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Monday, December 3,2001 If you appreciate our daily reports, please join a professional leasing association: http://www.leasingnews.org/links_section.htm _________________________________________________ Headlines--- Colonial Leasing/GE---"Unplugged." Implementing States Convenes In Salt Lake City eLease----Funderonline.com Alert Pros and Cons Classified Ads---Help (indirectly) History of Colonial Pacific with Comments: This week _____________________________________________________________ Colonial Leasing/GE---"Unplugged." “GE Capital is consolidating its Portland, OR based Colonial Pacific Leasing (CPL) business with its other small/mid ticket leasing business, Chicago based Office Technology Financial Services (OTFS). “After careful consideration of our existing product and service offerings against market conditions, we determined that it was important to sharpen our focus on our most strategic business customers. “We therefore regretfully inform you that we are unable to accept new submissions from your business after December 14, 2001.” News has been attempting to obtain comments since hearing this news since last Thursday. The news was all over the Internet last Thursday. It appears perhaps only as few as seven brokers will be retained out of perhaps 300. When the re-brokered business was curtailed, Steve Dunham’s operation Leasing Associates was reportedly not affected. As important, how many employees were offered to move to Chicago, Illinois? Remember when TYCO offered the top CIT personnel Tempe, Arizona. Moving your family from the lifestyle of Atlanta to Tempe may be the same contrast as from Portland, Oregon to Chicago, Illinois. When push comes to shove, the financial decision in today’s leasing job market most likely overall be viewed as more important than the emotional family ties and lifestyle. The marketplace changed after the purchase of the company by General Electric, including re-brokered business, one of the company’s mainstays. Along with Advanta, El Camino, Comdisco, Unicapital, United Capital, to mention just a few from the Leasing News List, the struggling is over. As one past president, who does not want to be “quoted” said: “The company served the broker community for years like no other company has. It was a good, long run for the brokers, lessors and employees.” From incoming United Association of Equipment Leasing President and funder, Bob Fisher, CLP: After almost 20 years in small ticket equipment finance I am constantly amazed by the industry’s ability to continuously change in an ever-challenging environment. I joined CIT/Financial Services Inc. in the early eighties and began what was the best exposure and training to equipment finance, in my opinion, the industry had to offer. Now years later many of the same customers I deal with today, others are retired, passed on or out of our industry but all are remembered. Along the way I have had the privilege to meet and work with some of the most intelligent, creative and honest professionals in the industry. As with any endeavor I have also had to deal with my share of the “dark side” of the industry. Thankfully each and every day is still as exciting and fulfilling as my first day. Some days are longer than others but always challenging! Many companies have come and gone in our industry, each with the prefect business model, only to fall prey to the changing environment, poor management or lack of capital to execute the plan. Some have disappeared due to unethical and dishonest practices. Today’s economy is clearly challenging, we see stress in almost all industries that we finance. Prudent underwriting is clearly the long-term goal. Gimmicks, dubious practices and overly aggressive business plans result in poor execution and failure. It is not pleasant to see the consolidation of Colonial Pacific to GE Chicago, but not a surprise given the present climate. As surely as we see this change evolve there are other leasing companies that will step up to replace and become leaders in the industry. The sad part is clearly the damage to a dedicated group of professionals. Our industry has a knack for rejuvenating and revitalizing itself and I suspect it will weather the current storm. As for the people who are touched both positively and negatively they will need our support and prayers. More than ever before, we must support our Professional Associations, support their programs and support their standards. We must educate the next group of 20-year professionals in the industry and lead by example. The “older” leasing professionals must clearly take a stand and be sure to provide the guidance necessary for our younger leasing professionals to be successful. History has a way of teaching strong lessons; we just seem to ignore them later. We cannot let that happen in this down economy, we must secure the future for those that follow. We must remember that we are really a family and that we need to support, educate and lead our family to success. Finally, I suggest that we all pick up the telephone today and call a fellow leasing professional, encourage them to persevere in these challenging times and offer what support we can. As the President Elect of UAEL in 2002, I invite those who do not belong to an association to join one and those who have been inactive step up and get active again! Challenges are met with action and not fear of the future! Fisher-Anderson, L.C. Bob Fisher, CLP President Jim Raeder, a former CPL customer, and while considered controversial by some, he is one of the long time proven leaders of this industry: CPLC's announcement to consolidate and focus is consistent with GE's continued attention on EPS and ROE. Over the past two years we have seen a Well-managed Colonial define their products and services, deliver them to the market as efficiently as anyone could expect, and do all that with a substantially reduced staff. I commend the entire staff of CPLC for enduring the difficulties of change attributed to an acquisition, and of course, the fallout of a ruthless economy. Thank you all for your contribution to our success and we look forward to supporting your efforts through the transition. Kit, as our industry continues to change, the necessity to strengthen the relationships between originators and lenders has clearly become the current focus. The goals of these unique disciplines have never been so closely aligned. It will be interesting to watch the relationships developed over the next 18 months. Good Leasing to you all, Jim Raeder (Leasing News is working on a story about the history of Colonial Pacific, seeking comments from the leasing industry, especially those who worked at this company. Any other comments will be appreciated, and of course, subject to our editorial policy. editor ) __________________________________________________________________ @home @home.com users---Leasing News printed the service was down by the end of Friday, which it was. There are many readers on this, including my residential location. AT&T called saying users would be getting a two-day credit for each day down. Several readers at Leasing News have already made alternate changes, although the great majority, like myself, wait to hear the new configuration numbers by telephone to re-connect. PC Direct is a good residential substitution, but the cable has been so fast, in fact, often faster than the T1 at the office. Leasing News can be sent to any e-mail address. Contact kitmenkin@leasingnews.org to subscribe. It is free. No banners or advertising. ______________________________________________________________________ Implementing States Convenes In Salt Lake City The inaugural gathering of Delegates to Governing States convened in Salt Lake City on November 28 & 29. Delegates changed the name to Implementing States [at least for now] and elected co-chairs. Tennessee Representative Matthew Kisber will serve as legislative co-chair. He is also co-chair of the National Conference of State Legislatures (NCSL) Task Force on State and Local Taxation of Telecommunications and Electronic Commerce. Utah State Tax Commissioner R. Bruce Johnson was elected executive branch co-chair. This complements his status as a leader of the Streamlined Sales Tax Project (SSTP or Project). Thus, two seasoned supporters of the SSTP process will lead the effort toward final approval of the Streamlined Sales and Use Tax Agreement (Agreement) as model legislation. Adoption of the Interstate Agreement Work on the Agreement will continue as SSTP meets in Denver on Monday, December 3 and Tuesday, December 4. The Project will pass the final draft Agreement to Implementing States following a January meeting. At that point, the final authority on the leasing definition and all other aspects of the interstate Agreement will be Implementing States. A Project meeting immediately followed by Implementing States is likely to be scheduled the third week of January with New Orleans as a possible location. However, long time observers have learned to await final announcements before issuing meeting sites and dates. Technically speaking, the multistate Agreement is effective following enactment by 5 states and the Project version has already been adopted by North Carolina, Minnesota and Wyoming. However, NCSL leaders urge other states to await issuance of model legislation by Implementing States before enacting the Agreement. Crossing the threshold of 5 states prior to Implementing States reaching consensus would be a restrained event. Although definitions and rules in the enacting states will be changed, the interstate accord implementing a new nationwide sales tax system will not be truly operative until states are in substantial compliance with model legislation approved by Delegates to Implementing States. Major industrial states are expected to wait until this model bill is issued, especially those with complex systems and local rates or bases to reconcile. Voting Procedures Delegates will act as a Committee of the Whole with each member state given one vote. Non-member states such as California and New York will not have a role. A majority vote will resolve all issues except for a three-fifths vote needed for final adoption of the complete interstate agreement. States whose voting members are undecided or equally divided shall abstain. In cases of disputes concerning the vote among a state's voting members, the co-chairs shall poll the delegation and declare the result. Implementing States will develop a process for examining the draft Agreement. Final adoption as model legislation is targeted for mid to late summer. Industries unhappy with provisions drafted by the Project will lobby Delegates to Implementing States for revisions. Those comfortable with SSTP decisions or fearing change might only be worse will petition Delegates to maintain their sections. Steering and Standing Committees were originally envisioned to handle these issues but Delegates voted instead for task forces appointed by the co-chairs. The full body will make the final determination on each section of the Agreement. Dennis Brown Public
sessions are now scheduled from mid-day Monday, December 3 through 3
PM on Tuesday, December 4. The agenda for public and closed sessions
for government
personnel are forwarded for your review. http://www.leasingnews.org/archives/costandtax.htm http://www.leasingnews.org/archives/streamlinedproject1.htm http://www.leasingnews.org/archives/streamlinedproject2.htm eLease----Funderonline.com You are absolutely correct that applications such as ours are best utilized by the captive vendor community. Especially, those companies with global presence. Large multinational banks and finance companies fit this bill as well. Yet, most if not all of our competitors built US centric applications that don't fit the requirements necessary for this market. Our story is substantially different than what you portrayed. We have had minimal VC input and the company is pretty much owned by the principals. Although we have had a much shorter lifetime, we are managing to make money in the same gloomy market place that is drowning others. We believe there are several principals reasons for this: We have been fiscally conservative right from the start, especially in our marketing budget. We are developing in a more robust but less costly platform. We have embedded 6+ years of best practices within our application gleaned from real life, global experience. We have carefully analyzed our target market. We have a realistic business plan. It doesn't take a lot of experience to realize that eCommerce applications that focus on pushing the application entry process outwards, instant credit decisions and limited document production fit only a very small segment of the total market place and that realistically, that market segment has not been doing so well for quite a few years. To be completive and attractive, eCommerce solutions must focus on ALL areas of the vertical market and must allow for the growing global economy. They must also take into account the massive integration nightmares that global players are struggling to solve. We believe our success revolves around our foresight to do just that. There will be several press releases about Funder Online in the next few months. None of them will be about what big name we hired, tons of VC money coming our way, strategic partnerships we entered in hopes of making money or cuts to our staff. Mike Cumby mike@isissystems.com VP US Operations Funder Online ------------------------------------------------------------------------------------------------ Alert Pros and Cons Leasing News has printed “Alerts” in our daily news, but there is a request to also make it a regular on the web site as we have the Bulletin Board for complaints. By percentages, it appears readers would like to keep the present policy, rather than have an “Alert” listing on the web site. Kit-- Tank you for printing our alert message. We have received 10 responses that this company is or has looked for funding. I believe by printing this alert one leasing company pulled funding off the table for Bridge Transport. So we saved one. We are pursuing a fraud case and would welcome any additional information anyone may have on this company and AKL International. Of course I agree with putting an alert section in your news letter. Thanks to all of the leasing companies that responded to M & C and I will let everyone know what happens in our pursuit for justice. John Gallo M & C Leasing Co., Inc. john@mcleasing.com 1-800-416-9080 NACM (National Assoc of Credit Management) www.nacm.org maintains an excellent searchable database through their loss prevention department. Given the potential legal issues, I would think you might want to leave this headache to someone else. Patricia T. Galich Christenson Leasing Company LLC 503-419-3541 Alert Section is a very good idea Mike Barrett Dumac Leasing Kit and all, I'd be REAL careful about using this forum as a way to disseminate information about frauds. The way that you report information makes such an activity highly risky (from a litigation standpoint). For example, in today's Leasing News, there is a fairly well-documented, dispassionate analysis of why one person thinks a particular application is suspicious. But even within that, there is language that would make a defense attorney salivate -- "bank reference was odd . . . I don't honestly know if this company is legitimate or not; I just wanted to alert you and your following of the potential dangers here. . ." And this is quite mild compared to past stuff that's been reported. I think you've been lucky that the parties referenced have really had something to hide, because if they didn't I'm certain you'd have been sued. It only takes one mistake to wipe you out. Keep in mind that use of this forum as a fraud-clearing house opens you up to charges of collusion and/or defamation. And Kit, because you state that you review everything to insure that it's fair, YOU are personally responsible for the content. If you do want such a forum, the following principles need to be followed (and based on a contract with the users): (1) only report factual information (that eliminates phrases like "odd application" or "I think it's suspicious") (2) only report historical information (not what you PLAN to do) (3) have everyone participating agree that they will make their own decisions (4) make no recommendations on what to do (5) all information should be confidential for use only by individual participants. As you may recall, the last time fraud went crazy in the industry (around 1990, I think), I worked with many leasing industry leaders while I was at the National Association of Credit Management to form the "Leasing Industry Loss Prevention Department." It seemed to be building nicely. I have not been associated with either organization for 5 years, so I have no idea how that organization is doing. Rob Lawson Publisher, Credit Today 301-421-4402 The leasing industry, by the numbers, is not active at all, except for one or two of the "giants," and they are more interested in the vendor finance information. editor ) About 18 months ago we toyed with the idea of creating an on-line database to track fraud in our industry. For a relatively small fee of about $50/month we could provide a very sophisticated on-line database as well as e-mail notification to members of high-risk activity. We had extensive talks with Proceed Technical Resources (a company owned by my brother-in-law, www.proceedtech.com) regarding development issues and costs, and it was determined that phase 1 of the project could be completed within 90 days of the start date. The key here is that Proceed will absorb the development costs if we can bring enough potential subscribers to the table. Anyone interested could come to an open roundtable meeting in Dallas to discuss and contribute to the architecture and features of the system. This could be a grass-roots effort in our industry to develop a tremendous service that is badly needed, and Proceed will absorb nearly all of the financial risk of making it successful. Proceed has developed a lot of web-based database applications including the billing application for Caprock Communications, which can be seen at https://ecare.caprock.com (view the demo). Also they recently developed the front-end of a new universal ATM system called "e-cashier" which can be seen at http://www.amstarsystems.com. The e-cashier system is currently being deployed in the City of Austin, TX in government buildings as an automated way to pay traffic fines, etc. Point is that finding a company with Proceed's expertise that is willing to develop such a system for virtually no up-front money is an opportunity that our industry can't afford to pass up. I would like to get some feedback from your readers to determine the level of interest. For something in the neighborhood of $50.00/month, members could potentially save millions in charge-offs due to fraudulent activity. I could populate the database with about 15 transactions, and I am just a small broker. Please publish this in your newsletter as I would like to get an open dialog started. David Leidy ( I hate to tell you this, David, but this is not the economy for an extra $50 a month---and it appears only a few are really interested in an "alert section" on Leasing News for "free." Let me know if you get a better response than Leasing News is apparently receiving. eidtor ) Classified Ads---Help ( indirectly ) Hey Kit, I'm happy to inform you I've secured a position here in San Diego, indirectly from your site. (I won't bore you with the details.) No need to have me up there any longer. I got 3 responses from posting on your site. Thanks for having such a great resource available for our industry. Jason McCorman Jason McCorman jmccorman@hotmail.com http://65.209.205.32/LeasingNews/JobPostings.htm http://65.209.205.32/LeasingNews/JobPostingsWanted.htm http://65.209.205.32/LeasingNews/JobPostingsOutsourcing.htm Please send to a colleague as we are trying to build our readership. We are free. No banners or advertising. The "inside news" you will not read elsewhere-----We support all non-profit leasing associations, and suggest you budget to join at least one next year.
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