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AACFB President's Message

By Cindy Downs

Moments of crisis have a way of bringing out the best in everyone. That’s why #coronaviruskindness is trending all over the world. Have you seen it? People are coming together to sing on balconies, hosting concerts for self-isolating neighbors, putting stuffed bears, animals, or hearts in their windows and on porches for kids to look for while they are out with their family on a walk.  

Our neighbors decided in this dark time, we needed a little light. So, they turned their Christmas lights back on. There are so many things that you can do to inspire kindness in these uncertain times. Tell someone you know why you are thankful for them. Send a motivational text to someone you know is alone or struggling. Offer support to a vulnerable neighbor, donate to a charity, donate to foodbanks, lend your ear, or call a colleague and ask them how they are finding the change in routine. 

We are all struggling to stay connected during this time when it is safer to be apart, which is why everyone in our association should get registered for the Rockin’ the Industry, Virtual Annual Conference next week. 

You do not want to miss out on this spectacular event and your industry friends shouldn’t either. This experience will be the event of the year. It will be nothing like anything in AACFB history. The title alone should tell you this is not an occasion you want to miss. 

Do you have questions you have been wondering about? CLFP? SBA? How to? Who? What? When? Where? We have the answers. You will have fun exploring the virtual tradeshow where you can connect with commercial funding sources and service providers. 

So! Get registered. 

Make that call, email, or social media contact to your colleagues and tell them all that you are registered, and you hope they are too because we are members of a fabulous association and we need to share how we are each walking this financing industry path in different ways. 

Let’s support one another! Let’s help our neighborhood, our city, our state, and our nation. 

Hope to see you soon! 

Sincerely, 


Cindy Downs
AACFB President
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2020 Virtual Annual Conference

 
The AACFB's very first virtual conference is going to Rock the Industry! From live sessions to face-to-face video chats with all of these exhibitors, this conference is the place to be this September 21-25!

EXHIBITOR LIST

4 Hour Funding
360 Equipment Finance
American Lease Insurance 
Bankers Capital
BankFinancial Equipment Finance
Celtic Bank
Channel Partners Capital
CLFP Foundation
Commercial Funding Partners LLC
Equipment Leasing Group of America, LLC (ELGA)
Financial Pacific Leasing, Inc.
First Foundation Bank
instaCOVER
Leasepath
Marble Bridge Funding Group
Marlin Capital Solutions
Maxim Commercial Capital LLC
Meridian Equipment Finance
Navitas Credit Corp
NCMIC/Professional Solutions
North Mill Equipment Finance, LLC
North Star Leasing
Northwind Financial
Orange Commercial Credit
Providence Equipment Finance, a Division of Providence Bank & Trust
Quality Leasing Co., Inc.
The Monitor
TradeRiver USA
VFI Corporate Finance
 
 
 
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AACFB Welcomes New Members

 

A big welcome goes out to all of our new members. Anyone wishing to contact a member can locate their information in the AACFB online directory.


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AACFB Benefit Spotlight

  


Visit the Members Only Section at www.aacfb.org under Savings to purchase.
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Front and Center

By Leslie Brown


 
This installment of Front & Center focuses on AACFB President, Cindy Downs. Commercial Break correspondent Leslie Brown recently sat down with Cindy virtually to find out more about her and her background. Click Here to view their chat.
 

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PPP? EIDL? Payment Deferrals? The Positives and The Negatives

By Theresa Kabot, CLFP


 
You probably keep hearing that we are all in this together and isn't that the truth? I have yet to meet someone who hasn't been significantly impacted by some aspect of the COVID-19 pandemic. As a third-party originator (TPO) in the equipment finance sector assisting businesses across the country through the pandemic, sometimes it feels like we are on the front lines. Business is back, however determining which transactions to send to which funding sources has been a conundrum at times. They had a payment deferral? Oh, we don't want to see any more business from that customer. They received a PPP Loan? Great, send them our way! Everyone seems to have a different take on the new circumstances affecting businesses large and small across the United States. 
 
So, we decided to conduct a survey of a cross section of AACFB funding source members to get a better understanding of how funders are dealing with the new factors presented by the pandemic. We broke up the questions to specifically address the different types of financial assistance that has come about as a result of the pandemic. The topics include payment deferrals versus EIDL loans versus PPP loans and grants. Next, we asked our sources to tell us about the measures they are taking to accurately report payment deferral data to the business reporting and credit bureau agencies. Our last two questions inquired on if score cards were being adjusted to reflect COVID-19 factors and asked if the funder was requesting or even requiring a COVID-19 statement. Let's take a look at the results. 
 
1) How does your underwriting perceive customers who received payment deferrals?
 
40% of funder respondents considered payment deferrals problematic and 40% indicated they were neutral. 20% of our respondents said they like to get a story that explains the reason why the company needed the payment deferral.
 
As far as payment deferrals, Ed Meyer of CH Brown Co, LLC stated, "Extra caution and scrutiny, even more so if in forbearance. If a business or PG can't make their current payments how can a lending entity reasonably expect them to make additional, future payments." 
 
"We like to know more about why they needed the payment deferral. We have a list of questions we ask to determine the reason for the deferral," added Eddy del Rio of AA Bankers.
 
2) How does your underwriting perceive customers who received EIDL funding?
 
During the two rounds of government stimulus many businesses applied for and received the Economic Industry and Disaster Loans (EIDL). Unlike PPP loans they must be repaid at a rate of 3.75% up to a maximum of 30 years with payments deferred for the first 12 months. 5% of our respondents perceived the EIDL loan as a positive, 10% think of it as a negative and an overwhelming 85% were neutral. 
 
"We just want to have full disclosure if they have or have not received COVID-19 payment deferrals. Along with that, we require that they complete our COVID-19 Questionnaire,” said JD Jenks of Global Financial and Leasing services LLC
 
Andrew Krone of Marble Bridge Funding made a very perceptive comment regarding the EIDL and perfection of a UCC filing adding, "The SBA files a UCC1 which will have to be subordinated to the lender before funding."
 
3) How does your underwriting perceive customers who received PPP Loans/Grants?
 
This is a particularly interesting question as the Payroll Protection Program loans will undoubtedly turn into grants as the debts are forgiven by the SBA. Only 5% of the respondents viewed the PPP loans as a negative while 10% viewed it as a positive and 85% of our funding source respondents said they were neutral. 
 
Larry LaChance at Bankers Capital views the PPP loans as a big plus saying, "This was the easiest money ever lent to businesses. And most all these loans should be and will be forgiven." 
 
"We subtract out any PPP loans/SBA deposits from the business's monthly deposits to see what the true business revenues are without assistance. We want to see that revenues are still mostly consistent without PPP loans/assistance," added Ann Smithson at 360 Equipment Finance. 
 
4) What steps are being taken to make sure payment deferrals are reported to PayNet, etc. as "Deferred" and not as 'Late'?
 
We were surprised by the number of responses indicating the question did not apply or that the company does not report. This represented 70% while 30% indicated they are taking measures to ensure data is reported accurately.  
 
According to John Boettigheimer of Centra Funding LLC, "Our deferred are not considered 'late' in our system."   
 
Over at 360 Equipment Finance, Ann Smithson told us, "We created COVID-19 statuses in our system to denote which contracts were restructured due to COVID-19. These new statuses were relayed to PayNet to be marked as 'deferred' rather than 'late.'"
 
5) Are your scoring models being updated or adapted to account for COVID-19 deferrals?
 
For this question we were able to compile the responses into three categories: yes, no, and not applicable as some sources do not use a score card. 40% of respondents said no, their score card was not being updated to reflect COVID-19 deferrals. Only 5% answered yes and over half of our funders surveyed indicated they do not use a scoring model and are analyzing each transaction based on its individual merits and risks. 
 
Paul Fogle of Quality Leasing, Co. expressed his position saying, "Our models aren't scoring deferrals and government assistance as outright mathematical positive or negative. However, in our subjective scoring, we could view the fact that a company decided not to apply for government assistance or a deferral as a positive. For example, if a company decided to use their own reserves to get through a downturn even though they may have qualified for assistance, this would be viewed favorably."
 
6) Do you require a COVID-19 statement about how the pandemic has affected the business?
 
60% of our funding source respondents said they require a COVID-19 Statement explaining the effect the pandemic has had on the business and how that business plans on moving forward. 40% indicated they do not require a COVID-19 Statement. 
 
"Remaining abreast of current events is required. Understanding the applicant's geographic/physical location and their business operations is also necessary. Businesses who took the time to read, understand, and file for SBA relief demonstrated good initiative." - Ed Meyer, CH Brown Co., LLC
 
"The only real change COVID-19 has had on invoice factoring is credit review/approval of debtors (clients' customers). If our clients are working with customers in industries affected hard by COVID-19, we are setting more strict credit limits and/or not approving."  - Tina Cawthorn, Orange Commercial Credit 
 
"We have found credit quality to be improving and have eliminated most of our temporary COVID-19 credit requirements. Only hard hit businesses like bars, restaurants, and gyms still have extra requirements."  - John Boettigheimer, Centra Funding. 
 
If you are a TPO, hopefully this information will help you be better prepared to conduct due diligence in researching and packaging transactions, not to mention in helping to manage client expectations for credit decisions, whether they be approvals or declines. If you are a funding source, it is always good to know what your competition is up to so that you can position yourself to work with quality TPOs that advance your plans for growth. Both TPO and funding sources need to share information about the steps being taken to safeguard our companies during this unprecedented time with sound credit decisions, which result in a healthy equipment finance sector and a healthy growing economy.
 
ABOUT THE AUTHOR
 
Owner and founder of K2 Funding, Theresa Kabot, CLFP began her career in commercial equipment financing at a Pitney Bowes subsidiary where she worked the funding side of the industry from credit and documentation to sales and marketing. She then went onto establish her own leasing company in 1996 located Seattle, Kabot Commercial Leasing LLC. Theresa presents across the nation on numerous topics including "Equipment Financing - The Key to Cash Flow".
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My One Key Sales Tip

By John Chapin

 
 
A couple of weeks ago I was approached to be included in a Sales Hall of Fame publication. The one thing they requested of me was a short video with my #1 sales tip that they could include on the website. #1 sales tip? ‘No problem,’ was my first thought. Then, the more I thought about it, the more of a problem it became. To make a long story bearable, I did finally come up with the ‘one,’ but in the process, I thought of several others too, which you might find helpful.
 
My Key Sales Tips
 
When the people putting together the Hall of Fame publication initially reached out to me, I was in the process of calling all of my previous clients and many previous contacts, something I do about once every three years or so. I was about 25% of the way through this process, and it was already paying huge dividends. So, of course I thought, “That’s my #1 sales idea.” Assuming you do good work, and people get far more value than they pay for, a call to previous clients always works well. So, while ultimately that isn’t my number one tip, it’s a good one and one you should definitely follow. 
 
Here are some other good tips:
 
  • Get back to personal communication and build relationships. You will be most effective talking to people in-person and on the phone. Stop hiding behind social media and looking for easier ways to face rejection. Use the internet and social media to gather intelligence but then pick up the phone or go see someone. E-mail, especially on an initial contact, is one of the worst ways, if not the worst, to connect with someone. You can and should use e-mail, but only after you call or stop by.
  • Identify and eliminate your biggest roadblock. What is the one major sales bottleneck in your process? Identify it and laser focus on eliminating it. Research it, read books, watch videos, take a course, talk to people, get informed, and then get to work. Once you eliminate that one, find the next biggest issue and attack that one.
  • Spend more time on your most important tasks which as a salesperson are as follows: prospecting, presenting, and closing. Ideally spend about twice as much time as you’re spending now. 
  • Work hard and smart. You want to work smart, but in the beginning, before you have everything figured out, you’ll have to work hard to learn what you need to learn. Even then, in order to make the number of calls you need to make, you simply need to work hard.
  • Know your numbers and plan your time. Know your annual, monthly, and weekly goals, and the daily activity necessary to hit those goals. Then plan your work and work your plan. 
  • Make that call you’re afraid to make. Ask yourself, “What’s the absolute worst that can happen?” Decide to accept the worst and realize that, even if the worst happens, you’ll be okay.
  • On that note, seek out rejection and discomfort. When you encounter them, welcome them and treat them like your best friend, as if you prayed for them. 
  • Charge headfirst at anything that scares you. Except of course if it’s a bear or something that can actually kill or maim you.
  • Push beyond what you think is possible. Double, triple, quadruple, or even 10X the number of calls you make in a given week.
  • Know your WHY. Why are you doing what you do? Who and what are you working for? Your personal, internal motivation, if strong enough, will drive you to accomplish anything you desire.
 
Last, and the exact opposite of least, is my number one sales tip that I finally settled on, and that number one sales tip is… Get back to the basics. So, what are the basics? First, activity. 99.9% of the time when someone fails in sales, it’s a failure of activity, they didn’t make enough calls, to get enough qualified prospects, to make enough sales. The other .1% of the time, they got hit by a bus. Sales is a numbers game, the more people you talk to, the more business you will do; even a blind pig finds corn. So basics number one is activity. Basics number two is get great at selling. The better you are at each part of the sales process, the more effective and efficient you’ll be during every part of the selling process which means you’ll spend less time with the wrong people, more time with the right people, and as a result, you’ll make more sales and build better relationships. Basics number three is persistence and perseverance. 81% of appointments are set after the fourth contact, 80% of salespeople never make it to the fourth contact. So, my number one sales tip is to focus on the basics: activity, get great at selling, be persistent, and persevere.  
  
ABOUT THE AUTHOR
 
John Chapin is a motivational sales speaker and trainer. For his free newsletter, or to have him speak at your next event, go to: www.completeselling.com  John has over 31 years of sales experience as a number one sales rep and is the author of the 2010 sales book of the year: Sales Encyclopedia. 
Contact John at 508-243-7359 or johnchapin@completeselling.com 
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The AACFB Value Proposition - A Member's Perspective

By Brian Trebels

 
At Equipment Leasing Group of America LLC, we strive to create strong relationships with our referral sources, brokers, vendors, and lessees. That is why we joined the American Association of Commercial Finance Brokers (AACFB). We have been a part of this wonderful association for over five years. Joining this association was a great step in enhancing our relationships, but it also gives us so much more. Joining the AACFB gave us a springboard for our business’s success. 
 
Creating professional relationships is incredibly important to us. Joining the AACFB gave us access to thousands of professionals in our field and gave us the ability to start new conversations, strengthen connections, and deepen relationships. The vast network of people available to us is invaluable. We can share our story and ourselves with like-minded professionals. The ability to network with other professionals allows us to gain knowledge much more quickly. Sharing ideas and asking for advice has never been easier. We can reach out to any member and know that we can start up a conversation, whether it be to ask for advice, or to share our struggles with a challenging transaction. Our professional circle has never been stronger, and it continues to grow each year. 
 
With the addition of conferences, not only do we have access to other professionals in our field, brokers we can fund contracts for, but also lenders who we can discuss strategy or industry trends. At conferences, we have expanded our circle even wider, building new contacts and closing more transactions. We are able to reach contacts not only in our profession, but also those outside our profession who reach out to the AACFB for a good lender to utilize.  
 
AACFB also gives us the opportunity to participate in committees, which not only helps us expand our professional circle, but it gives us the opportunity to learn, grow, and give back to the association. By participating in these committees, we assist in directing the growth of the AACFB, and that is an experience that is invaluable to us. At  Equipment Leasing Group of America, LLC (ELGA), the ability to learn and grow is integral to our success, and to grow alongside the AACFB is a valuable relationship. 
 
Along with professional relationships, I cannot begin to tell you how many friends I have made over the years of being a member. From meeting at a conference to participating on the same committees, I can look back and track some of the best friendships and business relationships to the AACFB. I look forward to the time when we can get back to seeing each other in person, so we can get together once again!
 
One of the greatest benefits of being a part of the AACFB is their vast amount of information that they provide. At (ELGA), curiosity is one of our core values. The AACFB allows that core value to thrive through all of the educational tools they provide to their members. With targeted news and open dialogue, we have access to so much information that helps us throughout each day. We pride ourselves in having the most up to date knowledge about our industry, and being a part of the AACFB allows us to do that. Being a part of the American Association of Commercial Finance Brokers has been an integral part of our success, and we look forward to continuing to being a part of it for years to come!
 
ABOUT THE AUTHOR
 
Brian Trebels is Chief Executive Officer of Equipment Leasing Group of America, LLC, headquartered in Northfield, Illinois. He is a member of the AACFB and sits on the AACFB Marketing Committee. 
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Brokers Beware

By Kenneth C. Greene, AACFB General Counsel


 
 
This series of articles continues to address some of the key terminology in equipment lease and loan agreements, broker agreements and the other documents we use regularly in our businesses. It will hopefully alleviate some confusion over some of the oft used but occasionally misunderstood terminology which forms the cornerstone of our industry. Some of it will be basic and will simply confirm what you already know. But some of it might surprise you.
  
By a show of hands, how many of you wanted to be a finance broker when you grew up (assuming you have in fact grown up)? I’m guessing a few, but not many. Would that have been different if you knew that the term “broker” derives from the Old French “broceur,” which means “small trader?" Possibly not. What if instead it came from the Old French “brocheor,” meaning “wine retailer,” from the verb “brochier,” which means “to broach” (as in, “broach a keg of wine monsieur”)?
 
Now we’re talking.
 
So, small traders (and yup, ye big ones too), grab a bottle of your favorite Pinot or Tempranillo (or, if that doesn’t float your trader boat, a pinch of Macallan 18) as today we discuss the perils of the unexamined broker agreement.  For, as we all know, the unexamined broker agreement isn’t worth signing.
 
Yes, you can remove your mask for this.
 
Better now? Wonderful….
 
Let’s start with the ABCs of finance, a.k.a. the Golden Rule. Not the one in Leviticus, but that crusty old adage that “he who has the gold makes the rules.” In the culture of equipment finance, the almighty broker agreement is one of the pillars of that Golden Rule. Just ask any funding source if they will do business with a broker without one. Still, just because it’s called a broker agreement, does not mean that by agreeing to it you have to be “broker” than you were before you signed it. Let’s try to avoid that. There are common pitfalls to avoid, many of which are negotiable when you are dealing with a “friendly” funding source.
 
One of the most recent (and somewhat surprising) traps for the unwary I’ve encountered is the broker agreement which calls for the signature of not only the broker, but the owner of the company, (who might also end up personally “broker” if things go south). I can’t blame my friends on the funding side for asking for this, as, when money is tight and times are tough, you have to get tougher with your money partners. But here’s a simple bit of advice. No!! Don’t do it! Ever. For any reason. BITD, broker agreements were often non-recourse. Then, slowly but surely, the reps and warranties, and the default chargebacks expanded, and, like Pac-Man, began to eat away at that “non-recourse” status until it was “sorta non-recourse”. Well, as bad as that is for your company, it’s a whole lot worse if you’re personally on the recourse receiving end. So, once again, my broker friends, don’t do it. Just say no to personal liability.
 
So, now we turn to reps and warranties (R&W). I’ve probably had this conversation 100 times, and probably with many of you whom I’ve been privileged to represent. But let’s have a quick recap for those new to the business and anyone else new to this concept.
 
The problem isn’t that the funding source isn’t entitled to these promises. They most certainly are, as long as they are reasonable. The problem is you might not be qualified to make them. Let’s look at some examples from a few agreements I have recently reviewed, some of which I have successfully renegotiated.
 
1. R&W: The equipment is in good working order, the customer has accepted delivery and is satisfied with the equipment.
 
ISSUE: Okay. The customer signed a delivery and acceptance certificate. Great. Maybe someone even did a physical inspection, or at least a verbal follow-up. But what if the D&A was signed before delivery? No bueno. Or, what if the equipment was still in a crate when it was inspected? Yes, I have seen that happen. Or the machine was out of the crate, but no one turned it on during that inspection? Who knows if the equipment works? And the verbal inspection – who did they speak with? Lots of potential problems with you, the broker, promising that the equipment works, and that the customer is satisfied.
 
2. R&W: The equipment will be used for commercial purposes only, and not for personal, family, household, or agricultural purposes.
 
ISSUE: Okay. That’s what the agreement says. But how do you know? Pretty easy if it’s a crane, or a forklift, but how about a computer system, or a truck? 5 years is a long time. Things can change fast, and unexpectedly, as we have seen in 2020.
  
3. R&W:  Neither the lessee/borrower or any guarantor have any defense, offset or counterclaim as to enforcement of the contract
 
ISSUE: I guess if this were true, I’d be out of work. And wine. Well, IMHO, not having a good defense, offset, or counterclaim, doesn’t always factor into the decision to litigate the validity and/or enforceability of the contract.  Somehow the disgruntled borrower always seems to find an equally disgruntled attorney who isn’t dissuaded by the absence of facts or law that support his case. Together they manage to make trouble for the broker and lender, who then looks back on that rep and cringes (“how could I have known THAT?”). I’d be reluctant to try to predict anything 3-5 years down the line, especially these days of COVID-19, recession, and so much more (see above).
 
4. R&W: The customer’s signature is valid. 
 
ISSUE: Did you actually see him sign? Did you check the ID? Was the signature notarized? Was it done online? Can you rely on Docusign? Yes, to a degree (the law supports e-signing), unless someone testifies that someone else was sitting at the computer “Docusigning” for him or her?
 
5. R&W:  Broker has complied with all Federal, State, and local laws and licensing requirements including obtaining a California Finance Lenders license or its equivalent.
 
ISSUE: Not everyone needs a CFL license. If you’re not doing business in California, or you broker deals only to banks and bank subs, you don’t need a CFL license. If you don’t need one, my advice….don’t get one. Sorry DBO. I love you guys, but . . . .
 
There are many more reps and warranties with similar problems, but you get the idea. The good news is that there is a simple solution to many of these issues, as long as your lender agrees. Most of the troublesome representations and warranties can be tempered by the prefatory language “to the best of Broker’s knowledge and belief.” That ameliorates the guesswork (“Darn, I didn’t know Jesse Cowpod had a farm behind his house”)!!
  
Now the “best of” knowledge language isn’t appropriate across the board. There are certain things you do in fact know, for instance, if you split the commission, the deal was re-brokered, there was a referral source, or if you provided the lender with all relevant financial information. So, don’t expect the lender to yield on every rep and warranty to the weaker “knowledge and belief” standard. The ones you can reasonably make, you should, and your lender is entitled to them. It’s the ones predicated upon guesswork, speculation, and prediction that need “softening.” Don’t ask for too much, and your lender will appreciate it.
 
Apart from the reps and warranties, you should always read your agreement carefully. It is important to understand when a lender may demand that you buy back a deal (first month default, 90-day defaults etc.). Sometimes these buyback/chargeback calculations are formulaic, but you best understand them before you sign off. Some broker agreements also enable the lender to withhold payment of other commissions if there is a default and a buyback demand that has not been met.
 
Another thing to look at is the indemnification clause. It should always be reciprocal. If your act or omission hurts the lender, you should be prepared to indemnify them. But that’s a two-way street. Most lenders will agree to this change.
 
There are always other issues worth considering, but this should give you a good start. If you have questions, you can always call me (shameless promotion, indeed!).
 
That’s about it for this month. Tune it next time when we discuss the vexing issue of the economic life of face masks. Residual value? Hmmm.
                  
Well, maybe not. In fact, I think my next article will address some of the recent changes and twists in the California Finance Law and the still pending new disclosure laws.
 
Everyone stay safe, stay healthy, stay busy, and, mostly, stay away from used face masks!
 
ABOUT THE AUTHOR

Kenneth C. Greene is an attorney based in Westlake Village, California. He has been representing lessors, brokers and others involved in the leasing and finance industry for almost 40 years. His practice entails documentation, licensing, compliance, litigation, and bankruptcy. He is currently General Counsel to the American Association of Commercial Finance Brokers as well as an Advisory Board member of Leasing News. 
 
This article is presented by the Law Office of Kenneth Charles Greene. All copyrightable text, the selection, arrangement, and presentation of all materials (including information in the public domain), and the overall design of this presentation are the property of the Law Office of Kenneth Charles Greene. All rights reserved. Permission is granted to download and reprint materials from this article for the purpose of viewing, reading, and retaining for reference. Any other copying, distribution, retransmission, or modification of information or materials on this site, whether in electronic or hard copy form, without the express prior written permission of Kenneth C. Greene, is strictly prohibited. 
 
The materials available from this article are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to these materials does not create an attorney-client relationship between the Law Office of Kenneth Charles Greene and the user or viewer. The opinions expressed at or through this site are the opinions of the individual author.  
 
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COVID-19? Oh, The Places You'll Go!

By Shawn Smith


 
Our company’s journey since March of this year has often reminded me of the above-named Dr. Seuss book. We have seen, in a stunningly small number of months, events that I never thought possible and results that I still have trouble believing are real. Nevertheless, it is not all doom-and-gloom, and I firmly believe that better days are closer than the popular press and other media would lead us to believe.
 
Yes, our company was sucker punched in March, as were (many? most? all?) other companies. An invisible enemy from a disputed place of origin with unknown capabilities was creeping around the world, and, oh yes, you could die if you caught it, but nobody could tell you how you catch it or the odds of you catching it or the probability that you would actually die if you catch it or what other awful things might happen to you if you don’t actually die. Everyone knows what happened to the economy after that.
 
But, while the immediate economic effects were truly horrible for industries like entertainment and travel, they were less so for many other industries. And while overall unemployment eventually skyrocketed to record-setting levels, and while the popular press and other media seemingly led every other story with that statistic, something surprising and very important got lost in the noise: the stock market, after an initial bout of panic selling, was recovering.
 
The stock market–that consensus vote of everyone on the planet regarding the economic state of the world–was sensing that everything wasn’t that bad, and that this economic “crash” wasn’t caused by systemic supply or demand issues. Rather, it was caused by something that the world had the capability to handle. And it didn’t seem like it would take decades or even years but rather months, to handle it. In short, what “broke” the economy wasn’t anything like what had “broken” the economy in recent memory, and it was fixable.
 
And what will happen when it appears that this fix is on its way? As I write this article, the S&P 500 has hit its highest level in 5-1/2 months and is currently trading within 2% of its all-time-best-ever-in-the-history-of-the-world record high, with people still arguing about whether the virus is a Republican or a Democrat. With people still debating whether the constitution outweighs the government’s authority to require people to wear a mask, the consensus vote of everyone on the planet is positive.
 
And we’ve seen some of this optimism in our own business. Yes, some funding companies cut back for a while in the face of great uncertainty, but others saw opportunity. Yes, some companies experienced painful, catastrophic, or even terminal effects of the virus, but most have been able to stay afloat or even thrive. Yes, some borrowers have experienced difficulty paying their debts, but many have managed to avoid catastrophe when presented with the right kind of help in the right kind of way at the right time.
 
In short, we view the current situation as a transformation. And as painful and awful as it is, there will still be restaurants and trucking companies. There will still be people who want to go to bars and theaters. There will still be companies making things that people want to buy. And when people are able to once again go where they want to go and buy what they want to buy and do what they want to do, I believe that our “new, new normal” will be full of opportunities and success. We just need to remember that, in the near term, we’re merely finding new “places to go.”
 
ABOUT THE AUTHOR
 
Shawn Smith is chairman and CEO of Dedicated Commercial Recovery Inc. A pioneer of “Relationship” based commercial collections, Smith founded the company in 2015 with a vision to create a new kind of commercial collections company, with a new model based on connecting on a personal level with those in debt and a new, integrated corporate philanthropy model.
 
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COVID-19: Relief Financing in a Tightening Credit Environment

By Layla Hollender


 
As the economic impact of the global pandemic continues, one of the biggest issues to emerge is the availability of funding support. While lockdowns begin to lift and businesses restart, lending institutions find themselves in uncharted waters. Institutions have tightened credit which has created a major problem for struggling businesses. Media and policy reports suggest the overall response has been similar to that of the financial crisis of ‘08. Businesses, especially small to midsize enterprises (SMEs), are bearing the brunt of the tightening credit environment.
 
A less visible crisis, compared to the life altering impacts of the pandemic, exists deep within supply chains, and it is destabilizing small and medium-sized enterprises. A sudden loss of demand and revenue for SMEs severely affects their ability to function. Many customers' business ecosystems have been disrupted by the pandemic, and therefore their accounts payable are delayed, they are in default, and many are even forced into bankruptcy. As a part of the pandemic‘s collateral damage, credit risk has sharply increased with devastating impacts on credit availability and global cashflow. To counteract tightening credit and improve cashflow, many SME businesses have turned to Supply Chain Finance, utilizing ‘Small Business Invoice Factoring’ as a means to access trade credit and promote their continued financial health and inclusion in the value chain.
 
Demand for credit insurance has been surging since the onset of the COVID-19 outbreak. Capacity is scarce and as a result, credit insurance has become a seller’s market. Insurance companies are cautious in the wake of a global economic recession and have become risk-averse. While reducing their exposure to certain industries, insurance coverage is limited to the very strongest SME credits, blue chip companies, and government entities.
 
Vendor payment terms have tightened. To bridge cashflow and provide added security, many suppliers require greater deposit amounts and earlier overall payment. For example, instead of paying a 30% deposit, companies may now require 50% or more down. These venders are also less inclined to provide buyers with an extension of credit terms. Net 30, 60 or 90 may be reduced or eliminated entirely.
 
Although the current economic volatility is disruptive and challenging, there is an opportunity to take lessons learned and apply them to the ways in which we can help SMEs navigate today’s hurdles. 
 
While working capital is tight and banks are restricting credit, some funding sources are offering enhanced programs to better serve the clients’ needs. These enhanced programs help support struggling supply chains by leveraging the credit strength of the end-customer to fund the upstream production cycle. The dual programs bridge the client’s supply chain funding gaps by combining Purchase Order Finance and Invoice Factoring Services in a single process to fund the full length of the supply chain. Under the enhanced funding approach, the client is both a Buyer and a Seller to fund vendor purchases and accelerate payment of customer invoices.
 
As in every challenging economic situation, it becomes necessary to adapt and evolve to meet the needs of the environment. Brokers should reach out to their funding sources to inquire about how they are innovating their products and services to adapt to the changes in the economy and client needs.
 
ABOUT THE AUTHOR
 
Layla Hollender is President & CEO of TradeRiver USA. She is an accomplished business executive with over 35 years of financial services experience, from international banking to investment banking, project and trade structure finance, as well as various domestic specialty finance products and services. She has held various positions in international banking, with geographical responsibilities from South America to Europe.
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Starting Anew - Finding Your Next Funder

By Ron Elwood


 
The pandemic has unleashed a myriad of complications on the broker marketplace in the last six months, and we all know the end is not yet anywhere in sight. Safe to say the effects of adjustments made by funding sources dealing with increased delinquencies, deferment requests, and navigating the waters of lending into an economy affected by ever-changing shutdowns and restrictions on businesses of all types across the country ranks right at the top of the list.  
 
With so many funding sources understandably tightening up credit appetites (whether just a little or to an extreme), or even exiting the market altogether, brokers are on the hunt for those able to meet their needs, perhaps now more than ever.
 
Before signing up with a new lender, there are some key questions you should ask to ensure they will likely be a fit, and most of those questions start with what you’re looking for to fill a specific void in your funder mix.  
  • Do they lend to your target industries and collateral types?
  • Are they more credit-based or asset-based in their lending?  
  • What credit quality and pricing do they offer?  
  • What are their commission limitations?
  • Are there minimum volume requirements?
Once you’re satisfied that there’s a fit along those lines, you’re all set, right? Not at all! Next come the questions that will truly determine whether you are looking at a relationship built for the long-haul, or just a possible fit on a deal every here or there. As a popular country song goes, “Are we written in the stars (baby), or are we written in the sand?”
  • What do their credit and funding processes consist of? Every funder is different, and these details matter.
  • Do they auto-score or are they more manual in nature when underwriting?  
  • Can you communicate directly with their Credit and Funding Analysts?
  • What sort of service levels and response times do they offer in all areas?
  • Are they relationship-oriented or transactional in their dealings?
  • How would the lender define a “successful relationship?”
Now that you’ve pulled the trigger and are set up with this new funder, don’t forget to do your part to make a positive impression and give the partnership the best chance for success.  
 
Never underestimate the value of first impressions in a new relationship of any kind - this business is no exception. Your first handful of submissions should absolutely be strong fits for your new partner. Consider the benefits; you show your ability to effectively evaluate the credit, and package the submission to the lender’s liking, thereby immediately establishing a level of credibility amongst key personnel there.  No doubt, this is one of the more underutilized tools leveraged by brokers in our industry, and the intangible long-term benefits are more than worth the effort. There will come a time to test the outer limits of your new funder’s flexibilities - right out of the gate is not that time. Efficiencies in processing and strong approval and funding ratios are commonly very important pieces to the relationship puzzle for funders. Take pride in the work you put into presenting deals.
 
And never forget the value of strong lines of communication, be it with your Broker Rep or the Credit and Funding Analysts you might interact with. If the opportunity ever presents itself, take advantage of any chance to see your funding source face-to-face (Dear COVID, hit the road so we all can too, will you?). And whether or not in-person visits at conferences or otherwise are in the cards, keep up with your key contacts either through transaction-driven interactions or, even better, scheduled monthly or quarterly calls to ensure expectations amongst all parties are being met and opportunities seized.
 
To say we’re in an environment of ‘shifting sands’ would be a monumental understatement. When the time comes to find that new funder you need to ensure your company’s continued success, be vigilant in evaluating and taking the necessary steps to get it right the first time. That will help ensure the partnership is “written in the stars.”
 
ABOUT THE AUTHOR
 
Ron Elwood, CLFP, is Sales & Marketing Manager for the Partner Funding Division of Navitas Credit Corp. (Credit-based lending team in South Carolina), a United Community Bank company.  Ron earned his MBA from the University of South Carolina’s Moore School of Business in 2006, and his CLFP in September 2019.  
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Story Lenders Will Become More Important in the Days Ahead

By Dean Oliver


 
The COVID-19 pandemic has changed our way of living, at least for now and for the near future. It challenges businesses with uncertainty around the future, both short-term and long-term. To meet this challenge, we must begin to ask important questions, such as: How will my business return to normal? What is “normal” now anyway? Will anybody take on the risks to help my company? What are the opportunities presented by this? 
 
In the days ahead we will learn a lot about the answers to these questions and what the future will look like once this pandemic is over. To help ensure that the future will remain positive for your business, you may need to look for help in places you would not normally look. For many businesses this will mean looking to financial institutions and other funding sources for assistance. However, traditional lenders may not be willing to take on the level of risk the new normal will present. Luckily, story lenders are well-versed in taking on considerable risk and will become more important for many businesses in the days ahead.
 
Taking (Re)Action
 
The pandemic has unfortunately forced many businesses to shut down or restructure. However, much like a forest can be rejuvenated with new plant life after a destructive wildfire, new businesses will sprout in place of the old ones. Rather than seeing just the risk as businesses close doors, story lenders work with existing and new businesses to grow bigger, better, and stronger firms. Newton’s third law states: for every action there is an equal and opposite reaction. Seizing the opportunity, story lenders will help new businesses grow and prosper in place of those once great businesses forced to shut down due to the global pandemic.
 
Playing the Hand You Were Dealt

As companies in some industries such as transportation and hospitality have suffered, others like FedEx and UPS have prospered, with their stock up 30% in the last month. Successful story lenders will distinguish the industries which can prosper and assist them in doing so.  
 
The return to prosperity for the struggling industries may be gradual, but it will happen. However, it may have to wait for a vaccine to get back to where they were before. In the meantime, story lenders can help customers put measures in place to accommodate this new normal with funding partnerships. A funding partnership that helps these businesses gradually build themselves up back will give them a chance to return to their winning ways.
 
The New Normal

Normal will likely not be what we were used to it being before the COVID-19 pandemic hit. Instead, the new normal will include more remote working, increases in safety measures and equipment, and increased stock in supply chains. Many of these changes will rely on story lenders’ support. 
 
The technology of our time is always evolving and allowing us to evolve with it. Many companies are used to having a physical headquarters where employees can meet, work together on projects, and share a lunch together. However, when COVID struck many companies were forced out of their physical headquarters and forced to adopt a digital presence. This remote digital workplace must maintain the same level of efficiency as a regular workplace and to ensure that standards are met. IT services have been and will continue to administer home and remote networks. Implementing these networks is no easy task, however. It requires significant expenses and risk. This switch to remote workforces resembles start-up expenses in many ways and may present opportunities for story lenders accustomed to working with start-ups to assist in funding the new infrastructure.
 
Safety First

Finally, we are all aware of the efficacy of mask wearing, hand washing, and social distancing. Ensuring safety measures such as these are implemented as businesses return to their offices is going to require expenses that businesses were unprepared for. Providing employees with masks, touchless hand sanitizer and hand washing stations, and finding new ways to practice social distancing in the office can be expensive. These expenses are made all the riskier by the fact that there really is no way of knowing when a vaccine will come out and these safety precautions will no longer be necessary. 
 
The risk of the unknown is one of the scariest factors to traditional lenders. And while some of our questions are being answered, in the post-COVID future, traditional lenders may turn you away or bog you down with long, drawn-out processes. Story lenders are accustomed to moving quickly and tailoring terms and processes to unique situations. If your business needs creative funding to pursue its opportunities, a story lender may be the right solution for you. 
 
ABOUT THE AUTHOR

Dean Oliver is a Principal of NFS Leasing, with a background in finance, operations, manufacturing, and technology. Prior to joining NFS Leasing, he served as President and COO of NEXL Inc. Dean received a B.A. in Political Studies from Gordon College, and a Master’s in Business Administration from Boston College.
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Surviving & Thriving During COVID-19

By Brian Schonfeld, CLFP


 
Coming out of nowhere, COVID-19 has had an immediate and wide-reaching impact on not just the equipment leasing & financing industry, but the global economy as a whole. We’ve seen a wide range of impacts, including layoffs & furloughs, people working remotely, sporting events cancelled, restaurants/bars closed, gyms closed. Hotels, movie theaters, and hospitality have been impacted, and of course schools moving to an online educational model. And the issue is compounded by the unknown: How long will it last? How severe will it be? Have we seen the worst or is the worst yet to come? 
 
Pawnee Leasing Corporation, like many others, has unfortunately not been spared the effects if COVID-19, both from an employee and portfolio standpoint. Firstly, the health and safety of our employees is our highest priority and as such we’ve implemented remote access capabilities for all employees; with the majority working from home during the 2nd quarter of the year and a portion of our employee base still working from home yet today. For those still working in the office we’ve implemented temperature checks, required masks when moving about the office, and moved all meetings to a virtual format.
 
Like a lot other lenders, we’ve put restrictions in place on industries and segments that we believed would be hardest hit by the pandemic. We’ve also tried to accommodate our customers the best we can with payment deferrals and restructures. And while early, we’ve seen a very positive trend of lessees and borrowers returning to their original payment obligations.
 
As of June 30, 2020 “COVID-19 deferrals declined to 12% of portfolio accounts representing 15% of portfolio value of our customer base, with approximately 50% of COVID deferred accounts resuming their regular monthly payments in June and less than one-third of the deferred accounts left at the end of July.” 1 
 
Throughout the pandemic caused by COVID-19, Pawnee Leasing has remained committed to helping our customers. One important thing to note is that all deferral discussions with customers take place on a one-on-one basis. We believe that our long history and experience in collections provides us with the capability to best provide the appropriate mitigation for our customers.
 
In addition to providing payment relief for our customers, we’re also analyzing the characteristics of these deferrals. We’re slicing these COVID-19 deals and looking at our deferrals by brokers, assets, industries, state, credit grade, transaction size, time in business, etc. Are certain segments of our portfolio under deferral experiencing more or less stress than others? Additionally we’re examining the different phases of deferrals. Are certain states, industries, assets, etc. moving out of deferral status at a different pace than others? 
 
Make sure you track your customers’ requests. If possible, create a page on your website or a form that can be submitted by your customer for them to request a deferral. Whether these are your customers or your funders, having and being able to analyze this information is enormously valuable. Make sure however that when you design your deferral request, you do so in a way that’s easy to analyze.
 
Form-filled text boxes are the worst as far as generating data easy to analyze. Instead of allowing your customer to simply write in how long of a deferral they would like to request, give them the option to select one month, two months, three months, etc. This will enable you to simply and easily categorize and then illustrate how many months your customer is requesting a deferral for, instead of doing a complicated text analysis of their request.
What have we learned through all of this? First, be flexible with and supportive of your employees. They might have health concerns due to either themselves or their immediate family members being in a higher-risk group. Their spouse might have been laid off or had their hours/pay reduced. And their children are dealing with trying to go to school remotely, a new experience for us all. 
 
Second, work with your customers - they overwhelmingly want to pay their debt and honor their contract. Don’t underestimate the scrappiness of small business owners and their ability to adapt their business and manage their expense load. And recovering your receivable balance, even if delayed slightly, is better than taking a loss. Your customers are your best means of recovering your investment - they can use the leased equipment, you cannot!
All customers are not equal however, and you’ll want to consider the following when considering deferrals. How far along are they in their contract? Are they in an industry or state that has been adversely impacted by COVID? Or conversely in one that has been touched less severely? How long of a deferral do you want to provide? Is it better to provide numerous smaller (i.e. one month) deferrals and have your customer coming back to you, or to provide a 90-day deferral that runs the risk of not touching base with your customer for a quarter of year. Talk to your customers; develop rapport, trust, convey empathy…but be firm and honest too… you, like them, must be paid for your services. This MIGHT get you paid before the other lender. 
 
As I write this, the United States is still in the thick of the COVID-19 epidemic. How long this economic uncertainty goes on depends on a lot of factors, some in our control and some out of our control. Together though, we can do our best to mitigate these effects and survive this generational event as successfully as possible.
________________________________
1 Chesswood Press Release “Chesswood Announces Q2 2020 Results and Provides COVID Update” August 7, 2020.
 
ABOUT THE AUTHOR
 
Brian M. Schonfeld is the Project & Information Manager at Pawnee Leasing Corporation, a small ticket funding source specializing in “B+”, “B”, Start-Up and “C” credit transactions. A member of the equipment leasing industry since 2001 when he started in sales and portfolio management, he has been with Pawnee since 2006. He holds a B.A. from the University of California, received his CLFP certification in 2008, and his MBA from Colorado State University in 2012. 
 
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Factoring to the Rescue

By Brad Gurney

 
As banks have reported tightening their lending standards there will be more and more demand for alternative lenders for the last half of 2020. As financial brokers your expertise will be needed as fewer companies qualify for conventional lending. Your customers will be counting on your expertise of understanding the many types of commercial financing products available. Factoring is an ancient form of financing that is currently in great demand but is often mis-understood.
 
What is Factoring?
 
Factoring is the sale of a business’s invoices to obtain cash. Independent factors are more focused on the credit quality of the business’s customers than the business’s financial performance. For businesses that have been affected financially by the crisis but have a strong customer base factoring can be a great solution.
 
Who is good candidate for Factoring?
 
A factoring prospect is either a B2B or a B2Govt business with a strong customer base. Common industries include staffing companies, manufacturers, fabricators, distributors, oil & gas service companies, telecommunications, wholesalers, and service companies. Most factors exclude construction and third-party medical accounts receivable companies, but specialists focus on these niches. 
 
What are the steps?
 
A true factoring facility is not a loan. The client sells their invoices to the factoring company and assigns the payment to the factor. It is critical for the factoring company to have first filing position against the client’s accounts receivable. After establishing that there are no prior UCC liens against your prospect, the next step is running credit reports on the customers to approve them. After the customers are approved the factor will verify the outstanding invoices. After all these steps are done the factor is ready to fund your prospect.
 
What does the contract look like?
 
This is where factoring companies will greatly vary. You will want to help your prospect find a flexible factor that does not require minimums, or that all invoices must be factored. Most factors usually advance 75% to 90% of the invoice amount. All fees, called a discount rate, should be plainly stated in the agreement. Most factors work with a one-year contract. Some factors will require a minimum to be factored each month. Other factors will cap the outstanding with their client. It’s important to match your prospect with the right factor. 
 
Funding
 
Your client will continue to do business as usual: shipping products, completing services, and invoicing their customers. Your client then sends the invoice to the factor and a verification from the customer of the invoice. After approval, the factor will advance the client the agreed amount (75%-90%) generally within 24 hours of approval.  When the factor receives payment from the customer the factor takes their fee from the “hold back” and refunds the client the remaining balance. Some factors can get a prospect funded in 3-4 days, then funding is usually within 24 hours of submitting invoices.  
 
Selecting your Factor
 
The longevity and reputation of your factor is important. Ask about what industries the factor prefers and their source of funding. Find out what size deals the factor is comfortable with. It is critical to discover what communication the factor will have with your client and their customers.   
 
ABOUT THE AUTHOR
 
Brad Gurney is a Co-Owner and Senior Vice President of American Receivable Corporation, which assists small to medium sized companies by buying their commercial accounts receivable and speeding up their cash flow. Brad advises businesses on ways to cut down on costs of financing, risk management with their debtors, just to list a few.
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Legal Corner

By Sean Murray


 
Factoring companies and merchant cash advance providers may be in for a rude awakening in New York. The legislature there, in a matter of days, has rammed through a new law that requires APRs and other uniform disclosures be presented on commercial finance contracts… even if the agreements are not loans and even if one cannot be mathematically ascertained.
 
The law also makes New York’s Department of Financial Services (DFS) the overseer and regulatory authority of all such finance agreements. DFS can impose penalties for violations of the law, the language says.
 
The bill was passed through so quickly that unusual jargon remained in the final version, increasing the likelihood that there will be confusion during the roll-out. One such issue raised is the requirement that a capital provider disclose whether or not there is any “double dipping” going on in the transaction. The term led to a rather interesting debate on the Senate Floor where Senator George Borrello expounded that double dipping might be well understood at a party where potato chips are available but that it did not formally exist in finance and made little sense to have it written into law.
 
The bill, originally introduced in May 2019, resurfaced in March of this year just as the Governor was issuing shut-down orders throughout the state. It, along with many other bills, then went into hibernation. It was brought back to life on July 10th and hurried through the committee process to be made available just in time for a floor vote this week before the legislative session closed for the rest of the year. It passed. All that is required now is the Governor’s signature.
 
Senator Kevin Thomas, the senate sponsor of the bill, admitted that there was opposition to the “technicalities” of it by some industry groups like the Small Business Finance Association and that PayPal was one such particular company that had opposed it on that basis. Senator Borello raised the concern that a similar law had already been passed in California and that even with all of their best minds, the state regulatory authorities had been unable to come up with a mutually agreed upon way to calculate APR for products in which there is no absolute time-frame. Thomas, acknowledging that, hoped that DFS would be able to come up with their own math.
 
APR as defined under Federal “Regulation Z,” which the New York law points to for its definition, does not permit any room for imprecision. The issue calls to mind a consent order that an online consumer lender (LendUp) entered into with the Consumer Financial Protection Bureau in 2016 after the agency accused the lender of understating its APR by only 1/10th of 1%. The penalty to LendUp was $1.8 million.
 
Providers of small business loans, MCAs, factoring and other types of commercial financing in New York would probably be well advised to consult an attorney for a legal analysis and plan of action for compliance with this law. The governor still needs to sign the bill and New York’s DFS still has to prepare for its new oversight role.
 
Passage of the law was celebrated by Funding Circle on social media and retweeted by Assemblyman Ken Zebrowski who sponsored the bill. The Responsible Business Lending Coalition simultaneously published a statement.
 
Last modified: July 24, 2020
 
ABOUT THE AUTHOR
 
Sean Murray is the President and Chief Editor of deBanked and the founder of the Broker Fair Conference. Connect with me on LinkedIn or follow me on twitter. You can view all future deBanked events here.
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Industry Buzz in the Biz

 

CLFP Foundation Holds 2 Online Academies and Adds 30 New CLFPs

 
JUNE 22, 2020 – NORTHBROOK, IL - Due to COVID-19, two previously scheduled in-person Academies for Lease & Finance Professionals (ALFP), were moved to an online format. The first was hosted by U.S. Bank Equipment Finance in May and the second by Arvest Equipment Finance this month. Eric Bunnell, CLFP - president at Arvest Equipment Finance stated, “We were looking forward to hosting again in Kansas City but when we realized that wasn't an option, we adjusted our plans to move forward with the online class. I observed the sessions and I was very impressed with the experienced instructors that the CLFP Foundation lined up and how they presented the material.”
 
Following both ALFPs, the Certified Lease & Finance Professional (CLFP) Foundation welcomed the following new CLFPs and Associates:
 
  1. Amanda Albertsson, CLFP – Vice President of Sales, Fernwood Capital & Leasing
  2. James (Jay) Bankston, CLFP – VP, Equipment Finance Business Development Rep., Arvest Equipment Finance
  3. Brett Blankenship, CLFP – Manager of Customer Support, LTi Technology Solutions
  4. Michelle Castor, CLFP – Director of Contract Administration, U.S. Bank Equipment Finance
  5. Anita Colvin, CLFP – Vice President, Director of Sales, U.S. Bank Equipment Finance
  6. Katie Crawford, CLFP – Vice President, Equipment Finance Specialist, Arvest Equipment Finance
  7. J. Patrick Doud, CLFP – Account Executive, Zions Equipment Finance
  8. Regina Eckendorf, CLFP – Vice President, U.S. Bank Equipment Finance
  9. Maria Ehlers, CLFP Associate – Commercial Relationship Manager, American Equipment Financial Services, LLC
  10. Leslie Harty, CLFP – Sales Support Specialist, Arvest Equipment Finance
  11. Kacie Haugen, CLFP – Financial Analyst, U.S. Bank Equipment Finance
  12. Austin Johnson, CLFP – Finance Manager, Commercial Capital Company, LLC
  13. Derek Johnson, CLFP – Partner, 10-4 Financing, LLC 
  14. Eric Johnston, CLFP – Business Development Rep., Vice President, Arvest Equipment Finance
  15. Amber Kodet, CLFP – Business Analyst, U.S. Bank Equipment Finance
  16. Jenaleigh Lathrop, CLFP – Sales Support Specialist, Arvest Equipment Finance
  17. Ryan Ledden, CLFP – Implementation Manager, LTi Technology Solutions
  18. Isaac Leman, CLFP – Vice President, U.S. Bank Manufacturing Vendor Services, U.S. Bank Equipment Finance
  19. Andrew Lepley, CLFP – Leasing Credit Manager, Assistant Vice President, U.S. Bank Equipment Finance
  20. John Marshall, CLFP – Principal, JRM Business Advisory & Consulting Services, LLC
  21. Jackie Moore, CLFP – Credit Analyst, Arvest Equipment Finance
  22. John (Clark) Parker, CLFP – Asset Manager, Arvest Equipment Finance
  23. Matthew Peters, CLFP – Sales Manager, Commercial Capital Company, LLC
  24. Jason Peterson, CLFP – EVP of Finance, JenCas Financial, Inc.
  25. Megan Syltie, CLFP – Operations Manager, U.S. Bank Equipment Finance
  26. Jeffery Swift, CLFP – Vice President, Credit Manager, U.S. Bank Equipment Finance
  27. John Thomsen, CLFP – Regional Sales Manager, U.S. Bank Equipment Finance
  28. Annie Weets, CLFP – End of Lease Manager, AVP, Asset Management, U.S. Bank Equipment Finance
  29. Kayla Werkman, CLFP – Financial Analyst, U.S. Bank Equipment Finance
  30. Justin Wilmes CLFP – AVP, Inside Sales Manager, Healthcare Vendor Services, U.S. Bank Equipment Finance
 
Annie Weets, CLFP, end of lease manager, assistant vice president at U.S. Bank Equipment Finance explained why she pursued the designation, “The breadth of knowledge required to obtain the CLFP designation encompasses the entire leasing life cycle and all of the departments involved. Having this knowledge makes me a more valuable resource to my company and to my customers. Having the designation is just an outward sign of my commitment and passion for an industry that I love.”
 

CHB Leverages Generational Differences to Create Value
Five Generations in One Workforce contribute to CHB Success

 
JUNE 29, 2020 – WHEATLAND, WY - Baby boomers think everything revolves around them. Traditionalists are old fashioned. Millennials are never on time. X-gens have no identity. Zs are buried in their isolation devices. 
As numerous generational studies have shown, stereotypes and labels abound among employees in today’s work force. These labels have generally described an entire age group of individuals, some based-on fact and some on over-simplifications. Regardless of definitions, today’s workforce consists of five major generations greatly influenced by the events and technology of the era in which they were born. Despite these differences, CHB’s five-generation staff has overcome these age-group challenges and created greater value for its customers. Today’s mix of generations are the Traditionalists (born before 1946), Baby Boomers (1946-1964), the X-gens (1965-1979), the Y-gen or Millennials (1980-1995), and the Z-gen (born after 1995) also called i- gen (for iPhone, iPad, iPod). At CHB, its 22 staff members represent all five generations. Never before in the company’s past have we had such a wide mix of multiple generations working simultaneously. These multiple generations are having an unique and profound impact on CHB, and US businesses in general, through the ongoing balance of honoring tradition and pioneering change.  
 
In 2015, Millennials became the largest generation in the US workforce, followed closely by the X-gens. Although out-sized in this metric, Baby Boomers still hold most societal leadership roles; thus, their influence continues to be strong, albeit waning. At CHB, these paradigms are upside down; only 20% of the managerial positions are held by Boomers, 60% are Xs, and one a Traditionalist…the company’s founder Chuck Brown. Despite this difference, CHB X-gen leaders observe and listen to the inputs and suggestions from the wisdom of its more experienced associates and utilize a collaborative decision-making model that values each team member’s opinion.
Further, CHB values and embraces the skill set and abilities inherent in its Z-gen staff. The integration of web- based tools, advanced communications equipment and increased personnel interaction have helped contribute to CHB’s rapid underwriting decisions and reduced loan processing times. For example, CHB recently implemented a credit origination software application, which made it possible to retire the former paper based system. This technology-driven system will help CHB further reduce its decision cycle thereby saving third-party originators and borrowers precious time.  
 
CHB’s customers are just as diverse as its five generations staff. The CHB Team has overcome some generational differences among its staff through education and training, closely working together, and by better relating to one another. These efforts have reduced single-minded perceptions, created greater empathy, and improved the staff’s ability to understand its clients’ needs, wants and desires.
 
The CHB staff has embraced generational diversity! Each members’ work and contributions in a multi-generational company where everyone can reach their full potential and collaboration is expected and is not only productive but also constructive. In this environment, CHB delivers a value-added equipment finance product to its customers by observing, listening, learning, adapting, implementing new technologies, and healthier relations with each other. These attributes help make CHB the industry’s “Foremost Equipment Lender”.
 

CHB Implements Credit Origination System

 
JULY 14, 2020 - WHEATLAND, WY – CHB has implemented DecisionComplete©, a credit origination solution provided by Dominion Leasing Software, which will create internal efficiencies, provide an improved product, and better serve clients. It was designed for seamless credit application processing.
 
With the new system, CHB now processes all applications, from start to finish, through a digital portal. This new tool permits a near-paperless environment and reduces the number of staff hours needed for data entry. Pertinent financial and equipment information is entered one time and required documents are autogenerated.
 
Further, the system utilizes an intelligent workflow process which results in quicker underwriting and handling increased finance volumes. This acceleration will benefit CHB clients with fast decisions, shorter turn-around times, and reduced redundancies. Finally, the implementation of DecisionComplete© will enable CHB to grow and expand its reach within the equipment finance industry by leveraging the customer relationship management module. This capability will help CHB develop new partner relationships. 
 
CHB provides competitive fixed-rate loans and leases and has the ability to operate in 49 states. It is part of Platte Valley Financial Service Companies, Inc. which in addition to C.H. Brown Co. LLC., Wheatland, Wyoming also consist of Platte Valley Bank in Scottsbluff, Gering, Bridgeport, Morrill, and Sidney Nebraska; Platte Valley Bank in Casper, Torrington, Cheyenne and Wheatland, Wyoming; Mountain Valley Bank in Walden, Steamboat Springs, Hayden, and Meeker, Colorado; J.G. Elliott Insurance Center in Scottsbluff, Nebraska and Casper, Torrington and Wheatland, Wyoming. 
 
Dominion Leasing Software is a leading provider of enterprise software and services to the equipment finance industry throughout the US and Canada. Located in Powhatan, VA, Dominion's solutions are used by a diverse group of clients including banks, credit unions, independent finance companies, transportation companies, and vehicle lessors.
 

Maxim Commercial Capital Funds Deals in 30 States During 2Q 2020 
Hard asset-secured lender fulfilled pent-up demand for financing during COVID-19 pandemic 

 
JULY 14, 2020 - LOS ANGELES, CA – Maxim Commercial Capital is pleased to report it funded hard asset-secured financings for small and mid-sized businesses (SMBs) in 30 states across the United States during the second quarter of 2020. After pivoting quickly in March to safer-at-home working conditions for its 30+ team members, Maxim experienced a steady increase in applications from equipment brokers and vendors for their borrowers with challenged credit. Maxim lends $10,000 to $3,000,000 to SMBs nationwide secured by heavy equipment and real estate to facilitate asset purchases, working capital and to refinance expensive short term debt.
 
“Maxim was founded during the Great Recession of 2008” noted Behzad Kianmahd, Chairman and CEO. “We are applying our experiences gained during that time to overcome today’s extraordinary economic challenges and long term uncertainty caused by the COVID-19 pandemic. We have reaffirmed our commitment to finance SMBs, which are the backbone of our economy, refreshed our underwriting standards, and are continually improving our infrastructure by investing in technology and communication tools for the benefit of our customers, vendors, brokers and team members.” 
 
During the second quarter, Maxim received numerous applications from business owners with strong credit but negative cash flow due to the economic downturn. Funded transactions for such borrowers included $95,000 secured by a 2019 Mack GR64F Tri-Axle Dump Truck for a growing landscaping company in New Jersey; $42,500 for a seasoned contractor’s purchase of a 2014 Caterpillar 312E Hydraulic Excavator; and, $29,000 to enable a business started up by seasoned contractors to purchase a 2020 Reinert ZR Concrete Pump.  
 
Buyers of used class 8 trucks faced numerous challenges during the second quarter, ranging from lenders shutting down without warning to closed DMVs. Maxim successfully funded deals across the country, including $26,500 for a California-based long-haul truck owner-operator to purchase a 2017 Volvo 780; $20,800 for an Ohio-based transportation company to purchase a 2017 Freightliner Cascadia; and, $23,000 for a Texas-based owner-operator to purchase a 2016 Freightliner Cascadia to replace a truck with mechanical issues.
 
“We are humbled and encouraged by our team’s commitment to positively impact our customers’ future success, and by our customers’ continuous effort to make tough but rational decisions to stay in business during these difficult times,” commented Michael Kianmahd, Executive Vice President.  “Based on our experience over the past few months, we are confident that SMBs across the nation will contribute substantially to the nation’s recovery from the biggest economic shock since The Great Depression.”
 

North Mill Appoints Four New Employees

 
JULY 20, 2020 - NORWALK, CT – North Mill Equipment Finance, LLC (“North Mill”), a leading, independent commercial lender in Norwalk, CT, is pleased to announce the appointments of Matthew Mosley as Broker Relationship Manager, Max Russell, Jr. as Asset Management Associate, Bryan Rosado Delgado as Asset Recovery Associate, and Jacob Keller as Staff Accountant.
 
Reporting to North Mill’s VP of Broker Relations, Mr. Mosley will leverage his more than twenty years of business development and customer relations experience to support North Mill’s growth operation. He began his career with Premier Funding Group before joining Financial Pacific Leasing in 2004 where he was a Broker Relationship Manager for more than 12 years. Prior to joining North Mill, Mosley was with Centra Funding where he focused on strengthening broker partnerships to maximize opportunity. A graduate of University of North Georgia, Mosley earned a BBA in Accounting and is a proud 11-year member of the Georgia Army National Guard, having served a one-year active duty rotation in Bosnia. A lifelong Georgia resident, he earned his CLFP designation in 2007.
 
Joining North Mill as a Jr. Asset Management Associate is Max Russell, reporting to the organization’s AVP of Operations. Previously, Mr. Russell was a sales representative at Haynes Materials in Deep River, CT.  Drafted in 2010 by the Los Angeles Angels, Russell played four years for the minor league team. He holds a BS in Sociology from Charter Oak State College in New Britain, CT. Also joining the team of North Mill’s AVP of Operations as Asset Recovery Associate is Bryan Rosado Delgado. Prior to accepting his new position, Mr. Rosado Delgado worked as a Financial Analyst at HEI Hotels & Resort. He proudly served in the US Marine Corps on the Fleet Anti-terrorism Security Team and holds a BS in Finance from University of Bridgeport.  
 
Another new member of the North Mill team is Jacob Keller who will join the Company as a Staff Accountant reporting to the VP, Controller. Before his appointment at North Mill, Mr. Keller was an Assurance Associate at PricewaterhouseCoopers (PWC). He holds a Bachelor of Science in Accounting and a Minor in Information Management Technology from Syracuse University, Martin J. Whitman School of Management, Syracuse NY.
 

North Mill Achieves New Record as July Originations Hit All-Time High

 
AUGUST 2, 2020 - NORWALK, CT – North Mill Equipment Finance LLC (“North Mill”), a leading independent commercial equipment lessor located in Norwalk, Connecticut, announced today that the company achieved an all-time high in loan and lease fundings in July. The record-breaking month saw funded volume reach nearly $18.5 million representing a growth rate of close to 24% over the same period last year.  
 
The company continues to ride a wave of success as just last month it reported record volume for the first half of 2020. “Despite the many challenges imposed by the global pandemic, the team at North Mill has worked harder than ever to help meet the needs of our broker partners and their customers,” said David C. Lee, Chairman and CEO.  “All departments are operating on high octane as each has stepped up to join the effort. It is through ongoing collaboration, a staunch commitment to do the right thing, and a genuine desire to succeed that has pushed us to a place we have never been. I could not be prouder of this company and the people who make it great.”
 
As the company continues to diversify amongst equipment categories and stronger credit borrowers, weighted average FICO in July exceeded 715. Transportation, which made up nearly 100% of the firm’s asset portfolio a few years ago, now accounts for well under 50% of funded volume with heavy duty sleeper trucks being less than 10%  As the organization’s asset mix has expanded, so too has the number of referral agents interested in working with North Mill. Each month continues to see more applications processed from equipment finance brokers looking to establish a relationship. 
 
To accommodate additional growth, North Mill is pleased to announce the appointment of Robert Fanelle as a Broker Relationship Manager, reporting to the company’s VP of Customer Relations, Paul Cheslock. His prior work experience managing brokers in a financial services setting is especially salient given that North Mill generates new business solely through third-party referral agents. Mr. Fanelle began his career with Canon Financial Services as a dealer representative, eventually graduating to roles as branch manager for TD Bank in Oaklyn, NJ and for PNC Bank in Vorhees, NJ.  In 2015 he joined Marlin Business Bank where he established and grew broker relationships.  He is a graduate of the University of Delaware, with a BA in criminal justice. 
 
Given its prolonged growth, North Mill moved its corporate office earlier this summer to a larger headquarters located at 601 Merritt 7, Suite 5, Norwalk, CT 06851. All email addresses and phone numbers remain the same.
 

Underground Construction Company Finds its Equipment Finance Partner in NFS Leasing, Inc.

 
AUGUST 12, 2020 - BEVERLY, MA - NFS Leasing, Inc. and Valor Underground have recently completed a third equipment finance agreement in as many months. 
Valor Underground is an underground construction start-up founded just three months prior to its first agreement with NFS Leasing. After signing a two-year contract for a construction project, Valor partnered with NFS to fund the necessary equipment to successfully complete the engagement.
“Helping start-ups begin to write their story is part of what makes NFS Leasing so unique as a story lender,” says Michael McClendon, Vice President of Business Development at NFS Leasing. “Continuing to be a part of that story is even more powerful. We value becoming a long-term partner with start-up businesses like Valor and in helping them achieve continued success.” 
“Starting a new business was certainly a complicated venture and one that can become very rewarding or unfruitful quickly,” Robert Opsenica, President of Valor Underground. “NFS Leasing has made sure that our story will end with the former being true. When we signed the two-year contract for a new project, we knew we needed to finance the equipment, but as a start-up, it was difficult to get anybody to listen. Thankfully NFS took the time to understand our business and help us find a way to get it done.”
 

Andrew Lopez Joins First Foundation Bank as a Credit Analyst I

 
AUGUST 21, 2020 – IRVINE, CA - Andrew Lopez has joined First Foundation Bank as a Credit Analyst I in the Equipment Finance Department. While servicing the equipment finance and leasing needs of the bank’s customers and prospects, the primary growth engine for this department is through Third Party Originations. Andrew has had several positions with companies in the finance industry, including as a Financial Analyst with Unicon Financial Services and, prior to that, Commission Early LLC. Before that, Andrew graduated from California State University, Fullerton, receiving double Bachelor of Arts degrees in Business Administration and Psychology. When he’s not helping customers with their long- term-asset financing needs, Andrew enjoys playing baseball and building computers. Andrew can be reached at (949) 668-7191 and our Equipment Finance Department is located at the Bank HQ in Irvine, CA. 
 

Channel Partners Capital Honored for Significant Growth 
For 8th Consecutive Year, Working Capital Provider Achieves the Inc. 500/5000 List 

 
AUGUST 21, 2020 – MINNESOTA, MN - Channel Partners Capital (Channel), a nationwide leading provider of small business financing, was ranked #1507 among the 5,000 fastest-growing private companies in the U.S. by Inc. magazine. This is the 8th consecutive year for Channel Partners Capital on the Inc. 500/5000 list. 
 
“Achieving that level of growth year after year represents the strength of our equipment finance company partnerships, the passion of our employees and a product suite that provides convenient access to financing for growing businesses.” Channel Partners Capital Founder and CEO Brad Peterson commented. “We are fortunate to have an experienced leadership team that focuses on our partnerships, our brand and our market reputation,” adds Peterson. 
 
“Of the tens of thousands of companies that have applied to the Inc. 5000 over the years, only a fraction have made the list more than once.” States Scott Omelianuk, Editor in Chief, Inc. Media. “A mere one percent have made the list 8 times.” Channel’s 8-year run is truly an extraordinary accomplishment. 
 
In May 2018, Channel closed on a mid-eight figure equity investment and a senior debt facility that will support over $300 million in annual funding, making Channel one of the most financially stable companies in the industry. 
In August of 2020, Channel Partners added equipment finance to is family of businesses, forming Channel Partners Equipment Finance. The group is based in the Channel Partner’s Minnetonka, MN office and is being led by industry veteran Cindy Fleck. 

 
CLFP DAY 2020

 
AUGUST 31, 2020 – NORTHBROOK, IL – At 5:00 Eastern, on Thursday, August 20th, almost 250 Certified Lease & Finance Professionals (CLFPs) and Associates across the globe gathered to celebrate their designation. Due to COVID-19, the event was changed from several local gatherings to one fifteen-minute Zoom “Cheers” call. During this call, executive director Reid Raykovich, CLFP and Board President Kevin Prykull, CLFP facilitated the event and showcased the accomplishments of the Foundation; highlighted the pivot to online ALFPs and test-taking; and recognized the many contributions of the Foundation membership.
 
Deb Reuben, CLFP stated, “It was such a blast to see so many familiar faces after being apart for so long. What a great opportunity to reconnect and celebrate together. Congrats CLFP Foundation.”
 
Kevin Prykull, CLFP added, “CLFP Day recognized the superb contributions of the foundation and its members who serve our industry in a very professional way. This is especially important during these difficult times. A win-win event for all who attended!"

 
TEQlease Capital Hires Stout For Public Equipment Finance Sector

 
AUGUST 31, 2020 - CALABASAS, CA - TEQlease Capital has hired Chris Stout as Managing Director – Public Finance. Stout will lead TEQlease Capital’s public equipment finance business, including federal, state and local taxable and tax-exempt equipment financing. Stout’s addition will complement TEQlease Capital’s existing commercial and education teams, and will allow the company to more fully serve its manufacturer, reseller and solution provider partners.  
 
Prior to joining TEQlease Capital, Stout, a 20 year public equipment finance veteran, held several roles in which he developed and oversaw portfolios of lease financing transactions with federal, state and local government agencies, created financing solutions "whole cloth" to program specific requirements for government agencies and contractors servicing those agencies. 
 
“We welcome Chris to the TEQlease team and are excited to add Chris’ wealth of expertise,” said Mike Lockwood, President of TEQlease Capital. “Chris will complement our existing public education equipment finance business, and allow TEQlease to broaden our offerings to our vendor partners”.
 

NFS Leasing, Inc. Completes Complex Story Financing for Second-Generation Family-Owned Welding and Gas Supply Business

 
SEPTEMBER 8, 2020  - BEVERLY, MA - A new equipment finance partnership has been established between NFS Leasing, Inc. and small business Ann Arbor Welding Supply Company. The family-owned and operated firm possessed a complex story that traditional lenders were having difficulty getting comfortable with. Luckily, NFS specializes in story lending and was able to provide Ann Arbor with the financial partner it needed during these complicated times.
 
Ann Arbor Welding Supply Company originated in 1963, and has been family-owned and operated ever since, with the current owners in place since 1974. It focuses on providing customers with high quality, professional gas and welding equipment and top-notch customer service. The second-generation family-owned operation was in significant need of manufacturing equipment. Upholding their high productivity standards for immediate and impending work was in jeopardy. The equipment financing agreement provides $230K allowing Ann Arbor to sustain and essentially increase its productivity. 
 
“Even businesses that have been around for 60 years need help sometimes,” says Craig Cooper, Vice President of Business Development at NFS Leasing. “It may not be our typical large finance agreement but providing financing and in turn allowing a family-owned business such as Ann Arbor to get the financing they need, is a very rewarding partnership.” 
 
“NFS was a pleasure to work with, as we quickly discovered that they share many of the same values as Ann Arbor,” states Chris Zombor of Ann Arbor Welding Supply Company. “We found that NFS focused on providing good financing and incredible customer service. The team at NFS worked alongside our team and together we were able to come to a solid agreement, where all parties came out the other side happy.” 
 

CLFP Foundation Announces 2020 Recipient of Cindy Spurdle Award of Excellence – 
Andrew Eller, CLFP

SEPTEMBER 11, 2020 – NORTHBROOK, IL - Certified Lease & Finance Professional (CLFP) Foundation announced the 2020 Cindy Spurdle Award of Excellence during the CLFP Celebration Day on August 20th, and officially presented it to Andrew Eller, CLFP of First American Equipment Finance (FAEF) during the monthly Foundation Board Call on September 10th. The award was created in 2012 to acknowledge the CLFP who has contributed the most to the industry and best represents the CLFP ideals for the year. Nominees are submitted by the CLFP membership and the final winner is voted on by the CLFP Board of Directors.
 
FAEF has 133 CLFPs and Associates and employs two of the nine Cindy Spurdle Award winners. Alan Sikora, CLFP and CEO at First American stated, “The CLFP program has enabled hundreds of professionals to gain a deeper understanding of our industry. At First American, it is a fundamental component of our professional development strategy.  Andrew’s commitment to his colleagues and our industry is inspiring.”
 
“It is an honor to be recognized as the recipient of the 2020 Cindy Spurdle Award of Excellence. The contributions that were made this year to successfully pivot the Foundation's operating procedures to digital experiences truly speaks to the resiliency of the Foundation’s Board of Directors, partnering organizations, current and prospective CLFPs. We have continued to grow and strengthen our CLFP community through the pandemic and I am grateful to have had the opportunity to be a contributing factor to this success. Thank you to the Foundation and all CLFPs for your unwavering dedication to continually educate our industry,” added Andrew Eller, CLFP.
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IN THIS ISSUE
AACFB President's Message
2020 Virtual Annual Conference
AACFB Welcomes New Members
AACFB Benefit Spotlight
Front and Center
PPP? EIDL? Payment Deferrals? The Positives and The Negatives
My One Key Sales Tip
The AACFB Value Proposition - A Member's Perspective
Brokers Beware
COVID-19? Oh, The Places You'll Go!
COVID-19: Relief Financing in a Tightening Credit Environment
Starting Anew - Finding Your Next Funder
Story Lenders Will Become More Important in the Days Ahead
Surviving & Thriving During COVID-19
Factoring to the Rescue
Legal Corner
Industry Buzz in the Biz
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