently announced that it is in the process of generating a plan to revise its capital structure, and business and operating strategy in order to streamline the business during these difficult economic times. The revolving credit facility was converted to a three-year term loan on September 30, 2002.






                   (In thousands, except share data)


                                         December 31,    September 30,

                                              2001             2002

                                              ----             ----


Net investment in leases and loans:

 Receivables due in installments           $399,361         $373,756

 Estimated residual value                    37,114           32,115

 Initial direct costs                         7,090            5,597

 Loans receivable                             2,248            1,911


  Advance lease payments and deposits          (287)            (130)

  Unearned income                          (104,538)         (77,900)

  Allowance for credit losses               (45,026)         (75,726)

                                           --------         --------

Net investment in leases and loans         $295,962         $259,623

Investment in service contracts              14,126           15,632

Cash and cash equivalents                     4,429            9,916

Restricted Cash                              16,216           15,362

Property and equipment, net                  16,034           11,033

Other assets                                 14,961           12,643

                                           --------         --------

   Total assets                            $361,728         $324,209

                                           ========         ========


Notes payable                              $203,053         $194,003

Subordinated notes payable                    3,262            3,262

Capitalized lease obligations                   833              593

Accounts payable                              2,517            2,475

Dividends payable                               642              641

Other liabilities                             6,182            7,166

Income taxes payable                          4,211            1,659

Deferred income taxes payable                30,472           20,131

                                           --------         --------

   Total liabilities                        251,172          229,930

                                           --------         --------

Commitments and contingencies                     -                -

Stockholders' equity:

 Preferred stock, $.01 par value;

  5,000,000 shares authorized;

  no shares issued at 12/31/01

  and 9/30/02                                     -                -

 Common stock, $.01 par value;

  25,000,000 shares authorized;

  13,410,646 shares issued at

  12/31/01 and 9/30/02                          134              134

 Additional paid-in capital                  47,723           47,723

 Retained earnings                           69,110           52,800

 Treasury stock (588,700 shares

  of common stock at 12/31/01,

  588,700 shares of common stock

  at 9/30/02), at cost                       (6,343)          (6,343)

 Notes receivable from officers

  and employees                                 (68)             (35)

                                           --------         --------

   Total stockholders' equity               110,556           94,279

                                           --------         --------

   Total liabilities and

    stockholders' equity                   $361,728         $324,209

                                           ========         ========



            (In thousands, except share and per share data)


                          For the three months    For the nine months

                                 ended                   ended

                              September 30,           September 30,

                            2001        2002        2001        2002

                            ----        ----        ----        ----


 Income on financing

  leases and loans        $18,105     $12,819     $54,897     $41,845

 Income on service

  contracts                 2,186       2,479       6,420       7,332

 Rental income              9,744       9,212      28,131      28,295

 Loss and damage waiver

  fees                      1,598       1,633       4,746       4,691

 Service fees and other     7,676       4,406      23,010      16,632

                       ----------  ----------  ----------  ----------

   Total revenues          39,309      30,549     117,204      98,795

                       ----------  ----------  ----------  ----------


 Selling general and

  administrative           10,899      10,306      33,462      34,289

 Provision for credit

  losses                   15,064      44,672      37,150      66,460

 Depreciation and

  amortization              3,618       5,713      10,700      14,203

 Interest                   3,445       2,458      11,307       7,823

                       ----------  ----------  ----------  ----------

   Total expenses          33,026      63,149      92,619     122,775

                       ----------  ----------  ----------  ----------

Income before provision

 for income taxes           6,283     (32,600)     24,585     (23,980)

Provision for income taxes  2,644     (13,042)     10,348      (9,593)

                       ----------  ----------  ----------  ----------

Net income                 $3,639    ($19,558)    $14,237    ($14,387)

                       ==========  ==========  ==========  ==========

Net income per

 common share - basic       $0.28      ($1.53)      $1.11      ($1.12)

                       ==========  ==========  ==========  ==========

Net income per

 common share - diluted     $0.28      ($1.53)      $1.10      ($1.12)

                       ==========  ==========  ==========  ==========

Weighted-average shares

 used to compute:

  Basic net income

   per share           12,825,139  12,821,946  12,775,519  12,821,946

                       ----------  ----------  ----------  ----------

  Fully diluted net

   income per share    13,094,690  12,821,946  12,988,959  12,862,105

                       ----------  ----------  ----------  ----------


MicroFinancial Inc. (NYSE: MFI), headquartered in Waltham, MA, and with additional locations in Woburn, MA and Herndon, VA, is a financial intermediary specializing in leasing and financing for products in the $500 to $10,000 range. The company has been in operation since 1986 and has been profitable each year since 1987.

Statements in this release that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as "believes," "anticipates," "expects," "views, " and similar expressions are intended to identify forward-looking statements. The Company cautions that a number of important factors could cause actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. Readers should not place undue reliance on forward-looking statements, which reflect the management's view only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. The Company cannot assure that it will be able to anticipate or respond timely to changes which could adversely affect its operating results in one or more fiscal quarters. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in the price of the Company's common stock. For a more complete description of the prominent risks and uncertainties inherent in the Company's business, see the risk factors described in documents the Company files from time to time with the Securities and Exchange Commission.




CONTACT:          MicroFinancial Incorporated

                  Richard F. Latour

                  President and CEO

                  Tel: 781-890-0177

                  Fax: 781-890-1368







Mortgage Demand Plummets




NEW YORK - U.S. mortgage applications dropped nearly 20 percent last week, a trade group said on Wednesday, but that trend could reverse this week thanks to lower rates, economists said.


The number of mortgage applications fell for the third straight week, reaching its lowest level since the week ended July 19, the Mortgage Bankers Association of America (MBA) said.


The decline in applications came even as mortgage rates fell, potentially because some consumers are waiting to see if rates drop even further before applying for mortgages, said Jade Zelnik, chief economist at Greenwich Capital Markets, Inc.


Or the decline may be linked to slowing consumer confidence, which could make consumers less inclined to make big-ticket purchases.


But mortgage applications may rise next week thanks to recent declines in rates, economists said.


The rate for a 30-year mortgage, the most popular mortgage in the United States, fell 0.20 percentage points last week to 6.01 percent.


If the Federal Reserve cuts rates in the next several months, as the market increasingly expects, rates could fall even further.




The housing sector is showing early signs of slowing.


If the trend continues, a key support of consumer spending could weaken, economists said last week.


Applications to refinance mortgages plummeted 24.1 percent last week, the sharpest drop since the week ended March 8. Applications for mortgages to buy homes fell 6.3 percent, reaching their lowest level since April.


Refinancing activity has put more money in consumers' pockets this year, which has helped to support consumer spending and the economy as a whole.


But with 30-year rates rising by over 0.35 percentage points between late September and mid-October, mortgage applications have been falling.


Since peaking in early October, the number of applications to refinance mortgages has fallen nearly 40 percent.


Home purchasing, which has also been a key source of strength in the economy, could also slow.


Consumer confidence fell in October to its lowest level in nine years, a report said on Tuesday, which could signal decreased consumer willingness to buy big ticket items like homes.




But economists are not yet saying goodbye to the housing market boom.


Applications to refinance home loans may increase this week, because mortgage rates fell last week and early this week.


Rates may fall even further if the Federal Reserve delivers more rate cuts this year, which looks increasingly probable.


Demand for refinancing has slackened for the last three weeks, but is still well above its average level for the year.


The MBA's barometer of applications for refinancing fell 24.1 percent to 4,240.4 last week. But that is still over 35 percent higher than the average level so far for 2002, which has been a year of heavy refinancing.


And consumer confidence has been declining for five months, without any appreciable impact on spending, Greenwich Capital Markets' Zelnik said. As long as 30-year mortgage rates are below 7 percent, home purchasing activity should be vigorous, she said.


The MBA's barometer of overall mortgage application activity, its Market index, fell 19.3 percent last week to 911.0. Its barometer of applications for mortgages to purchase homes fell 6.3 percent to 338.6.



################ #################################




                           NAMES DAVID I. ANGEL

                           SENIOR VICE PRESIDENT


ALBANY, N.Y.? Key Equipment Finance, one of the

nation's largest bank-affiliated equipment financing companies and an

affiliate of KeyCorp (NYSE: KEY), has announced the promotion of David I.

Angel to the position of senior vice president. As manager of leveraged

leasing for Key Equipment Finance for the past nine years, Mr. Angel has

been responsible for the origination and closing of Key's equity

investments in leveraged leases, both domestic and cross-border. These

equity investments total more than $1.5 billion in transactions with an

aggregate equipment cost in excess of $7 billion.


"Dave's consistent and skilled performance has resulted in significant

contributions to Key over the past decade," said Paul A. Larkins, president

and chief executive officer, Key Equipment Finance. "He has garnered a

great deal of respect within our industry, and his promotion to senior vice

president is in recognition of his contributions, tenure and industry



Mr. Angel joined Key Equipment Finance in 1991 as a senior credit analyst

and was named manager of leveraged leasing in 1993. Prior to joining Key,

Mr. Angel held various positions at Fleet Capital Leasing starting in 1985.

He earned his bachelor of science degree in business management from Alfred

University and holds a masters in business administration, with a

concentration in finance, from Russell Sage Graduate School.


Key Equipment Finance is an affiliate of KeyCorp (NYSE: KEY) and provides

business-to-business equipment financing solutions to businesses of many

types and sizes. They focus on four distinct markets:

·      businesses of all sizes in the U.S. (from small business to large


·      equipment manufacturers, distributors and value-added resellers


·      federal, state and local governments as well as other public sector

organizations; and

·      lease advisory services for manufacturers' captive leasing and

finance companies.

Headquartered outside Boulder, Colorado, Key Equipment Finance oversees an

$8 billion equipment portfolio with annual originations of approximately $3

billion. The company, which operates in 25 countries and employs more than

600 people worldwide, has been in the equipment financing business for

nearly 30 years. Additional information regarding Key Equipment Finance,

its products and services can be obtained online at KEFonline.com.


Cleveland-based KeyCorp is one of the nation's largest bank-based financial

services companies, with assets of approximately $83 billion. Key companies

provide investment management, retail and commercial banking, retirement,

consumer finance, and investment banking products and services to

individuals and companies throughout the United States and, for certain

businesses, internationally. The company's businesses deliver their

products and services through KeyCenters and offices; a network of

approximately 2,400 ATMs; telephone banking centers (1.800.KEY2YOU); and a

Web site, Key.com, that provides account access and financial products 24

hours a day.

                                 # # # # #


Lisa A. Miller, Corporate Development

Key Equipment Finance


P.O. Box 1865

Albany NY 12201-1865

Phone: (518) 257-8235

Fax: (518) 257-8821


############ #####################################


CapitalStream Corporate Take-Over


by Christopher Menkin


“What is John Kruse's position as I had him as vice-president of

business development.”


From: Karen Thorsen <KarenT@CapitalStream.com>

  Subject: RE: confirmation

  Date: Wed, 30 Oct 2002 13:07:09 -0800


“John Kruse, Sales Representative.”


 second e-mail


“Kevin Riegelsberger is President & CEO

“David Orren is Executive Vice President of Sales & Marketing,

“Kaveh Majoob is Vice-President of Development,

“Mike Pennell is Vice President of Marketing

“Jeff Dirks is Executive Vice President, Business Development


“thanks for checking!”


Karen Robert Thorsen

PR/Marketing Manager, CapitalStream





 All these management people worked with Kevin Riegelsberger at

Platinum/Epicor. There has not been any founders at WiredCapital since March 2001 when Riegelsberger joined the company. Ex-WiredCapital founders have told Leasing News they are not happy about the stock situation.


Stock options is the question of the hour. In essence they eliminated all the common stock. Leasing News was told that was true for both CapitalStream as well as WiredCapital and that post the acquisition then they would issue the remaining employees CapitalStream stock. It is not know if the company has awarded the stock to the employees. It is not known what happened to the preferred stock.  This is a privately held company.


October 11, a press release from CapitalStream “...announced that it has acquired WiredCapital, a provider of enterprise automation software solutions for the Commercial Finance Industry, based in Orange County, California. The combined companies will continue operating under the CapitalStream name.  Along with the acquisition, CapitalStream has raised an additional $10 million total in equity financing.”


John Kruse is one of the originals of System1 which later became CapitalStream.

The company started from developing a leasing tracking system for Jim McCommon, McCommon Leasing, Bellevue, Washington.  One of the original beta users of the system was American Leasing, Santa Clara, California.  The program became very popular with both brokers, discounters, and lessors and at one time was planned to go “seamless” with then Nation’s Credit under Jim Merrilees in Oregon over the internet.  This evolved into an internet system with scoring of credits and processing of lease transactions, at one time, utilizing the “back-end” capabilities of LeasePlus Accounting software. (For the record, John Kruse has made no comments “on” or “off the record,” and we were told not available for comment—to go through marketing). Mr. Kruse was the Top Gun Conference Chairman at the United Association of Equipment Leasing Association in San Diego, serves as a director on the board and is very popular in the leasing industry, extremely well known and highly regarded.)


“When we were first told as employees of the potential deal they called it a

Merger, with Capital Stream being the surviving name because we were

better known in the industry, “ an ex-CapitalStream employee told Leasing News.

   People at WiredCapital were not told they were being acquired till the week of the press release. In fact, several had planned to attend the Equipment Leasing

Association Conference in San Francisco.  They were surprised. They also lost

their founder stock options and other benefits, I am told.”


In its “hey day,” the Seattle based company had 130 employees, then announced

in 2001 a reduction to 90 employees; 2002, when the Stephen Campbell left the

company, it was reported to be 60 employees “as product had been developed. and

major cuts were made in the “sales force” and direction due to an effort

to go after major corporate accounts, rather than the “small” and “middle”

market place in the banking, finance, and leasing industry.


According to John Kruse, then vice-president of business development, CapitalStream,  had 56 employees and WiredCapital 23 employees, many, so taking away 26 employees leaves 53. There have been further reduction in employees, it is reported.


Thirty of the employees were reported to be “engineers” needed to write and maintain the software to service customer accounts.


The press release claimed CapitalStream was purchasing WiredCapital for

$10 million. Interesting  there is no mention of "leasing" rather only "financial institutions" this being because they are targeting beyond leasing, as it was identified early in that leasing was too small of a space. The idea being that leasing would be the spring board into the other sectors of a bank or financial institution.


"Our market research indicates that the industry has tried to solve this problem through internal systems development because a truly viable solution provider

had not yet emerged,” Riegelsberg stated in the first press release.” With the recent funding and acquisition, CapitalStream is now perfectly positioned as the leader in financial front office automation with a proven track record

of success at some of the most respected brands in banking and



In a telephone interview, Riegelsberger said the purpose of the two

software programs was to provide “solutions for businesses.”  He said

both programs could exist for the same company in different divisions

as they served “different needs.”


He was not able to elaborate.  In trying to describe the difference

between the two software approaches, Leasing News described the difference

as WiredCaptail appearing to have been designed from a mid to high ticket perspective, while CapitalStream was really a small ticket product. For instance their product does not even have the concept of a  repeat customer in it. WiredCapital tracks master credit lines, and allows  for a single customer to have multiple Master Leases, as well as if that customer is a guarantor to a different customer, it is all being tracked  to the single exposure customer. Things like that were built in from the very beginning.


CapitalStream's desktop product (Centerpoint) offered those things, but

 instead of porting that to the web, CapitalStream started over and wrote

 "FinanceCenter" which did not yet incorporate Master Lease or a Customer

 entity.  Those enhancements were under construction  and Mr. Reiselsberger

said he was not aware of this and referred any questions regarding this to “marketing.”.  An engineer who was working on the program told Leasing News the missing Customer Entity and Master Finance agreement were, indeed, on  the top of the list of "what's stopping CapitalStream from getting more big  deals."


It is true CapitalStream had major clients such as division of Textron, Bank of the

West, and WiredCapital’s latest customer was Arrow Capital of San Jose, California.


Reiselberger said his main focus was “bandwidth of the company from the investors viewpoint.”


He added that he would insure customers would either have a hosted program or

a licensed program or both, depending on the needs of the company, and it would

be possible to migrate from one to the other.  He concluded that the description of

now being able to service small customer needs to large customer needs would

be accurate as to the reason for the “merger” of both software programs.


He confirmed the company would continue to be a “front control” and would

not venture into financial accounting, “back end,” which his former company

presently offers.  They do not have a leasing accounting program, he stated,

or any accounting program to merge with CapitalStream or Wired Capital.


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Significant Consolidation Seen in Software Sector





Survey of RBC Capital Markets Software Conference Attendees



With the outlook for technology spending in the coming year expected to experience little if any growth, mergers and acquisitions of software companies will increase in the next year, according to a survey of attendees at the 2002 RBC Capital Markets Software Conference in San Francisco.


More than 600 investment professionals, venture capitalists and corporate executives heard presentations by 80 software firms at the conference that ends today.


This merger and acquisition activity will most likely occur in the security, applications and enterprise areas, the survey found. Companies such as IBM, Microsoft and Computer Associates were seen as among the most likely acquirers, respondents said.


Given their near-term outlook for the sector, it's not surprising that respondents saw at best only slight improvement in the initial public offering market for software and technology companies in the coming year, with profitability and high revenue growth being the most important factors for companies considering an IPO.


"It is clear that we are moving into a buyers' market in which private software companies can be bought at a discount," said Robert Reynolds, managing director of RBC Capital Markets. "Most of our conference attendees believe that consolidation will be a major factor in the software sector. This was further supported by the finding that private company executives and venture capitalists attending the conference overwhelmingly indicated that the most likely liquidity alternative for their nonpublic software companies was a sale, versus an IPO or recapitalization," he added.


Respondents were nearly unanimous in their belief that information technology spending in 2003 would remain unchanged, while more than two-thirds of the respondents indicated that in the current environment, government spending is important to the software industry.


Factors identified as being the most important catalysts for increased activity in the sector included an improving economy (33 percent), demonstrable return on investment (ROI) (25 percent) and the ability to leverage existing infrastructure (19 percent). The sectors identified as being the most promising over the next year or so included security, applications and enterprise software, and respondents felt that North America represented the most promising market for a sector rebound.


"We believe these survey findings support the core of our outlook for the sector over the next 12 months," said Jeff Greiner, managing director of RBC Capital Markets. "Until the economy improves, the government will continue to be an important driver for what growth does occur. And, even with an up tick in the economy, buyers will be purchasing only those applications that provide enhanced existing security and enterprise applications to make their existing infrastructure work better and more efficiently," he added.


The survey also explored the impact of a potential war with Iraq on the current business environment, with respondents evenly split between those who felt it was having little or no impact and those who believed the talk of war has had a moderately or significantly unfavorable impact on their business.


"It's clear that software companies face a challenging environment and that investors are cautious," said Neil Selfe, managing director of RBC Capital Markets. At the same time, the value represented by new technology portends growth opportunities in select areas."


RBC Capital Markets is the global brand name for the corporate and investment banking divisions of Royal Bank of Canada (NYSE:RY - News; TSX:RY - News). RBC Capital Markets offers a broad and expanding range of corporate and investment banking products and services to corporations, governments and institutions across North America and around the globe. RBC Capital Markets' in-depth industry knowledge and superior research position RBC Capital Markets to deliver the best in customized solutions for our clients through teams of top-ranked professionals worldwide. For more information, please visit www.rbccm.com.


This information is intended to provide a summary of the results of a survey of RBC Capital Markets software conference attendees and is not intended and should not be construed as an analysis that provides information reasonably sufficient upon which to base an investment decision. Readers of this press release should consult research notes and reports on the subject company and discuss the information contained therein with their salesperson or Financial Consultant prior to making any investment decision regarding the subject company.






RBC Capital Markets, Minneapolis

Dan Callahan, 612/313-1234


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Swapalease.com Celebrates Two Years of Business with Eight Consecutive Quarters of Uninterrupted Growth





Amidst Turbulent Economic Times and Hundreds of Dot Com Failures,


Cincinnati-based Swapalease.com Experiences Consistent Growth


with Increased Traffic and Business for Two Years


As Swapalease marks two years in business this month, an increasing number of consumers across the U.S. are discovering it is possible to get out of their auto leases early without incurring large financial penalties or hassle. Thanks to Swapalease (www.swapalease.com), the first and only full-service online marketplace dedicated to transferring auto leases, consumers now have an affordable, convenient option available to them as they shop for cars.


"Swapalease has exceeded our expectations in just two years," said Ron Joseph, Jr., CEO and co-founder of Swapalease. "Despite a volatile economy, we have successfully transferred over $10,000,000 of vehicles on Swapalease's online marketplace."


The most recent market data shows that of the 17 million consumers currently driving a leased vehicle, upwards of 15% of those lessees want or need to get out of their auto lease early. Thus creating a huge demand in what is developing into a needed consumer marketplace for automotive lease transfers. Swapalease has seen consistent growth over the past 24 months in both the number of consumers visiting the site and the number of auto lease listings posted at the online marketplace.


"We have over 5,000 vehicles currently listed on the site and vehicle listings from every state -- and we still feel like we are just getting warmed up," said Richard Joseph, president of Swapalease. "There are currently 17 million people driving leased vehicles, and if they want out of their lease early, we can help."


"The Swapalease concept is one that has been desperately needed by auto leasing consumers for a long time, but just didn't exist before," said Al Hearn, president of LeaseGuide, Inc. "Beyond the obvious benefits, it also provides peace of mind to people who are reluctant to lease by creating a hassle-free way to exit their lease if they ever need it."




Despite much of the "buzz" surrounding the zero percent financing in the automobile industry, market data shows that many of the consumers enter a dealership with a zero percent advertisement for purchase, yet leave in a leased vehicle. Why? Zero percent, in most cases, is only for 36 months, which yields a very high payment on most car prices. Consumers consistently opt for leases to achieve a lower monthly payment.


"Leasing will always be an important part of the retail automobile industry, and Swapalease will remain a powerful tool to those who lease," said Norm Barron, General Counsel of the Greater Cincinnati Automobile and Dealers Association (GCADA).


"Consumers' car needs are evolving constantly, and we think they will enjoy the value and flexibility Swapalease can bring to their auto leasing experience," said Ron Joseph. "Our growing customer base is evidence of the fact that we are providing a powerful new service to consumers when it comes to their automotive needs."




--  Two years in business


--  Vehicle listing from every state


--  5,000 vehicles currently live


--  Successfully transferred over $10,000,000 of vehicles


--  Featured on CNBC, New York Times, The Wall Street Journal,


Business Week and Wired


About Swapalease.com:


Based in Cincinnati, Ohio, Swapalease.com is the first and only full-service online marketplace for transferring automobile leases. Swapalease.com matches and enables transactions between lessees wanting to get out of their leases prior to the maturity date with consumers interested in taking over such leases, through a quick and easy process. Committed to providing automotive lessees the most efficient channel to transfer leases, Swapalease.com is forging relationships with financial institutions and auto dealerships in an effort to give consumers more options in acquiring their next vehicle of choice. Established in October 2000, the company's management team brings more than 50 years experience from the automotive industry. To learn more about Swapalease.com, visit www.swapalease.com, or call 1-866 Swap-Now (1-866-792-7669).




Swapalease, Inc.


Jack Langworthy, 513/381-0100, ext. 11




########### ############################################


CIT Full Press Release on latest Quarter and Fiscal Year Results


Several readers have requested that we print the full press release. It

can be obtained in entirety by going here:






You do not need our permission to quote any or all of any story in Leasing Newes.



MAEL Conference----November 7th




Register Now!!!


                                Plan To Be In Chicago November 7th, 2002 To Attend


                                          The 20th Annual Dinner Meeting

                                                     of the

                                             MidAmerica Association


                                                Equipment Lessors




                                          you won't want to miss


                      SPECIAL GUEST SPEAKER: WGN Radio personality Wes Bleed


    The MidAmerica Association of Equipment Lessors ("MAEL"), ELA s largest regional affiliate, will be hosting its 20th

    Annual Dinner Meeting at the Westin Hotel @ O'Hare in Rosemont, Illinois. Pricing for the meeting is as follows:



      Level                Special Benefits          On-line Registration  by mail,

                                                                        fax or telephone


 MAEL Members                                       $100.00            $125.00


 Non-Members                                         $145.00            $175.00


 Event Sponsor             Table for eight


                      Full Page Advertisement in

                              Program                 $1,500.00          $1,500.00


Register on-line or complete & fax the attached registration form to 312-541-1275. If you need further information or assistance, please

e-mail events@mael.org or call Melissa @ 312-541-6000.


or go here:








Fed's Largess Boosting Bank Numbers



By Peter Eavis, TheStreet.com



(Talk on “the street” is that the Feds may lower rates next week due to the drop

in consumer confidence and other indicators, such as unemployment and manufacturing.

Other factors include the drop in sales tax and revenues to state, county, and city governments. And to the cost of funds, as noted in this report from TheStreet.com. Editor)


American Express became the latest large lender to report solid-looking third-quarter earnings, which will no doubt prompt observers to marvel once again at the fundamental soundness of the American financial system despite the economic slowdown.


Investors also have been reassured by third-quarter results from Citigroup, Bank of America, Wells Fargo and Bank One. But the critical reason why financial companies haven't blown up at the bottom of this business cycle isn't primarily of their own doing: Instead, an arm of the government has enabled banks to drastically cut one of their main operating expenses.


That arm is the Federal Reserve, and the expense is the cost of the money that lenders themselves borrow. By making five cuts in the federal funds rate since the third quarter of last year, the central bank under Alan Greenspan has effectively bailed out the banks by allowing them to generate billions of extra dollars in lending income. Without the large drops in interest expense, bank profits could be flat or lower, compared with the year-ago period, and balance sheets would be showing signs of stress.


As a result, investors need to approach banks with caution. The ability of large financial institutions to stay on an even keel as the economy has soured says little about management's skill and almost nothing about the banks' true earnings power. It would be like buying Ford on a 50% drop in steel prices.


In fact, the easy money is a reason to be fearful of bank stocks over the long run, because the Fed's decision to cut the fed funds rate all the way to 1.75% has encouraged bankers to expand their loan portfolios to individuals in a binge that could one day cause nasty credit problems. But for the time being, banks are in favor, and their recent rally has much to do with rumors that Greenspan, seeing more economic weakness, will cut rates again at its policy meeting on Nov. 6.


The drop in interest costs has been stunning. But before looking at some hard numbers, a caveat: The interest expense figure is only one item in the income statement. Lower interest rates also mean lower revenue on the loans banks make.


Generally, banks' interest costs have fallen much more than the revenue they gain from making loans. For example, at Bank One and Bank of America, third-quarter interest costs fell at twice the speed of interest income from the year-earlier period.


Somehow, Citigroup's third-quarter interest expense of $5.9 billion was $2.4 billion, or 29%, below the year-ago figure. That's over three times the $690 million increase in pretax core income over the same period. Clearly, without a helping hand from the Fed, Citigroup's earnings would be a lot softer. As the table shows, only Bank of America's drop in interest expense was exceeded by the growth in pretax income.


Of course, one of the Fed's jobs is to pump liquidity into the financial system in tough times to avoid a credit crunch. But one of the unintended consequences of that policy is that banks keep on making stupid loans, as is the case with the mortgage refinancing boom right now.


When credit problems for retail borrowers surface, the market will start demanding that banks borrow at much higher rates. And that's when interest costs soar no matter what the Fed does.

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