ELFA Equipment Leasing & Finance -Nov/Dec 2012 : Page 14
Meet the ELFA Members Membership surge adds strength, diversity and segment expertise By SuSan L. HodgeS new Industry assocIatIons exIst to serve theIr members. But often it is the members themselves who bring the most value. Afire with ideas, exploding with questions, members—and new additions to their number—are the pistons that power their as-sociation—and the engine of industry innovation. Over the past year, ELFA has been strengthened with new members of its own—more than 70, in fact. Already the energy and talent these companies bring to bear can be felt through-out the organization. To give you a more specific sense of these firms and what they do, however, Equipment Leasing & Finance magazine profiled five new member companies we believe to be representative. So read on—and start getting to know some of your newest associates. 14 NOVEMBER/DECEMBER 2012 Equipm Ent LEasing & Financ E magazinE
Meet the New ELFA Members
Susan L. Hodges
Membership surge adds strength, diversity and segment expertise
INDUSTRY ASSOCIATIONS EXIST TO SERVE THEIR MEMBERS. But often it is the members themselves who bring the most value. Afire with ideas, exploding with questions, members—and new additions to their number—are the pistons that power their association—and the engine of industry innovation.
Over the past year, ELFA has been strengthened with new members of its own—more than 70, in fact. Already the energy and talent these companies bring to bear can be felt throughout the organization. To give you a more specific sense of these firms and what they do, however, Equipment Leasing & Finance magazine profiled five new member companies we believe to be representative. So read on—and start getting to know some of your newest associates.
Pawnee Leasing Corporation
Fort Collins, Colorado
Not only did this 30-year-old leasing firm survive the “Great Recession,” it did so with enough conviction and ingenuity to make your skin tingle. Listen to Gary Souverein, Pawnee’s President and Chief Operating Officer:
“We’ve always been a leader in the third-party channel of our market niche of small-ticket start-up business and B/C credit. But heading into the recession, we saw irrational behavior from our competition. The nature of our portfolio also was telling us earlier than most lenders knew that trouble was ahead. Traditional funding sources were drifting down in credit quality but undercharging for the risk. We think they didn’t fully appreciate those risks.”
Management at Pawnee understood the risks only too well, however, and in light of inadequate pricing by competitors and rising delinquency in its own portfolio, threw the company into reverse. Pawnee began thinning its business in late 2006—and continued that approach for 24 consecutive months. “We couldn’t get the pricing we needed and we saw challenges emerging in our portfolio, so we contracted while almost everyone else kept growing—until the disruption of markets in 2008,” says Souverein. “Looking back,” he adds, “it seems our decision was a good one. We’ve emerged a much stronger and broader market participant, post recession.”
The largest subsidiary of Chesswood Group Limited, a Canadian company traded on the Toronto Stock Exchange, Pawnee Leasing is a generalist, leasing title vehicles and equipment needed in the construction, food service, landscaping and small-manufacturing industries. Typical lessees are small, closely held businesses with modest revenues. “We typically finance $1,000 to $50,000 lease transactions,” says Souverein. “We’re not as sexy as some who do complex, large, international transactions, but it’s a great business for our employees and our customers—and it has served Chesswood’s shareholders very well.”
Pawnee limits its business to the contiguous United States, notwithstanding its Canadian ownership, and receives 100% of transactions from independent lease brokers and other finance companies. Core markets include startups and younger or B/C-class credits. “We do transactions with pricing and risks that others are unwilling to do,” says Souverein. “We also fully administer all of our leases.”
Through ELFA membership, Pawnee Leasing expects to benefit from the studies and periodicals for which the association is known. Company leaders also hope to network and expand Pawnee’s exposure to other channels and opportunities in equipment finance.
Eastern Funding LLC
New York, New York
Often at the root of successful finance firms are opportunities others failed to notice. Michael Fanger saw such an opportunity while working for Medallion Funding, a New York City-based company that financed taxi cab medallions under the Minority Enterprise Investment Program. Eastern Funding LLC, a multiline commercial entity, of which Fanger is Managing Member and President, is the result.
“Medallion Funding had what I felt was an outstanding business model,” says Fanger. “They made the same type of loan over and over and used the same documents repeatedly. I’d been a banker, and I saw all these businesses in New York that were low-tech, basic and provided services that people needed every day.”
Fanger thought a model similar to Medallion’s could be used to finance equipment for many of these businesses. After researching the idea and talking with his father, who had owned a finance business in Massachusetts, Fanger opened Eastern Funding in 1997. Its focus: lending to coin laundries, dry cleaners and convenience stores. “I like to view us as a community bank, organized not so much by geography but by industry,” he says. “We’re not currently taking deposits, but over time we may even more closely resemble a community bank.”
Eastern Funding seeks to finance multistore operations, providing loans for refinancing, acquisitions, new equipment and real estate. The company has funded more than $750 million in transactions since its inception and, amid 15th anniversary celebrations this past April, launched its Specialty Vehicle & Equipment Funding Division. The division provides lending, leasing and direct-financing programs nationally for businesses specializing in towing and recovery vehicles, commercial school buses and transportation equipment.
“Coming back to ELFA is overdue,” says Fanger. “We participated in [other] trade groups that are industry specific to the assets we finance. But now that the company has grown, we’re starting in specialty vehicles, and there’s an education gap.”
Fanger wants to attend a number of seminars at ELFA conferences. He’s also interested in supporting the equipment leasing and finance industry. “As we’ve grown, we’ve benefited,” he says. “We want to give back.”
Alliance Partners, LLC
Chevy Chase, Maryland
Big banks tend to overshadow small ones in equipment leasing and finance, but that trend could change, given an initiative begun by Alliance Partners.
Six months ago, Alliance Partners opened an equipment finance division to serve the 73 members of its cooperative, BancAlliance. Members are community and smaller regional banks across the United States. The idea: to find, analyze and post transactions in which co-op members may wish to participate on a members-only web page. Jay Squiers, Managing Director of Equipment Finance, says response has been tremendous. “Cooperative members told us they want to see equipment loans as part of their portfolios, and they’ve really stepped up,” he says.
Finance and banking professionals themselves, the founders of Alliance Partners have identified certain needs among community banks, such as diversification of lending portfolios and expansion beyond a local footprint in real estate. To help BancAlliance members fill both needs, Alliance Partners performs underwriting on each prospective transaction and then provides full disclosure, including a written analysis and background data on the transaction. The package is then posted to member banks, which use the information to do their own underwriting and decide whether or not to participate in the deal. “This two-step process sounds a bit complicated, but it seems to work quite well,” says Squiers. “If we hit a bank’s sweet spot, it can react very quickly.”
Focus is on upper-middle and large-ticket transactions, mainly in transportation, marine and energy services. “But we have a broad mandate for all types of equipment,” says Squiers. “Over half of our members are now looking at current loans.”
“The idea was to create a program that belongs to the banks,” adds Lori Bettinger, head of BancAlliance membership. The network’s board has 11 directors, nine of whom are from member banks. “The board sets credit policies and gives direction on asset types and typical yields,” she says, “so we don’t originate loans in a vacuum.”
Equipment financed is not speculative, but essential use. “As a lender, that’s what you want to see,” says Squiers. “Essential use increases the probability of getting paid.”
Alliance Partners also focuses on the regulatory environment of its co-op members, thus, the company’s decision to join ELFA. “We see ELFA as an invaluable source of information on the regulatory/political side and as an advocate,” says Squiers. “We have executives with experience on the regulatory side, so we understand those needs. Joining ELFA shows we know they are important.”
Lenovo Financial Services
Rochester, New York
In return for the professional networking, sharing of best practices and learning about new business models that can characterize membership in ELFA, leaders of this global IT captive firm hope to bring a new perspective. “Lenovo has a culture of personal ownership,” explains Diane Croessmann, Executive Director of Lenovo Financial Services. “Rather than a completely top-down approach to setting goals, it starts with the employee’s commitment: ‘Tell me what you’re going to do, and then go do it,’ ” she says. “It’s a wonderful change.”
Other differences in perspective concern the perceived future of IT finance. As leasing emphasis potentially morphs from hardware to services, and as changes in global lease-accounting standards come to bear, says Croessmann, Lenovo Financial Services believes more IT customers will consider a blended services model. “Lenovo is not just a strong worldwide hardware vendor,” she says. “We have the ability to combine hardware, software, comprehensive services and financing into a bundled services contract. As customers potentially move to this type of financing, I think we can be a source of intelligence to study customer financing behaviors.”
Lenovo Financial Services is prepared to finance entire technology solutions. Hardware, software, services, installation costs, training fees and sales tax all can be bundled into a single transaction served by a single monthly invoice. The company supports a variety of financial products serving customers in more than 40 countries.
Meanwhile, the company is looking to grow as a member of ELFA. “The association has an immense amount of information and resources that we can tap into, and I truly believe membership will help us,” says Croessmann. “There’s value to being part of an industry constituency, and we look forward to it.”
Pentax Medical Company
Montvale, New Jersey
The Pentax name and that of its parent organization, Hoya Group of Japan, have long been associated with quality optical lenses. Now Pentax Medical, a global leader in the manufacture of medical endoscopes, plans to use equipment leasing and finance to further grow its business.
Gary Weiss is Director of Leasing at this Hoya subsidiary. He says Pentax Medical expects to refine its existing third-party relationships, enhance leasing and finance products and service capabilities and over time build in-house infrastructure to do more for its customers and foster incremental equipment sales and service. “I’m excited about the possibilities,” says Weiss. “Pentax Medical is now investing in leasing expertise, and we look forward to advancing this part of our business and perhaps taking it in some new directions.”
Pentax Medical represents a major segment of Hoya Group’s growth plan in the life sciences area. Users of Pentax Medical’s products—which include scopes for examining gastrointestinal tracts, lungs, ears, noses and throats—range from large institutional hospitals to ambulatory centers and physician practices. The company’s global network extends not only to the United States, but also to Canada, Europe, Asia, Australia and Latin America. Two Pentax endoscopy training centers that opened recently in Ecuador and Argentina represent a partnership with the World Endoscopy Organization, founded to advance gastroenterological patient care and develop underserved countries. The centers are part of OMNI Hospital in Guayaquil, Ecuador, and the Hospital Italiano de Buenos Aires in Buenos Aires, Argentina.
Along with growth, however, comes a quest for more learning. “If you look at ELFA, you see a lot of healthcare finance expertise that we should be tapping into,” says Weiss. “We want to learn from software providers about infrastructure in portfolio management and systems enhancements to improve documentation. We also hope to learn from ELFA’s roundtables on healthcare and captive financing issues.”
For Weiss, Pentax Medical’s membership in the association has an additional meaning. “This is kind of a homecoming for me,” he says. “My background is in vendor-oriented finance programs, and, after a hiatus in aviation financing, a return to the ELFA crowd has me looking forward to seeing former colleagues.”
Susan Hodges writes about equipment finance and other business topics from her office in Evanston, Ill.
2012 NEW MEMBERS
ELFA is pleased to welcome the following member companies that joined the association as of Nov. 1:
Alliance Partners, LLC
Alvarez & Marsal Valuation Services, LLC
American Capital Group, Inc.
Arrow Capital Solutions
B of I Federal Bank
Bank of Birmingham
BBVA Compass Equipment Finance
BMO Harris Bank
Bridge Capital Leasing Inc.
Brocade Communications Systems, Inc.
CBRE Group, Inc.
Central Leasing Corporation
CFG Community Bank
CMB Financial Leasing Corporation Limited
Cole Taylor Equipment Finance
Cortview Capital Securities LLC
CSC Leasing Company
D & D Leasing UK
Dooling Lease Management Corp.
Eastern Funding LLC
Element Financial Corporation
Elm City Capital, LLC
Evergreen Resources LLC
Federal Deposit Insurance Corporation
First National Bank of St. Louis
Fleet Financing Resources
Global Financial & Remarketing Services
GreenRock Capital Company
Hilco Industrial, LLC
Jet Midwest Group
K2 Capital Group LLC
KBC Bank, N.V.
Kessler & Collins, PC
King Commercial Finance LLC
Lam, Lyn & Philip PC
Lenovo Financial Services
Leyh, Payne & Mallia PLLC
Manufacturers Capital LLC
Mayer Brown LLP
McKinsey & Company
Moss Adams LLP
NetApp Capital Solutions
Northland Networks, Inc.
Orchard Holdings Group, LLC
Park Western Leasing, Inc.
Pawnee Leasing Corporation
Pentax Medical Company
Roetzel & Andress
Sage Capital Recovery
Schneider Finance, Inc.
Securcor Financial Group
Thermo Fisher Financial Services
Thompson Auctioneers, Inc.
Travelers Financial Group
Washington Federal Equipment Finance
Wheeler Business Consulting, LLC
Wintrust Equipment Finance,
division of Beverly Bank
Wright Law Group, PLLC
YESCO Financial Solutions
Kudos to the Membership Committee
More than 70 companies joined ELFA in 2012, marking the most successful membership recruitment year in recent history. The ELFA Membership Committee worked closely with Membership Director Kesha Robinson throughout the year to identify and recruit prospects for membership. Many thanks to the 2012 committee for its very successful efforts:
Lauren Hill, Chair, Alvarez & Marsal Valuation Services
Linda Altamirano, Leasing Professional
Michael DiCecco, Huntington Equipment Finance
Dawn Gillette, Direct Capital Corporation
Wayne Leo, Banc of America Leasing
Curt Lysne, Portfolio Financial Servicing Company
Zack Marsh, Orion First Financial
Deborah Monosson, Boston Financial & Equity Corporation
Larry Scherzer, Societe Generale Equipment Finance
Do you have a company to recommend for ELFA membership? Email your suggestion to Kesha Robinson at firstname.lastname@example.org.
Read the full article at http://www.bluetoad.com/article/Meet+the+New+ELFA+Members/1243566/133628/article.html.