Headlines:

 

       Studebaker Worthington Leasing Sold to State Bancorp

          LeaseExchange To Receive "Live" Pilot

             U.S. Capital, Santa Barbara, California--A Mail Box!!!

                 Efinanceworks to Return $150 Million

                   Greenspan Says Economic Downturn Isn't Over Yet, Blames

                    Manufacturing

                     Kropschot Financial Announces Completed Transactions

                        Advance Rental Controversy Continues

 

  Earthquake in NorthWest--just happened.

 

 

 

       Let the bad economic times roll, some say From home and car buyers to

 employers, slump              has its advantages By Kevin McCoy USA TODAY

 http://www.americanleasing.com/gifs/placards/lemon-lemonade.gif

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    State Bancorp, Inc. Announces the Acquisition of Studebaker Worthington

Leasing Corp.

 

 

NEW HYDE PARK, N.Y., Feb. 28 /PRNewswire/ -- The Board of Directors

 of State Bancorp, Inc. (Amex: STB), parent company of State Bank of Long

 Island, today announced the acquisition of Studebaker Worthington Leasing

 Corp. (Studebaker) in a cash for stock transaction.  Studebaker has provided

 business equipment leasing nationwide for over thirty years, specializing in

small ticket leases up to $100 thousand for computers and office equipment.

 

(LOGO:  http://www.newscom.com/cgi-bin/prnh/20000727/STBLOGO )  

 

Studebaker will operate as a subsidiary of State Bank of Long Island and will

be headed up by Kenneth Paston, a minority owner of the firm and its current

President.  Mr. Paston will also assume the additional responsibility of CEO

due to the retirement of Frederic Weiss, a founding principal of the firm. 

It is the intent of State Bank's management to retain the Studebaker name

 and all of its Jericho, New York-based staff.

 

State Bank of Long Island has provided an array of banking services to

middle market clients in the New York metropolitan area for over thirty

years. According to Thomas F. Goldrick, Chairman and CEO of State

Bancorp, Inc., "State Bank of Long Island has enjoyed a twenty year banking

 relationship with Studebaker Worthington Leasing Corp. and we are

delighted to announce this strategic alliance.  The acquisition of Studebaker

Worthington Leasing Corp. will complement State Bank's current product

offerings, including an existing strategic partnership with JCM Leasing for

 large ticket leasing services, and will provide Studebaker access to the

Bank's extensive customer base throughout the metropolitan area."  

State Bancorp, Inc. recently completed its thirtieth consecutive year of

record earnings in 2000 and this partnership with Studebaker will provide

additional diversification to the Company's traditional sources of income.

 

State Bancorp's sole subsidiary, State Bank of Long Island, the largest

 independent commercial bank headquartered in Nassau County, currently

operates full service banking offices in ten locations throughout Nassau

 and Suffolk Counties: New Hyde Park, Jericho, Oyster Bay, Rockville

Centre, Garden City South, Huntington, Hauppauge, Farmingdale, Holbrook

and East Setauket.  In addition, the Bank also maintains a lending facility

 in Jericho and has two subsidiaries based in Wilmington, Delaware,

which provide investment and balance sheet management services to the

Company. The Company maintains a World Wide Web site at

http://www.statebankofli.com with corporate, investor and branch banking

 information.

 

SOURCE  State Bancorp, Inc.

 

CO:  State Bancorp, Inc.; Studebaker Worthington Leasing Corp.

 

ST:  New York

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 THIS IS NOT AN ADVERTISEMENT---This is News, Especially for the

 Leasing Industry

 

    American Express is Offerring Free Internet Service to American Express

Card holders

          http://www.amexol.net/

   also free eMail/Customer Service/Features-----and Leasing On Line

(guess who thru? )

 

_____________________________________________________________________

   Earthquake

 

The Leasing World still turns in the NW.

However things could be a mess for a while.

My friends in offices downtown were pretty freaked out. Apparently some

folks were screaming and crying, but no reports of injury. It was a humbling

experience.

We are not used to this earthquake stuff!

Even the radio announcers were completely freaked out, it was interesting to

listen to as it started to happen.

I can only imagine how frightening it was to be in a sky scraper. Out here

in Ballard (a few minutes north of downtown) it was scary enough.

The quake seemed like it last about a minute. Plenty of time to go out into

the street and talk with the folks about it as the sidewalk and streets

rolled beneath our feet.

There were some dust clouds - hopefully from construction sights.... sirens

everywhere, many reports of power outages.

So far they tell us it was centered 12 miles NW of Olympia and it registered

about 7.0.

Things fell from shelves and lots of stuff rattled around at Kabot

Commercial Leasing.

So far we are all fine and hopefully the aftershocks if any will be few and

mild. They say it was a deep one - about 30 miles below the surface of our

planet, Earth, (for those of you who may reside on other planets), so again

hopefully the aftershocks should be few.

The lines at Kabot Commercial are troublesome - lots of busy signals.

I hope everyone else, especially my NW leasing buddies, have faired well....

slightly shaken and very stirred,

your leasing buddy,

Theresa

Kabot Commercial Leasing

Seattle USA - Earth

 

 

 

               Leasing Associations---Crying the Blues

 

 It appears interest in symposium and conferences is down, according to several

 of the non-profit leasing associations, who also report membership renewals

 have slowed down.  No one wants to go on the record about this, but they are

 crying the blues. National Association of Equipment Lease Brokers reports

 new membership is "strong."  Their Listserve is very popular. editor

 

 

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     LeaseExchange To Receive "Live" Pilot

 

We have reported that LeaseExchange has been on "auto pilot". Reportedly the

Company was for sale, but since the demise of eLease ( Primestreet ), they

have decided to start running the exchange generating deals from vendors and

 the web.  They have moved to alive/work studio on Pacific. It will simply

 be a "brokered" transaction site. As many "on line" leasing companies are also

doing, they are seeking business through the traditional methods also. The

on line leasing companies have evolved on the world wide web, finding it is

 not working well enough, and while not abandoning this aggregate funding

lease rate chart, are taking  to the telephones and the streets to drum up business.

 

 

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  U.S. Capital, Santa Barbara, California

 

I shared with you earlier our problems for one customer with 3 lease appv'ls

for 1.2MM in tractors.  That approval was 'pulled' as USCC's investor had

second thoughts and reneged on its approval.  Further attempts by USCC

 to 'syndicate' these 3 leases were not successful!  What a surprise!  When

 promises to refund the 25M in advance rentals did not happen, our

customer flew out to Santa Barbara to track them down 2 weeks ago. 

 

Bottom line: their mail address is an executive office suite for mail only. 

They are not located there.  After sweet talking the mgr regarding the purpose

of his trip, she gave him USCC's location.  This address was a concrete

block garage, on the beach, with no windows and the only access was a

remote controlled garage door for entry!  It is located behind a T-shirt &

surf board retail location in Santa Barbara.

 

After surprising one of their employees when he opened the garage door,

our customer was there over a 2 day period & finally tracked Ken Nelson

down in HI!  Ken promised to send full refund that day.  3 days later,

customer rec'd 20M and now, with my help, Ken has promised the final 5M

to be sent to customer today.

 

Our other deal in for funding for 35M was 'scheduled' to fund on 2-23-01,

but neither vendor nor our company have received monies yet.  Am continuing

follow up here via faxes & phone calls which are never answered.  Ken has

spoken to me a number of times during this saga with promises, etc, so we will

 just have to wait & see how this works out.

 

Oh, one more thing.  The manager of their mail address did volunteer that

USCC was scheduled to

move to LA around 3-1-01!! 

 

 

Name With Held

 

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       United Capital

 

I read what Paul from Capital Funding Group wrote about United funding deals

starting 3/1.  Haven't they been saying that since December?  What happened

to 1/1?  And how are they going to fund deals when all of the funders are

gone?  There is no one left there qualified to fund deals.  If I was Paul, I

wouldn't hold my breath.  You would be better off finding another funding

source. 

 

Kit, as for you not knowing Peter consider yourself lucky.  There's not much

there to know.  It's long been rumored that he was reading emails and bugging

the phones.  At least someone finally admitted that he was.

 

Keep up the good work Kit.

Anonymous

 

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Shutting Down, Efinanceworks to Return $150 Million

By David Dankwa (www.venturewire.com)

http://venturewire.net/feature.asp?sid=24213

 

NEW YORK--Efinanceworks, an investment company formed a year ago to focus on

financial services startups, said it will return nearly $150 million in

capital to its founders, General Atlantic Partners (GAP) and Capital Z

Partners, as it winds down all operations over the next 30 to 40 days. GAP

and Capital Z committed $300 million to the New York-based firm when it

launched last February.

 

Efinanceworks laid off 20 employees last Wednesday. A seven-member

transition team, which includes managing directors Doug Woodham, Kelly

McGowen, and Gary Stein, will remain to assist in transferring the firm's 13

portfolio companies to GAP and Capital Z, both of which will now take over

board seats and advisory positions at the companies. News of the shut down

first appeared in Silicon Alley Daily.

 

Mr. Woodham said Tuesday that efinanceworks decided to cease operations

because the firm felt its "infrastructure was no longer important to its

portfolio companies." He said the company's real estate, marketing, and

research services were no longer needed, and it realized that "the early

stage venture approach is less important than originally anticipated."

Efinanceworks was created to develop e-finance investments opportunities by

working with early stage entrepreneurs and in partnerships with established

financial institutions. Mr. Woodham said the firm preferred the latter.

 

Deals currently in the pipeline will be channeled to iFormation Group, a

General Atlantic Partners affiliate formed last June with Goldman Sachs and

Boston Consulting Group, whose strategy is more in line with Mr. Woodham's

preference. iFormation works with Global 2000 companies to build online

businesses based on their traditional assets. Mr. Woodham said his team will

work closely with iFormation Group over the next month in the transition,

but wouldn't comment on whether any will join the firm permanently

afterwards.

 

Efinanceworks' portfolio includes NeuVis, a developer of enterprise-level

Internet rapid application development software; Data Distilleries, which

provides analytical customer relationship management products and services;

Coverage Corp., an insurance platform; and LandersMadden, a public relations

agency that focused on business-to-business and financial services.

 

For LandersMadden founders, Maureen Landers and Machie Madden, who provided

PR services for efinanceworks and its portfolio companies, the announcement

was bittersweet. "From our perspective we're very excited because this

provides us with a direct relationship with Capital Z and General Atlantic,

as well prospective clients within their portfolio," said Ms. Landers. On

the other hand, Ms. Madden said, "it's been a really wonderful experience

working with the partners at efinanceworks."

 

 

http://www.efinanceworks.com

 

 

 

              Advanced Rental---FBI

 

I was quite pleased to see Mike's post regarding the FBI investigation of

our humble industry. I would welcome the opportunity to help the FBI nail

the "fine" individuals responsible for destroying my credibility, stealing

commission income, and stealing advance rentals from my customers. This is

my 17th year in the industry, and I am quite alarmed by the increase in

miracle overnight approvals at "low" rates for both good customers and

deadbeats! If more brokers offered their assistance, we might regain some

credibility. This is an opportunity for us to clean up our industry before

the government cleans it up for us!

 

Maybe I am unusual, but I never collect money until I have credit approval

and a complete set of documents for the Lessee to sign.

 

Doug Delack

Alternative Finance, Inc.

DDelack@USA.NET

 

 +             +         +          +

 

I was particularly intrigued by Russ Runnalls' letter on the many techniques

used to scam lessees.  I guess the more things change, the more they remain

the same.  I came into the equipment leasing industry through the commercial

finance industry in 1971.  My company made "The Great Salad Oil Swindle"

mandatory reading for newbies.  "OPM, Other People's Money" came just a

little later.  There were others, some not so public, some larger, some

smaller.  And, of course, there's always been the petty, underhanded kinds

of scams that Russ identified, that not only may someday lead to regulation,

but are simply wrong.  They take advantage of the least sophisticated

business people, the folks that work their asses off to make a living, many

of them immigrants who want the best that America has to offer, and try to

trust the way we do things here.  Blue suede shoes may not be in any more,

but if the practices that Russ identified are all that prevalent, obviously

blue suede shoe tactics still are hot.  The more things change, the more

somebody out there is bent on ripping people off the old fashion way.  I

used to know someone who once told me, "Fair is what two people agree on -

even if one of them doesn't."  The last I heard, from a mutual acquaintance,

he was still in prison.

 

Hal Horowitz

hal.horowitz@searchwest.com

 

 +            +                      +

 

    he subject of advance rents has long been a source of confusion for

Lessees.  We try and get a commitment letter signed whenever possible. 

In the proposal we call for a "commitment fee", not advance rents. 

We use all the standard language relative to when the fee is earned,

when it will be returned and both when/how it will be applied in the lease

documentation.

 

We also use a commitment fee which is less than the advance rents, and

normally a round number. 

This has helped to eliminate some of the

confusion. The Lessee can't be confused between advance rents and the

commitment fee since they are different amounts.

 

We appreciate this sort of dialoque, it's good for the industry.  Keep up

the good work.

 

Bob Russell, Pres. of NICHE Capital

brussell@nichecapital.com&gt

 

 +         +               +                   +

 

A quick question and comment on the "Advanced Rental" debate.  I agree with

Barry Marks on the agreement for advanced rentals but I think that Ken

Greene has a better description when he calls it a "commitment fee"  In my

agreement we have a clause that states that if we approve the transaction,

substantially along the terms of the proposal and the lessee refused the

approval then we "earned" the fee.  If the lessee agrees to this there

should be no question regarding the disposition of those funds. If however

we do not approve the lessee according to the terms the fee is returned to

them in full or they have the option to sign a new proposal with the amended

terms and apply the fee to that.  We only use this on larger transactions.

Our policy on smaller transactions is to return advance rentals if a

transaction falls apart.  In my experience it hasn't been worth it to retain

advance payments and then have to waste my time arguing or hiding from an

angry customer.

 

Russ Runnals also had an excellent summary of the sleazy practices engaged

in by the churn and burn application only set. He did however, forget one

important technique that was invented by Amplicon and still widely used by

most of those that they spawned.  This is the "quarterly payment quote".

Quote the customer a "monthly" payment which is calculated by quoting a

"quarterly" payment divided by three.  When the customer accepts this

unusually low payment they are informed at the time of funding that there

needs to be an adjustment because the payments will be collected quarterly.

If Russ adds this one to his list I think he will have them all covered.

 

Bob Rodi

LeaseExchange

<drlease@leasenow.com>

 

 +                +                +              +

 

        SO WHEN DID ADVANCE RENTALS BECOME A BAD THING?

 

I am a firm believer in "taking the deal off the street," but this does NOT

mean ... that I condone bait and switch tactics, keeping money when it

is not earned or, for that matter, doing anything else that requires you to

have your "Name Withheld" when you communicate with your fellow lessors.

 

When I started in leasing, we carried lease agreements in pads, inserted the

carbons, filled them out by hand, and had the customer sign them.  We

collected our advance rental check (no one knew about doc fees back then)

and told the customer that we would submit it to the credit department and

let him know when (and if) it was approved.  If we couldn't approve it, we

would send him a refund.  No problems, no hassle.

 

Then came proposal letters, doc fees, lessee fraud, ethically challenged

sales people and companies and all the rest of those things that have led

many of you to apologize for being a good businessman by taking a deposit

from a customer!

 

I STRONGLY believe that it is perfectly valid, particularly on complex

transactions, to request a deposit/commitment fee in order to work on a

deal.  This is because experience tells us that when the potential lessee

has signed a proposal and sent money, he is mentally committed to the

transaction.  No money = no commitment.

 

If he is mentally committed to the transaction, he will gladly provide

required financial information, put up with normal delays in processing and

otherwise assist you in your efforts to complete the deal for him.  Without

this commitment, his cooperation level is significantly lower AND he might

even use your approval to shop the deal to others.

 

 For this last reason, I advocate wording that clearly states that if you

are able to approve the deal under the proposed terms, your commitment fee

is earned.  Period.

 

It is important to clearly state the terms under which you are accepting

these funds.  The proposal should include the terms and conditions under

which you believe you can get the deal done together with the rate you are

quoting for the transaction.  Be sure to identify advance rental

requirements and any other fees you will be charging.  Let them know that

the deposit is applied to the advance rentals if the deal is consummated....

and by all means let them know that you will keep it if the deal does not go

through no fault of your own.

 

 By clearly stating these things, if you are able to come back with an

approval UNDER THE PROPOSED TERMS, then you have earned the

commitment fee, even if the customer does not elect to close the deal.

 I think this is fair, reasonable AND ethical.

 

 If you can't do the deal under the stated terms, he gets his money back.

If you can do it, but under different terms or at a higher rate, he is given

the choice whether or not to proceed and a new Proposal agreement is

executed.  That is not bait and switch.  That is intelligent positioning and

self protection.

 

 All of this can be accomplished in a forthright manner -- or in a sleazy

and devious manner -- depending who is doing it.  This applies to every

other aspect of our business - or anyone else's business.  Because there are

unscrupulous people in this world does not mean that we should be afraid to

honestly protect our interests.

 

 I take exception with the people who tell us that we have to be doormats to

unscrupulous customers and spend large amounts of time and money working

difficult deals in order to "protect the integrity of the industry."

Baloney.  If the customer lies, cheats or steals (that means , providing

false information or not disclosing material facts like it's used, not new

equipment)  it should cost them.  Spell this out in the proposal as well.

 

Throw the rotten apples out if you can, but don't throw out the whole barrel

with them..... and don't assume that just because someone beat you out of a

deal, he must have done something crooked.  Maybe he just outsold you.

 

Ken Goodman, CLP

Name Definitely NOT Withheld

kendg@email.msn.com

 

 

+                 +                   +

 

Russ Runnals comments are very accurate about some of the unscrupulous

practices out there. I know of three company's whose corporate design are

sophisticated deception schemes. Sadly, all three have been financially

successful, birthing many other small brokerages with the belief that crime

does pay. (I prefer sleeping well at night.) They generally prey on strong

credit companies knowing that their fine print documentation will protect

them