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October 02, 2001
Headlines--- Lowest Prime Rate in Forty Years—The Fed Cuts Another Half-Point Bob Bell Has Chosen Not to Participate in the Recession Independent Leasing Associates: Is Your Small Business Leaving Money on the Table? Leasing News----Jobs Wanted—Jobs Available Postings Russell Nelson becomes Farm Credit Leasing chief credit officer China to buy 30 Boeing aircraft in $1.6 billion deal ThoughtWorks Live Deployment/ Next Gen. Asset-Level Lease Accounting System ### denotes press release _____________________________________________________________________ Not Since John F. Kennedy was President Has the Prime Rate Been This Low The Federal Reserve, faced with an economy that went from bad to worse after the terror attacks, cuts a key interest rate by a half-point, driving it down to a level not seen since 1962. The rate cut, the ninth this year, is aimed at getting consumers and businesses to spend and invest to keep the economy from becoming even weaker. Many economists are saying now is the time to bring back the Investment Tax Credit. It was under President Kennedy’s term that the investment tax credit was instituted. It was under President Nixon’s term that it was eliminated the first time. ___________________________________________________________________ Fed cuts key interest rate by half-point to lowest level since 1962 By Jeannine Aversa ASSOCIATED PRESS WASHINGTON – The Federal Reserve, faced with an economy that went from bad to worse after the terror attacks, cut a key interest rate Tuesday by a half-point, driving it down to a level not seen since 1962. The rate cut, the ninth this year, is aimed at getting consumers and businesses – whose confidence has been badly shaken by the Sept. 11 attacks – to spend and invest to keep the economy from becoming even weaker. After a closed-door meeting, Federal Reserve Chairman Alan Greenspan and his colleagues announced they were cutting the target for the federal funds rates, the interest banks charge each other on overnight loans, to 2.50 percent, the lowest level since May 1962. In response, commercial banks were expected to reduce their prime lending rates, the benchmark for millions of consumer and business loans, by a half-point to 5.50 percent, the lowest since Oct. 3, 1972, when the prime rate matched that level. On Wall Street, stocks fell slightly after the announcement. "The terrorist attacks have significantly heightened uncertainty in an economy that was already weak," the Fed's chief policy-making group, the Federal Open Market Committee, said in a statement. "Business and household spending as a consequence are being further damped," the Fed added. In the part of the Fed's statement that reflects possible future action, policy-makers maintained that their chief concern is the weak economy, leaving the door open to further interest-rate reductions. "The risks are weighted mainly toward conditions that may generate economic weakness in the foreseeable future," the Fed said. The Fed also cut its discount rate, the interest that the Fed charges to make direct loan to banks, by a half-point to 2 percent, matching the level in Nov. 6, 1958. Before the attacks, consumers, whose spending accounts for two-thirds of all economic activity, were a key force keeping the economy afloat. Much of the economy's weakness has come from businesses sharply cutting capital spending. Economists now worry that consumers will close their pocketbooks and companies will trim spending even more. In the aftermath of the attacks, consumer confidence has plunged by the largest amount since the 1991 Persian Gulf War – billions of dollars worth of business have been lost and layoffs have rocketed to a nine-year high. The Fed's last rate cut of a half-point came on Sept. 17 in a between-meetings move the morning the stock markets reopened after a four-day shutdown. The rate reductions, analysts said, probably won't prevent the economy from tipping into recession this year but they may keep a downturn from being prolonged. Given the economic fallout from the attacks, many economists believe a recession is now unavoidable. The economy, as measured by the gross domestic product, barely grew in the second quarter, expanding at a rate of just 0.3 percent, the weakest performance in more than eight years. Many analysts are predicting the second quarter will turn out to be the last quarter of economic growth this year. The Blue Chip Economic Indicators consensus expects the GDP to shrink by 0.5 percent in the July-September quarter and decline by 0.7 percent in the final three months of the year before returning to growth early next year. A recession is commonly defined as two consecutive quarters of declining GDP. And, President Bush's chief economic adviser said Tuesday there is a high probability the U.S. economy will have two consecutive quarters of negative economic growth, one of the first times a top administration official has forecast the first downturn since the last recession in 1990-91. "The short-term outlook is not good ...(but) with prudent decisions by Congress and the administration, there's every reason to believe a recovery would commence in 2002," said R. Glenn Hubbard, chairman of the Council of Economic Advisers. Even if the country does suffer a recession, most analysts are looking for a rebound at least by the second half of next year, fueled by the Fed rate cuts, tax reductions and increased government spending. The Bush administration is preparing a new economic stimulus package that will include extra spending and tax relief for individuals and businesses. --------------------------------------------------------------------------------------------------- Bob Bell Has Chosen Not to Participate in the Recession I have heard that we are in a recession. I called the lender who holds my mortgage and ask if that was a good enough reason for me not to pay make my monthly mortgage payment. They laughed. I then called GMAC and asked them if we could not make my lease payments for several months, and they connected me to the repro department. I got the same reaction from the bank that holds the note on my boat. Therefore, after careful examination of the options, we have chosen not to participate in the recession. We will have to work harder and smarter. It will be a lot like it was in 1990 when I started in the leasing business. More phone calls, more hours planning, and more of the things we do right and less of the things we do wrong. I want to apologize in advance to many leasing companies out there. Whereas in the past we were not very active in soliciting new vendors, we will probably be calling some of yours. Rest assured, however, we won't be offering points or 30 second approvals, or "if they can fog a mirror we can approve them" tactics, but we will be out there. If success is 10% inspiration and 90% perspiration, we will be sweating mightily. I wish everyone success. Bob Bell, CLP Independent Leasing Associates Helping Your Business Grow Ph: 770-844-8444 800-685-7571 Fax: 770-844-0242 ### ################ ################################## Independent Leasing Associates: Is Your Small Business Leaving Money on the Table?
ATLANTA--(BUSINESS WIRE)--Oct. 2, 2001--Small business owners throughout the country are leaving billions, with a capital B, of dollars on the IRS table. How is this possible you ask? As part of the 1996 Small Business Protection Act businesses may deduct (expense) up to $24,000 from taxable income for purchases of new equipment put in service by December 31, 2001. It's called Internal Revenue Code Section 179. Many of you are thinking, "that's great but I don't have $24,000 to spend on new equipment". You do not have to have the cash to benefit from this provision. If you borrow the money through a properly constructed lease or bank loan, you may still be able to take advantage of the deduction. Another very significant benefit often goes unnoticed. Let's say you have very little or no taxable income in your business, but you or your spouse has another job where you do have taxable income. Under the right circumstances you may still be able to deduct the equipment acquisition from your tax return if you file jointly. Below are two examples to clarify the provisions. Example 1: You own a business and your taxable income prior to taking the 179 deduction is $75,000. You need some new equipment but don't want to use your cash, as you know cash is the lifeblood of any business. You decide to go the leasing route as shown below. (A) Without Using Section 179 Using Section 179 Original Taxable Income $75,000 $75,000 New Taxable Income $75,000 $51,000 Taxes Due to Uncle Sam $15,307 $8,587 Tax Savings - 0 - $6,720 Lease Payment for 36 Mo. Lease $830 Portion of your lease paid by your tax savings: Over 8 Months. ($6,720 divided by $830 = 8.09 Months) Example 2: Using the same example above, but you had no taxable income in your business. Your spouse, however, had W2 income of $75,000. The same numbers would hold true if filed on a joint return. In either case you get the equipment your business needs and your tax savings will pay for several months of your lease payments. Think about it! Get new equipment or pay the money to the IRS. You can even structure your lease so that regular payments don't begin until next year. Bob Bell, CLP is president of Independent Leasing Associates, a full service lessor specializing in financing equipment for small and medium size businesses. He has earned the prestigious CLP (Certified Lease Professional) designation, and is on the Board of Directors of the National Association of Equipment Leasing Brokers and the non-profit CLP Foundation. For further information Phone: 800.685.7571, e-mail: bob@independentleasing.com or Web Site: http://www.independentleasing.com. (A) While this is not intended to be tax advice (you should consult your tax advisor), these examples demonstrate some of the tax-advantaged aspects of equipment leasing. CONTACT: Independent Leasing Associates Linda Ray, 770/844-8444; 800/685-7571 ### ############################# ###################################### Leasing News----Jobs Wanted
http://65.194.113.170/LeasingNews/JobPostings.htm Collector: Near Boston, MA My name is John Kenny. I have 14 years experience in leasing collections. I currently offer outsourced services to clients nationwide on a contractual, contingency basis.Email:ReceivablesMgmt@prodigy.net Credit: Portland, OR Credit professional w/ emphasis in equipment lending and securitized transactions. 12 yrs plus years exp. secured lease financing/exp. all facets of operations within major corporations. Email:ttt@hevanet.com Legal: Arlington Heights, IL I am looking for a position as an attorney within the leasing industry which will utilize my 10 years'legal and operational skills and experience.Email:robertecondon@yahoo.com Operations: San Diego, CA I have nearly 5 years experience in the app-only arena; from generating credit applications, to credit, processing & documentation, through to final funding. Looking for a growth opportunity with a stable organization in a credit/operations role.Email:jmccorman@hotmail.com Sales: Atlanta, GA Add pizzazz to your team! Highly motivated sales exec with strong relationship management and communication skills offers record of achievement and desire to succeed. Email:stsilva@msn.com Help Wanted http://65.194.113.170/LeasingNews/JobPostingsWanted.htm Sales: Tustin, CA Sales person for equipment financing company. Company has 10 years in business with a good reputation. Commission split 50% - 60%. Office supplies: Desk, Phone, Back up staff and telemarketer to assist in sales. Email:bgriffith@socalleasing.com ___________________________________________________________________ Deadline for Hotel Reservations The Association for Governmental Leasing and Finance Annual Fall Conference, November 7-9, 2001 at Loews Ventana Canyon Resort in Tucson, Arizona , Hotel Deadline reservation is this Friday, October 5. The hotel phone number is 520.299.2020 and please mention to reservations that you are with the AGL&F to receive the $229.00/night room rate. Thank you, Jorie Lagerwey Executive Assistant 202.742.2453 fax 202.833.3636 http://www.aglf.org Pacific Bell Connection I have not been getting Leasing News for over a week. What’s up? Louis Funston ( We cannot send to Pacific Bell users. Our ISP states it is a new Pacific Bell policy regarding e-mail, and we have contacted Pac Bell via our AOL e-mail and received an autoresponder that they are in receipt of our inquiry. Our ISP says Pac Bell is trying to cut its “bandwidth” and is limiting e-mail sendings. In doing so, they must have put us in a “block filter” as we cannot send even single e-mail as leasing news. editor.) ### ################## ######################### ############ Russell Nelson becomes Farm Credit Leasing chief credit officer Russell Nelson has recently accepted the newly created position of senior vice president and chief credit officer at Farm Credit Leasing (FCL). The chief credit officer is responsible for FCL’s centralized credit approval, monitoring and control processes, Special Assets, and company-wide credit policy, procedure and monitoring. Nelson now chairs the company’s Risk Management Committee and will coordinate all credit, risk and portfolio review functions. FCL’s Special Assets and Commercial Business Unit Credit departments report directly to him, and credit approvals within the company’s LeasExpress business unit also fall under Nelson’s authority. Nelson comes to FCL with 25 years of credit experience in commercial agribusiness dealing with cooperative entities throughout the country. He was most recently a vice president-team leader of the Grain/Farm Supply Division in CoBank’s Minneapolis Banking Center. He had served in that position for the past three years. Prior to that, he was a senior portfolio manager in CoBank’s Wichita and Omaha offices. Nelson attended the University of Nebraska and earned a bachelor’s degree in accounting. FCL provides equipment leasing and related services for all types of vehicles, equipment and machinery to agricultural producers, their cooperatives, rural communications and energy companies and Farm Credit System entities. It is among the nation’s 50 largest leasing companies with more than $2 billion in assets under management. FCL is part of the 85-year-old, $98 billion Farm Credit System, one of the largest and oldest cooperatives in the nation. Today, this national network of approximately 175 borrower-owned banks, associations and service corporations provides production agriculture with approximately one-quarter of its credit and financial needs. CoBank, one of seven banks in the Farm Credit System, is FCL’s majority common stockholder. With $25 billion in assets, CoBank specializes in agribusiness, ag export, rural communications and rural energy financing. AgFirst Farm Credit Bank of Columbia, S.C., owns the balance of FCL’s common stock. The other five Farm Credit Banks also have an ownership stake of preferred stock in the company. In addition to its corporate headquarters, FCL maintains 11 sales offices throughout the country. Web Site Address http://www.fcleasing.com ( courtesy of www.lessors.com ) ### ############################## ############################### ThoughtWorks, Inc. Announces Live Deployment of Next Generation Asset-Level Lease Accounting System
CHICAGOThoughtWorks, Inc., a leading custom e-business application development and integration firm today announced the live deployment of a revolutionary new back-office lease management system for Dana Commercial Credit Corporation (DCC). The new system, named "Traq-IT", commercially marketed by Seismiq, Inc., uses next generation technology to provide portfolio servicing and true accounting at the asset-level for the leasing industry. ThoughtWorks and DCC marked the event as a significant milestone in the leasing and financial services industries, since the J2EE-based, Web-enabled system goes far beyond the functionality of traditional contract-based accounting, asset management and billing systems. The Traq-IT back-office system delivers technology that essentially is missing from the leasing industry. The component-based architecture and design used by ThoughtWorks makes system enhancements easier, providing an effective long-term solution to the broader marketplace. Innovative Industry Solution "Building an asset-based system that can handle multiple business processes, changing functional requirements, external service providers, and interface with a diversified set of package applications and legacy systems is a challenge. That's why a solution of this caliber has never been built for the leasing industry. ThoughtWorks' advanced technical capabilities and extensive knowledge of the leasing industry, combined with DCC's leasing and business process expertise, were critical components in building a solution of this magnitude," said Paul Bishop, Chief Operating Officer of Dana Commercial Credit. "The successful delivery of this project fills me with great pride," said Roy Singham, President and CEO of ThoughtWorks. Singham, who has been providing services to the leasing industry for over 20 years, said the need for a truly asset-based system for lessors is exactly the kind of challenge ThoughtWorks thrives on. "The real credit belongs to the developers, analysts, architects and project managers at ThoughtWorks and DCC for their many hours of hard work during the past two years," Singham added. System Overview The component-based system uses Sun's J2EE architecture and is Web-enabled using XML. The two-year project included over 100 participants during peak iteration periods, including 50 developers. The system was developed using agile software development methodologies. Key features of the system include real-time transactions; simplified lease entry based on multiple predefined default rules; streamlined asset entry; automatic unbook/rebook functionality at the asset level; robust contract restructuring functionality; financial transaction history on accounting events; multiple payment algorithm levels, sophisticated queries; and convergence capabilities to front-end systems. This new system implementation represents the first back-office product release of Traq-IT by Seismiq. Seismiq, a company responsible for marketing and supporting customers of this new application, is focused on providing the equipment-leasing marketplace with full life cycle lease management software solutions. A second release of Traq-IT will be available in the later this year. About ThoughtWorks ThoughtWorks, Inc. ( http://www.thoughtworks.com ) is a leading provider of custom e-business application development and advanced system integration services to Global 1000 companies. ThoughtWorks delivers solutions that require sophisticated software capable of integrating advanced business functionality with a company's existing core I.T. assets. ThoughtWorks is headquartered in Chicago with offices in New York, San Francisco, Nashville, Calgary, London, and Melbourne. Founded in 1993, the company is privately held. ThoughtWorks -- The art of heavy lifting. ThoughtWorks is a registered service mark of ThoughtWorks, Inc. The art of heavy lifting is a service mark of ThoughtWorks, Inc. About Dana Commercial Credit Corporation Dana Commercial Credit (DCC), a subsidiary of Fortune 500 Dana Corporation (NYSE: DCN), is a premier provider of leasing and financing services internationally to a broad range of business customers in selected markets. DCC is known for its experienced professionals who provide customized, knowledge-based solutions and quality service. DCC received the U.S. Department of Commerce's 1996 Malcolm Baldrige National Quality award. The company's Website is http://www.dcc.com . About Seismiq Seismiq, Inc. was created to provide Web-enabled, fully automated system and application solutions for complex financial transactions. Seismiq offers full life cycle lease management software with its Linq-IT lease origination system and Traq-IT back office product. The company is headquartered in San Bruno, CA with offices in Chicago, and Mendham, NJ. To learn more about the company, please visit http://www.seismiq.com . ( courtesy of ELAonline.com ) ### #################### ################################## ######## China to buy 30 Boeing aircraft in $1.6 billion deal By Katherine Pfleger, Associated Press, WASHINGTON (AP) China has ordered 30 Boeing 737 jetliners worth approximately $1.6 billion, Boeing Co. officials said Tuesday. Boeing and Chinese officials signed the deal at a ceremony in Washington with Commerce Secretary Don Evans. The purchase, which had been negotiated for months, was scheduled to be announced weeks ago but was postponed because of the Sept. 11 terrorist attacks. The order comes at a time when the domestic airline industry is faltering due to fallout from the attacks. Boeing announced two weeks ago it will lay off up to 30,000 workers in its commercial aircraft sector because of lost business, and says the order is unlikely to change that. Still, Evans hailed the deal as ''part of what America needs now. It is part of what the world economy needs now.'' Zhang Gubao, vice chairman of China's State Development Planning Commission, said he came to the United States in part to show solidarity in the wake of the attacks. ''We will never forget our friends, particularly in times of difficulties,'' he said. ''It is our hope that this purchase will strengthen ties between the two countries.'' Boeing said China Southern Airlines is buying 20 737-800s, China Eastern Airlines is buying four 737-700s, Hainan Airlines is buying three 737-800s and Shanghai Airlines is buying two 737-800s and one 737-700. The single-aisle jets, to be delivered between 2002 and 2005, will replace older jets on domestic routes. Boeing made its first sale to China in 1972 when the country ordered 10 707s after President Nixon's visit. Chinese airlines currently operate 357 Boeing jetliners. Boeing forecasts China will need 1,764 commercial jets worth $144 billion over the next 20 years, becoming its largest market outside the United States.
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