A $168 billion economic stimulus package recently passed by Congress could provide a major boost to small businesses, with restaurants, bars, and other merchants banking on higher business from consumers spending their tax rebates. "Small businesses are doing better than the rest of the economy," notes the National Federation of Independent Business' Dan Danner. "They are one sector that continues to create jobs, but they are not doing as good as they could do. If you're going to stimulate the economy, this is the group to help." The legislation grants companies a 50 percent bonus deduction on new equipment that would normally be depreciated over many years while also raising the limit on expenses that small businesses can deduct from annual income from $128,000 to $250,000. These advantages should particularly benefit smaller firms such as Illinois-based Dahm Trucking. Company president Chris Dahm says he can now purchase three $100,000 trailers, allowing him to enter contracts with three independent owner-operator truck drivers to transport goods on the trailers, as well as hire another office employee. Thanks to the package, many more small businesses that could invest in office equipment, vehicles, machinery, and similar products will likely do so, according to Danner.

Narrow Pass Spells Trouble for ILC Bill

The Senate Banking Committee has voted to pass a bill prohibiting commercial ownership of industrial loan companies (ILCs), with several Republicans complaining about an exemption for automakers--but despite calls for compromise, Senate Banking Chairman Sen. Chris Dodd (D-Conn.) promised to continue to support the legislation, and warned that Republicans would shoulder the blame if the bill fails to pass the full Senate. A bill that the House passed earlier with broad bipartisan support would have banned the ownership of ILCs by companies that derive over 15 percent of their revenue from commercial activities without an exemption for automakers, although House Financial Services Committee Chairman Rep. Barney Frank (D-Mass.) said last year that he was ready to insert an exemption if it would help garner Senate support. Supporters of the Senate bill insist that the exemption is needed to eliminate a lack of competitive parity in the auto industry, with Sen. Richard Shelby (R-Ala.) arguing during the vote that "if the committee has concluded that the commercial ownership of banks presents an unjustifiable risk to our financial system, certainly the ownership of banks by automobile manufacturers should be no exception." Shelby also said that the hearing record for the legislation did not adequately justify numerous amendments the proposal would impose, pointing out that ILC owners would face consolidated supervision by the Federal Deposit Insurance Corp. Sen. Robert Bennett (R-Utah) also believes that the ILC bill is excessive. "It's clear we're not in ground where we can make a deal yet," he noted following the markup. "I've always said that I'm willing to talk about some changes, but these are not the changes that I would go for."

Fitch: Equipment Lease Delinquencies Increase in December 2007

Delinquencies in equipment lease asset-backed securities increased in December across both the small/mid-ticket and heavy metal portfolios, according to Fitch Ratings. Thirty-to-60 day delinquencies in the small/mid-ticket portfolio were 1.46 percent in December versus 1.28 percent in November and 0.89 percent in October, while the 60-90 day bucket experienced a slight increase to 0.38 percent in December. Late-stage delinquencies rose from 0.54 percent to 0.65 percent between November and December. Meanwhile, Fitch has determined that delinquencies in the heavy metal portfolio are in keeping with historical seasonal trends with their continued gains in the fourth quarter. The 60+ day bucket increased from 0.33 percent in October and 0.37 percent in November to 0.45 percent in December, while the 2007 fourth quarter average of 0.38 percent is below the 0.43 percent average of the previous quarter. As a result of the steady rise of equipment lease delinquencies and losses over the past six months, Fitch anticipates that the rate of upgrades will decline this year, although the agency projects that negative rating actions should be limited because current levels of delinquencies and losses remain within historical levels and maintain adequate support for credit enhancement.
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Sterling Says Scheme Contained

According to Sterling Financial Corp., the loan scheme involving its Equipment Finance LLC unit did not extend beyond the unit. In a Securities and Exchange Commission statement, Sterling says Equipment Finance's COO, executive vice president, and a handful of other individuals were involved in the scheme. The statement went on to say that those involved ignored Equipment Finance's loan process and subverted its internal controls. "This sophisticated scheme involved concealing credit delinquencies and falsifying financing contracts and related documents, all designed to defeat Sterling's established internal controls and reporting systems," the statement says. Sterling says it will restate its results from 2004 through 2006 to deal with a $200 million charge related to the scheme.

Economists Predict More Gloom for Housing

Economists at the International Builders' Show in Orlando this week said the decline in residential construction and home sales will continue through early next year. Speaking on day one of the event, which opened on Feb. 13, National Association of Home Builders chief economist David Seiders predicted that single-family home starts nationwide are likely to fall 27 percent this year after 2007's drop of 30 percent and added that retreating residential prices will help jump-start construction and sales but also make homeowners nervous about spending and create risks for the overall economy.
(Link to Source/Publication)

news summaries (c) copyright 2008 Information,Inc.

IMN/ELFA Investors' Conference on Equipment Finance: New Speakers and Topics Announced Information Management Network (IMN) and the Equipment Leasing and Finance Association (ELFA) are pleased to announce that G. Edward Leary, Commissioner of the Utah Department of Financial Institutions, has signed on to speak at the Seventh Annual Investors' Conference on Equipment Finance. His presentation will be held on March 11 in New York, NY. Commissioner Leary's leadership and expertise extends to the Board of Financial Institutions, the Utah Housing Corporation Board, the State/Federal Working Group (comprised of the Directors of Supervision for the Federal Reserve and the FDIC), and the Utah Money Management Council. He joins the conference this year as part of a panel to discuss Industrial Loan Companies as Funding Mechanisms, which will examine the structure of ILCs and their relative value as a funding tool. The Industrial Loan Companies panel has never before been on the conference's agenda, and it's inclusion by popular demand proves the ability to present the most thought-provoking and timely topics of this diverse industry sector. Over 200 delegates have signed up to network with industry leaders and peers and learn the latest trends in equipment finance and securitization. For more information, please visit http://www.imn.org/esb1064/pr2. Doing Business in India: Opportunities and Challenges in Equipment Leasing India is generally open to foreign investors. Despite the slowdown in leasing from 2000 to 2005 and state governments seeking higher tax revenues, the business climate appears to be changing for the better, and there are innovative but legal ways to deal with potential obstacles. Find out more by reading, "Doing Business In India: Opportunities And Challenges In Equipment Leasing, " written by Ferdinand O. Sia and Gmelina O. Guiang for the Journal of Equipment Lease Financing, published Equipment Leasing & Finance Foundation, and is available in the Winter 2008 issue for download at http://leasefoundation.org/JELF/ The Equipment Leasing & Finance Foundation publishes the Journal three times per year. Subscriptions are available through the Foundation website, www.LeaseFoundation.org Beef Up Your Credit & Collections Front Line! ELFA's 2008 Credit & Collections Conference and Exhibition June 1-3, 2008 Hyatt Regency Philadelphia, Pennsylvania In any leasing and finance organization, the credit and collections staff is the front line for your bottom line, a vigilant and active force protecting the company and its revenue stream. And they need the best tools and intelligence to get the job done. ELFA's Credit & Collections Conference is the place to obtain those tools and information--from a "state of the economy" keynote address by Standard & Poor's Chief Economist, David Wyss to learning the top portfolio management strategies in buying and selling portfolios. No other event offers more to aid credit and collections professionals. The program also includes: --Asset specific discussion roundtables --Bankruptcy issues --Outsourcing vs. In-house --Benchmarking & best practices in collections and credit tools --Compliance issues affecting the equipment finance industry --A panel of Chief Risk Officers --And More... Plus, there will be plenty of networking time to establish and cement valuable professional relationships! To view the schedule of events and to register, go to http://www.elfaonline.org/pub/events/2008/CCM/ The Credit & Collections Conference and Exhibition is an opportunity to protect your bottom line by investing in your front line! Register for the National Funding Exhibition Today Registration is now open for the 20th annual ELFA National Funding Exhibition, April 16 - 17 in Chicago. For two decades, the Funding Exhibition has been bringing together equipment finance companies and funding sources in a unique, cost-effective and highly efficient event. And today, with the liquidity crunch, the Exhibition matters more than ever. Register today! http://www.elfaonline.org/pub/events/2008/NFE/#att Financial Institutions Conference Provides Market Updates on Key Industry Sectors Once again the ELFA Financial Institutions Conference will provide attendees with the most up-to-the minute analysis of key market sectors in which banks and other financial institutions invest. Included on the agenda, which is scheduled March 16-18, 2008 at the Hyatt Regency in Orlando, Florida, are sessions on corporate aircraft, trucking, marine, construction, renewable energy, rail and oil and gas. A few of these are highlighted below: - Oil and Gas John E. Olson, SVP and director of research for Sanders Morris Harris, Inc., will be the featured speaker during this session. With over 30 years experience covering all phases of the oil, gas and electric industries, Mr. Olson is one of the industry's top natural gas analysts. Described as "The Energy Analyst That Enron Couldn't Buy" by the Houston Chronicle, Mr. Olson will provide an analysis of the Oil and Gas sectors. - Construction Two powerhouse construction analysts will make up the construction panel. Scott Hazelton, director, Construction Services, Global Insight, Inc. and Don Johnson, chief economist, Caterpillar, Inc. will review the impact of changes in the construction industry on various equipment types and the outlook for 2008. For a review of the complete agenda, to register for the conference and to obtain hotel information, please go here http://www.elfaonline.org/pub/events/2008/FIC/ Be sure to make your hotel accommodations before the February 25th deadline to receive the special conference rate.