Equipment Leasing and Finance Association Chairman and First American Equipment Finance CEO Bill Verhelle says in an interview that his company routinely does deals up to $5 million, although on average projects run about $250,000; last year First American financed some $127 million in equipment. "We assign a high-level administrative contact to each new customer for the life of our relationship with that customer, and that's the only administrative person that person will ever have to deal with," Verhelle notes. "Unlike our competitors which use an assembly line process where they have a series of low-level people in a number of different departments that a transaction has to flow through before it gets finished, we have this high-level, single point of contact." Other unique elements of First American Verhelle cites include its centralized sales force and employees who are largely hired from outside the industry and trained. He points out that there are more than 4,000 equipment financing firms in the United States, but says that all of First American's large rivals have focused more on consolidation, which means that "Customers that needed things tailored to meet certain tax strategies or certain accounting strategies or certain business strategies, they had a very hard time getting any customization into their transactions because of the way these very, very large outfits had consolidated everything into these huge assembly lines with a bunch of 23-year-olds processing the deals." Verhelle considers the need to acquire new skills and responsibilities as the company expands to be the biggest challenge he faces, and he thinks the current market instability is a prime opportunity for First American "to gain some ground."
(Link to Source/Publication)

Commercial Building Rebounded in March

Commercial construction spending rebounded in March after declining for several consecutive months. The U.S. Census Bureau reports that private nonresidential construction spending during the month was at a seasonally adjusted annual rate of $382.3 billion, a 1.9 percent increase from a revised $375.3 billion rate in February. Meanwhile, the value of private residential construction continued to fall and was at a seasonally adjusted annual rate of $445 billion in March, a 4.6 percent decline.

$1.1 Billion Equipment Financing Commitment Obtained by Well to Wire Energy, Inc.

Well to Wire Energy, Inc. (WWE) has acquired a $1.1 billion equipment lease finance commitment from Canada West Corporate Finance Inc., according to an announcement from Coates International Ltd. The commitment will be employed for WWE's Coates CSRV engine generator acquisitions over the next five years pursuant to its licensing agreement with Coates. The commitment is founded on a WWE business plan that provides for the purchase of roughly 7,400 engine generators at a price per unit of $150,000. WWE services the American and Canadian oil and gas industry, and a definitive financing agreement is currently being finalized by WWE and Canada West.

Putting the Dimmer on Bright Lines

The Securities and Exchange Commission's (SEC) Committee on Improvements to Financial Reporting (CIFR) intends to eliminate bright lines in accounting, and such a recommendation could be included in a second round of suggestions for streamlining financial disclosure due to the SEC in the summer. The committee is suggesting the companies should alternatively employ "proportionate recognition" or additional disclosures when making accounting decisions that currently urge a bright-line test. For instance, in the area of lease accounting, when a company has to post its rights and obligations of a leasing contract, the accountants would consider the degree of right they have to an asset rather than measuring the value of that asset. The matter is especially relevant in the wake of the subprime-mortgage crisis where banks' use of off-balance sheet treatment for securitized transactions has come under scrutiny. There is a broad assumption in the accounting domain that percentage tests, strict thresholds, and numerical parameters in rules can encourage companies to improperly leverage them, with American Express' Brooke Richards noting in a May 2 roundtable that "Bright lines cause complexity and structuring opportunities." The migration to more principles-based accounting is also fueling support for CIFR's contention, and the committee will consider requesting that the SEC recognize the International Accounting Standards Board's effort in containing fewer bright lines in their accounting literature than U.S. Generally Accepted Accounting Principles.
(Link to Source/Publication)

Governance, Risk and Compliance Budgets March Higher

A report from AMR Research suggests that the governance, risk management, and compliance (GRC) budgets at financial institutions will expand by an average of 10.3 percent in 2008 to $3.4 million. Some 82 percent of respondents said their companies will enhance or add GRC, while just 5 percent said they anticipate budgets will decline in 2008. Respondents forecasted that their biggest expenditures would involve such areas as IT-specific risk management (28 percent), Sarbanes-Oxley or other financial governance efforts (17 percent), Basel II or solvency requirements (12 percent), and operational and general risk management (10 percent). The banks also revealed that they want to obtain technology through in-house built solutions (35 percent), on-site application supplied by an independent software vendor (23), and on-demand or usage-based solutions operated by an external organization (17 percent).
(Link to Source/Publication)

news summaries (c) copyright 2008 Information, Inc.

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To view a full brochure and register now, go to: http://www.elfaonline.org/pub/events/2008/TPR/ ELFA Human Capital Roundtable Individuals wishing to attend the ELFA 2nd Annual Human Capital Roundtable may now review the complete agenda and register by going here: http://www.elfaonline.org/pub/events/2008/HCR/ This roundtable, designed for human capital managers working in leasing and finance organizations, is scheduled June 17-18, 2008 in Chicago, Illinois, and will focus on critical talent management issues central to your business performance: (1) How to ensure your managers have the skills and knowledge to motivate their teams during tough times; (2) How to develop the next generation of leadership within your organization; (3) How to accelerate the quality and productivity of new hires; and (4) How to ensure your compensation strategies fit with your business objectives. 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