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| October 18, 2000
Unicapital Employees---I appreciate your many e-mails and keep your fingers crossed.
El Camino Leasing,Woodland Hills, California www.elcamino.com No Longer Taking Broker Business "- El Camino Resources, a global leader in the leasing and sales of information technology products and services, has again been named to Forbes magazines annual listing of the 500 largest private companies in the United States. The list appeared in the November 30, 1998, edition of the magazine. El Camino was ranked 341st, up eight notches from its 1997 ranking of 349." 1999 Forbes Magazine El
Camino is a billion dollar company. According to several sources, Reportedly El Camino has stopped funding new business, but continue to do renewals, etc. We know for a fact they have stopped taking broker business, as we have been told this by five brokers who do business with them. Reportedly Fleet,their main bank, is in there now and off the record, I was told they are hopeful that things will be worked out. We are told the leasing company (which is still strong, and the engine for the entire enterprise) will continue, and that the bank most likely will require El Camino to drop the peripheral businesses it has wandered into over the last several years. Leasing News has reports from several brokers that this is a "good company" and has successfully funded lots of deals with brokers. I recommend you read the article, several times, " "We are not just going through another cycle, Mr. Bonnano!"
Sierra Cities Gets Hit by Fraudulent Posting It appears that SierraCities.com (BTOB) got hit with a fraudulent posting to its message board on Tuesday, Oct. 17th. The message was posted at 11:25 AM and within an hour, the volume dried up and the market cap dropped almost $10,000,000. The poster claimed to be an employee in the accounting department who had first hand knowledge of mismanagement and excessive expense accounts. However, he spelled a number of names wrong and wanted to fire employees that had left the company months ago. Another poster did some research and found that less than 12 hours before his posting to the SierraCities.com board, he posted another message to the NITE board recommending the purchase of BTOB on the basis that the company would be acquired prior to the end of the month in the price range of $6.50 and $6.75. In his other postings on the NITE board, he claimed to have insider information on stocks called MED, NITE, S.S.B. and CSGS. He also stated he would buy 250,000 shares of NITE at $57 a share--a cool stock purchase of $14,250,000. Not bad for someone who claims to work in the accounting department at SierraCities. Conclusion--anyone reading postings on stock boards should take the information with a grain of salt and do their research before selling or buying too fast. All this can be checked out by going to the Stocks section on Yahoo. Enter BTOB as the symbol and then read messages 2485, 2481, 2479 and 2476. With a little luck, the SEC will find and prosecute this fraud and stock manipulation attempt.
Thanks, "We are not just going through another cycle, Mr. Bonnano!" I think Mr. Bonnano is totally wrong if he believes this is a cycle we are going though. I have been in equipment financing since 1974 and have experienced many of the ups and downs this industry has gone through and what is happening today is not a cycle but a total restructuring. Cycles do not produce 49 lenders changing the way the do business or going out of business. An example is G.E. Capital now has the capability to do any size transaction directly with their former broker=s clients on line at their new business direct web site which can do transactions up to $20,000,000. At the same time they are consolidating their recent leasing company purchases and eliminating $12 Billion a year in overhead because they will be doing more direct business online. Brokers are going to sites like Lease2save.com and Capital.com and bidding against direct lenders. Mr. Bonnano was right about one thing, vendors and lessees are more sophisticated than ever before. Why should they go through a broker when they can go direct to every major lender in this industry except for a few. American Express is hiring direct salespeople for every city in the country and so is Advanta. When I receive my American Express bill there is an equipment financing advertisement in it. Brokers in this industry are going to end up in the same segment of the business that real estate brokers are now in, sub-prime credits. The difference is they have more sub-prime lenders. Their business dropped 47% when the lenders went online and it is probably higher than that now. What this industry needs is more lenders like Allco to handle that segment of the business that the direct lenders will not want. name withheld at sender's request
-Good Morning Kit! Here I am again... Amazed at how small of a world it is, and regretting being so damn cliche. I noticed one of the ending comments of Lament referenced an association attorney. I also noted Mr. Bonano's tone in his letter... Funny thing. I've had these discussions over and over with a number of brokers from one coast to the other. Outside of one firm out in California's mountains, they all are the same; those of us slugging through this cyclic trough wanting reassurance from our own that it isn't something that is effecting only me caused by something I did; that there is a phenomenon, and therefore, yes, it is just a cyclic variation. And so I was chatting with a friend about a thousand miles away a couple days ago. He asked me if I knew who "Broker's Lament" (BL) was. After a reflective laugh, I told him it could have been me, as much as anyone I talk to. At that point, he let me know that he was the author. BL is one of the most decent, honest, hard working, dedicated, intelligent people that I have ever known in the industry and had the pleasure to clear paper for when I sat in the funder's seat. His work was solid, his portfolio performed. He is not a newcomer that has been struck by this like a deer caught in the headlights, instead it has worn on him for a while, not being able to make sense out of funding sources' knee-jerk reactions, and confused as to why he, as a broker, is to blame. He has even toyed with the idea of getting out of the business, which would be a loss for the leasing industry, unlike many funder's people that are tied to making decisions by obsolete scoring models, the statistics of which were only directly applicable to that time in the economy from when they were correlated, along with a number of other factors. I appreciate what he said to you. I appreciate your forum that showed we are a group that has some element of cohesion. I, in my twelve to fourteen years (I don't want to say thirteen) in this business have had the unique opportunity to have seen the inner workings of a funding source, and the influences that become rules. Your readers need to know this: Don't look for logic and reasoning. You are not dealing with people who have the right economic equations to make proper statistical evaluations and can intelligently support such. You are dealing with people who panic easily, and like a heard of deer will go off in one direction or another, depending on where the crisis of the moment is - whether it is real or manufactured to avoid taking responsibility for a decision. You are dealing with people who are expected to have the knowledge, but have found it best to make policy, enforce policy, hide behind the policy and then blame the policy instead of themselves in order to not be blamed in their management's hindsight, in effort to just keep their jobs. They are not paid by performing volume added; they have a salary and get to keep it as long as they can keep out of the focus when a problem is detected. I refer to the type as pencil necked geek pencil pushers. I see them; regularly. You are dealing with a system that wants to believe that they can reduce all of the salient factors to an equation in order to cut costs, a "black box", and hire people cheap and/or few to use the box. And they have prayed to the box and slowly through the nineties they elevated that box to a deity among the banks and financial institutions, and removed the analysts and independent thought by using hindsight to crucify anyone who tried to be creative. And now they are blaming other factors for this mistake, for the decision was too recent to say it was a mistake, they might have to admit responsibility. In five to ten years now, they will laugh at the implementation of the scoring model so many staked their careers, but not yet. They would have to take responsibility. We simply need to weather this trough out. Provided we can, we will be fine and it will be business as usual. As for the folks who are telling us all of our business is going to be done by internet, I remember the pompous super funder employees who, at the ELA meeting five to ten years ago, told us we would all be swept away and that they would control all of the business. Been there, done that, just another jerk.
I know this isn't going to get into your newsletter, for a variety of reasons.
If nothing else, I am a ranting lunatic. But if you would, could you let your
readers know of the moral character of BL. Could you let your readers know that
we have, in fact, been through something like this before. And could you let your
readers know that though I do not necessarily agree with the "tech" of the 3Ts,
trust and touch are what separate us from the bankers that use models.
Best Regards, Signed Credit Applications Required to Run "Consumer Credit Reports" This is a question from a funder who will not take business via the internet and is quite concern about application taken over the internet with a signed statement from the credit giving authorization to run personal credit for the purpose of guaranteeing the lease transaction. "IF a funder is buying paper from a source who violates this rule, the Federal Trade Commission has taken the position that the knowledge of such by the funding source is equal to have committed the act themselves (holder in due course)." "I would be interested in hearing how most funding sources are approaching this, do they take it serious or are some over reacting. If they do see a problem, what innovative ideas have come forth, and what problems has this caused for their customers. Some have indicated this is a small problem because of the structure of their business. However, other lessors have indicated that compliance would be devastating to their customer service efforts to equal or exceed competition. To some degree, this is a problem for all funding sources which is why I am raising the issue." name with held at sender's request 50 Leasing Companies Major Changes American
Business Leasing ( gone ) any corrections, additions, comments will be appreciated. We are presently working on dividing the list into last twelve months and prior. To clear up any misunderstand, we have quoted Bruce Kropschot in the past about the purpose of the list, but it appears some readers thought it was his list. It is not. It was started by Sierra Cities in an internal memo to salesmen to go after the vendors and accounts of companies no longer around. It has been up-dated by your editor and readers over the last six months--editor |
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