March/April 2012 Vol

newsA Publication of the National Equipment Finance Association line march/April 2012 Vol. 4, No. 2

National Equipment Finance Association

National Equipment Finance Summit

inside this issue: Approaching New Funding Sources Surviving the Crash Integrating Social Media Technologies Diversifying Your Product Offerings contents march/April 2012 • Vol. 4, No. 2

5 5 Ways to Approach New Funding Sources 5 By Mike Coon

9 surviving the Crash: A Lessor’s Perspective By Jeff Edwards

12 What the heck is going on out here! By Steve LeBarron

19 The Benefits of Diversifying Your Product Offerings By Evan Rabinowitz

12 DEPARTMENTS

17 NEFA TIDBITS 21 BROKER line iNdependent Brokers: The Future is Bright By Theresa Kabot

23 MEMBER line: Kip Amstutz C ceo / President, Mantis Financial LP

newsline

NEFA Headquarters Executive Director Newsline Editors Design & Production P.O. Box 69 Gerry Egan Lisa Rafter R&W Publishing Associates Northbrook, IL 60065-0069 847-380-5050 [email protected] 315 Poplar Ave, Suite P564 847-380-5050 main [email protected] Abigail Sutton Devon, PA 19333 847-380-5055 fax [email protected] 215-765-2646 www.nefassociation.org Senior Association Coordinator www.rw-assoc.com [email protected] Kim King [email protected] 847-380-5050 Advertising Sales [email protected] Lisa Rafter 215-765-2646 NEFA Newsline ©2012 is published by the National Equipment Financing Association. All rights reserved. All opinions www.rw-assoc.com expressed in the articles, analysis, interpretations, etc. within this publication are solely those of the individual. [email protected] For editorial information, please contact Lisa Rafter at 215-765-2646.

2 newsLine | MARCH/APRIL 2012 Letter From NEFA’s President

National Equipment Finance Association

NEFA 2012 Board of Directors Executive Committee What is your goal at this President Hugh Swandel conference? The Alta Group Maybe it is someone you need to meet with or a set of Vice President topics you need to learn more about. Whatever your John Rosenlund reason for coming to San Diego, it is up to you to opti- Portfolio Financial Servicing mize the value you get from the opportunity to network Company with your peers.

Treasurer Hugh Swandel, Conferences are an opportunity to learn more in three John Donohue Managing Principal days about your industry and how it works than any day Direct Capital Corporation The Alta Group you spend in the office or with clients. Industry association conferences put all participants in this industry in Secretary the same room at the same time! How great is that. Frank Peretore Take a sheet of paper and list the key issues you face running an equipment leasing and Peretore & Peretore, P.C. finance business. This list probably starts with origination and follows a transaction Immediate Past President through credit, documentation, funding, collection, legal, asset disposal and account- Chris Enbom ing. Add technology, funding, pricing and whatever else comes to mind. Next take a Allegiant Partners, Inc. look at the service providers attending the conference and put some of their names by each category (lawyers to legal, software providers to technology etc.) Every time you attend a conference you have the rare opportunity to learn a tactic Board of directors or innovation in every area of your business. Taking the time to target people who work in each area of the industry will help you get the most out of your conference Tara Aasand experience. Great American Insurance Questions on technology may mean thinking of the key issues you are facing with your William Ford current systems and asking some of the other service providers to show you how their Ford Financial Services, Inc. system addresses these problems. Perhaps you are trying to make changes to your cred- Kyle Gilliam it evaluation system to lower delinquency and defaults. Use the conference to compare Arvest Equipment Finance your tactics with your peers. You may learn about a credit report or evaluation method that could significantly change your portfolio performance. Brad Harmon First Star Capital If you see a strong session on legal issues introduce yourself to the presenters and talk through some recent legal strategies your firmed used. Perhaps you will find a legal Terey Jennings strategy you were not aware of and a new resource for your business. Financial Pacific Leasing, LLC You have the opportunity to learn about current lending terms (pricing, leverage, cov- Jesse Johnson enants), current competitors, more economical ways to service your portfolio, gain LeaseTeam, Inc. better returns on selling equipment etc. etc. etc. Tim Mathison Make a focused plan of what you want to learn at this conference and evaluate your P&L Capital Corp. results on your way home. Conferences are a phenomenal opportunity to make Jim Merrilees, CLP changes to your business that could take years to figure out. Come to each conference Inspection Services Division of focused and you will accelerate the performance of your company making it more RTR Services, Inc. competitive and stronger than your competitors who are back in their office instead of taking advantage of the opportunity to accelerate their performance. David Normandin Normandin Consulting Bruce Smith Hugh Swandel Diversified Capital Credit Managing Principal Corporation The Alta Group Gary Souverein Pawnee Leasing Corporation

newsLine | MARCH/APRIL 2012 3 Letter From NEFA’S Executive Director

y the time this hits the newsstands, we’ll be at NEFA’s 2012 National Equipment Finance Summit. I’m writing this four weeks in advance and already our registrations are almost half again Bmore than they were at last year’s Summit. I couldn’t be happier, but the reason isn’t just because of the conference’s registration numbers. Those numbers are just one additional sign of how our industry continues to improve and that’s a good sign for the economy at large. NEFA is seeing former members rejoin and attracting new members this year, both more signs that our economy continues to pick up steam. I’m happy for all the opportunity that’s presenting for NEFA members …and members-to-be! Gerry Egan As it does improve and as we all get busier we’ve got to be careful that we Executive Director don’t just fall back into the way we used to do things. We need to be sure we’re doing things and operating in ways that reflect the new marketplace that’s growing around us. This is a great time to evaluate everything about our businesses, from the inside out. To do that, the question to ask is, if we weren’t already operating the way we are, given what we know today, would we start operating that way? This applies to sales as well as to credit; to billing and to collecting; to operations and personnel. This is a huge benefit of NEFA membership. Connecting and mixing with other industry professionals, from all aspects of the industry, whether we happen to do business with them or not, is a way of seeing what we do through other people’s eyes if we’re open to it. As we listen to panelists in educational sessions, talk to funding sources or service providers at their booths, or simply chat with our peers at lunch, or at a more social networking opportunity, we should always be listening to hear how that person looks at things. How does that man or woman see this business differently than I see it that can help me see my own business differently and improve it? Our conferences, the Summit in March as well as the Funding Symposium, to be held this year in Washington, DC, September 13-15, are perfect places to get exposed to alternative ways of doing things but they’re not the only ones. Smaller meetings like the many local and regional events NEFA hosts each year also give the same opportunity. From luncheons, to ball games, to holiday parties and more, smaller meetings offer the opportunity to get to know other professionals in fun, relaxed settings and still work on improving our businesses. Fundamentally, that’s what NEFA is all about; improving our businesses. Education, networking, a services and funding source marketplace, this magazine; NEFA creates all those with that goal in mind. Now that our economy is picking up speed again and business projections, particularly for our industry, are really looking good, NEFA membership continues to be a critical tool to use in making sure we’re positioned for today’s and tomorrow’s marketplace and not mired down in yesterday’s. As soon as we get back from the Summit, we’ll begin working on the Funding Symposium, so if you have ideas you’d like to see presented there or want to be involved in the planning or presentation of the conference please contact the NEFA office right away.

Thanks. Oh, and even though it’s still four weeks off, I can tell you, the view from the Summit is great!

Gerry Egan Executive Director Direct Phone: 847-380-5052 Email: [email protected]

4 newsLine | MARCH/APRIL 2012 National Equipment Finance Association Members on the move

Ascentium Capital Appoints Business National Equipment Finance Association Development Professionals Ascentium Capital appointed four business development professionals to its vendor sales team: Jason Wise, Cassandra Rentfrow, Chris Cooper and Christopher O’Neil. Northland Capital Appoints Chief Credit Officer Northland Capital Financial Services announced the appointment of Vincent Drobniak as chief credit officer. Drobniak’s career spans over 30 years with a diverse background in the banking and financial services industry in the credit, risk and compliance areas. TAB Bank Announces Appointments TAB Bank added Steven M. Shaughnessy to the Business Development team as vice president and business development officer based in Seattle, WA. Valerie Swaner has also joined TAB Bank as business development officer, Equipment Leasing. She will be based out of TAB Bank’s national headquarters in Ogden, UT. Krajewski to Lead Direct Capital Sales Team Direct Capital has selected Daniel Krajewski to lead the company’s sales team. Krajewski has a wealth of experience in the equipment finance industry, having held executive-level positions at GE Commercial Finance. Dynamic Funding Hires Bayless as VP Dynamic Funding announced the addition of industry veteran Brad Bayless as vice president. Bayless has more than 20 years of expertise in the equipment leasing industry. Laird Joins Dakota Financial as Sales & Marketing Manager Charla Laird has joined Dakota Financial as its new sales and marketing manager. She previously held the position of broker services manager at Channel Partners, as well as positions at Pentech Financial and Mesa Leasing. Balboa Launches Commercial Vehicle Vendor Finance Program Balboa Capital announced the hiring of five professionals for its newly formed commercial vehicle vendor financing team. Jack Hirsh, Jim Bryan, Brian McDermott and Richard Parker are regional managers, and Wayne Pass is credit manager in Balboa Capital’s Vendor Services Group. This team of financing professionals has many decades of documented success along with a wealth of industry-specific knowledge. Alta Group Closes $50MM Facility for CLE Leasing in Canada Hugh Swandel, senior managing director of The Alta Group in Canada, announced the establishment of a $50 million facility for CLE Leasing, an independent provider of equipment leasing and financing to businesses across Canada. Nations Equipment Finance Opens Offices in Chicago, Cleveland, Tampa Nations Equipment Finance has opened offices in Chicago, Cleveland and Tampa. These new offices are in addition to existing offices in New York, Dallas and its headquarters in Norwalk, CT. newsLine | MARCH/APRIL 2012 5 5 Ways to Approach New Funding Sources

Why do some Lessors have success in rebuilding their funding sources while others can’t get a returned phone call? The landscape of funding has changed and so should your approach to new relationships. Here are a few tips from a seasoned Leasing Banker on how to position yourself and your company for successful relationships. By Mike Coon

ith the high turnover of funding sources in the Do not cold-call banks peddling a single deal. equipment leasing space, many lessors find them- Instead, do some homework before you pick up the phone. Read selves out shopping for new relationships to marketing materials, press releases and visit websites for poten- replace those that have left the industry. Why do W tial lenders. Take advantage of the information provided by some Lessors have success in rebuilding their funding sources industry associations such as NEFA to gather intelligence on the while others can’t get a returned phone call? The landscape of bank’s business focus. You should know where to find a Uniform funding has changed and so should your approach to new rela- Bank Performance Report (www.ffiec.gov/UBPR.htm) and how tionships. Here are a few tips from a seasoned Leasing Banker to decipher the information that is reported. on how to position yourself and your company for successful relationships. Next, make a list of targeted banks to contact. Reach out in an email and introduce yourself, include information on your com- 1. “Have I Got a Deal for You!” pany (see #2 below), indicate why you are contacting them and request a conference call to discuss a potential relationship fit. The Equipment Leasing Division at TAB Bank receives calls near- Like any sales effort, sell the appointment! The benefit for you ly every day from those seeking funding for their deals. It amazes is that with a set appointment, you should expect 100% of the me how many are cold calling banks without any real knowledge lender’s attention during the time allotted for the call. When you of whether the bank (1) has an appetite for the type of deal they call someone out of the blue, you should expect that you are have (transaction size, asset type, pricing, structure, etc); (2) will interrupting that person from something. Your chances of get- entertain “one-off” transactions from unknown third parties, and ting a captive and accepting audience are minimal and your first (3) actually require a formal relationship (originator approval, impression isn’t the one you’d prefer to leave. program agreements, documentation approval, etc) with lessors prior to accepting application packages. This approach implies Once you do have your appointment, don’t attempt to peddle a that the broker is simply trying to peddle a single deal to anyone single deal in the initial discussion, but rather discuss the larger that might be willing to listen and a long term relationship isn’t relationship opportunity, get to know more about the bank and likely to be anywhere in the picture. establish the next steps necessary to do business together.

6 newsLine | MARCH/APRIL 2012 2. Prepare a “Company Book” introduction to any interested parties and • Industry Focused update the book each quarter. Send the • Equipment Focused When so many lease originators are updates to prospective and existing lend- • Regional Focused (local vs. nationwide) scrambling to find funding, it is critical to ers. One side benefit from creating your • Transaction- Size Focused (small ticket separate yourself from the pack and posi- book is that the process has a tendency to vs. mid ticket expertise) tion yourself as an industry professional. expose weaknesses in your organization. • Structure or Lease-Type Focused (e.g. One effective way to relay your message Don’t ignore the signs, but use them as tax oriented leasing specialists) of professionalism is to prepare a “Book” an opportunity to make critical improve- • Vendor/Manufacturer Focused on your company. The book provides ments to your business. potential lenders with a comprehensive (formal programs, vendor agreements, introduction to your company and the 3. Have a Compelling private label) opportunity you bring to them. Many • End User Focused lenders, including myself, use this infor- Marketing Strategy • Repeat customer base or Referral focused mation in the originator approval process One primary consideration in prioritizing 5. Present a “Partnership as well. Lessor relationship opportunities at TAB Proposition” Your Book should contain the following Bank is the lessor’s marketing strategy: the information: “How, What, Where and Who” of their Plenty of lease originators make it abun- business model. Lessors that have a clearly dantly clear that their only real motivation • Company history and background defined and historically successful focus in the funding relationship is to earn their • Owner & Management bios or niche are more sought after than those fee. If your first set of questions to a pro- • Marketing Strategy (see #3 below) that “throw everything against the wall spective lender include “how high of a fee • Description of Staffing, Systems & and see what sticks”. Those that develop will you pay me?” and “how fast can you Technology and Operations expertise in certain niches bring more of pay it?” your intentions have become evi- • Historical Volume and Portfolio everything to the partnership (i.e. equip- dent and not necessarily to your benefit. Performance Data ment knowledge, industry knowledge, (Don’t misunderstand me; I recognize full • Examples of Transaction Packages remarketing capabilities, credit & docu- well the importance of being paid a fair and Lease Documents mentation requirements). Define your commission in a timely manner.) Other • Financial Statements or Summary focus and be prepared to articulate your self-serving motivations may be credit Financial Data focus to potential lenders. related (“how low are your credit stan- • Funding References Examples of niche-based marketing strate- dards?”), service related (“how fast can Use your company book as a way of gies are: I get an answer from credit?”) or pricing

newsLine | MARCH/APRIL 2012 7 related (“how low are your rates?”). associations, including the NEFA. You to position your company as one that lenders view as a professional and trust- Although all of the above are impor- should too. Maintain your membership in worthy source of originations. Some of tant aspects of any funding relationship, good times and in bad times. Take advan- the recommendations listed above require none of them demonstrate a willingness tage of educational advancement opportu- a change in approach, some require the to become a long term partner with the nities. Attend conferences and build your effort of preparation and others require lender. Instead, present a “Partnership network of industry contacts and experts. an investment of time and energy. All will Proposition”. Stay abreast of industry trends, legal & accounting issues and new technologies. pay off in their execution. Good Selling! • A Partnership Proposition is one in which Volunteer for association involvement. you provide a certain set of valuable and Prove that you are an industry professional tangible assets, services or capabilities to a who is in it for the long haul. Demonstrate funding relationship with the expectation that you are investing in yourself, your of receiving a reasonable level of service, company, your employees, your funding Mike Coon is Vice President fair compensation and competitive pric- sources and the industry at large. of the Equipment Leasing ing in return. Each party brings some- Division at TAB Bank, an thing to the table that provides mutual This will get you noticed and respected. It $800MM and growing and long lasting benefit. The parties pro- could also get you funding! Industrial Loan Bank tect each other from fraud and default. chartered in the state of Funding sources want to know they are Utah. He has worked The Partnership Proposition fosters qual- dealing with dedicated industry profes- in most areas of the industry including credit, ity communication and a give and take sionals who are invested long term. There collections, marketing and funding. Mike is very approach to accomplishing success. is probably no better way to demonstrate committed to the equipment finance industry, The key for you is to be able to convey your commitment to the industry than actively participating in the leasing industry associations. As a dedicated industry professional, this approach to a potential lender in a becoming active in an industry association Mike is often invited to speak or write on industry such as NEFA. sincere and demonstrable manner. One issues. He is a graduate of Central Michigan way is to… University. Mike, along with his wife, Shea and Conclusion daughter, Marianne, reside in Rockford, MI. 5. Get Active! Clearly, there isn’t a magic phrase that Over my leasing career, I have been lease lenders are waiting to hear in order an active member of several industry to do business with you. But you do have

8 newsLine | MARCH/APRIL 2012 Surviving the Crash: A Lessor’s Perspective The crash was four years ago. Since then, I’ve learned the hard way what it takes to survive a crash. So if you’ll make sure your tray tables are in the upright and locked position, I’ll be glad to walk you through the procedure. By Jeff Edwards

f you’re anything like me, when you get on a plane you a tailspin. As banks started to retreat or fail the credit mar- stash your carry-on, settle into your seat, and begin kets tightened. Many banks and lending partners either pulled thumbing through a magazine or the Wall Street Journal away from equipment leasing/financing or went out of busi- Iwhile you wait for take-off. At some point the flight atten- ness completely. dant begins to go through her safety spiel, but you hardly look Meanwhile, it became apparent that cheap credit was at the up: “mblemdemble mrteleb OXYGEN MASK blemble flem- heart of the growing crisis. Unfortunately for us, to that point blet mummum FLOATATION DEVICE mummmmmble...” we focused heavily on generating B/C credit leads through Have you noticed how those safety procedures deal almost prospecting the end user—and we knew that portfolio perfor- exclusively with what to do after the disaster? The big ques- mance could become an issue. tion is not how to deplane after “the unlikely event” of an So on the one hand, our sources of funding were disappearing. emergency landing, however. It’s how to survive that crash in And at the very same time—almost overnight, in fact—our the first place. Surviving the Crash, I used to think. Give that primary customer base vanished. It was like a double engine presentation and I’ll put down The Journal for sure. failure. We knew that this was going to end in more than just a Well, that was four years ago. Since then, I’ve learned the hard rough landing. We were going to crash and crash hard. Right way what it takes to survive a crash. So if you’ll make sure about then I could have used one of those oxygen masks that your tray tables are in the upright and locked position, I’ll be fall from the overhead compartment. And an air sickness bag glad to walk you through the procedure. for good measure. The Crash Reworking Our Business Model You lived it too. It was September, 2008. Lehman Brothers The first thing we knew we had to do was rework our business had just filed for bankruptcy. The financial sector went into plan. We made strategic decisions to place additional focus on

newsLine | MARCH/APRIL 2012 9 vendor-driven leads that would enable us Tapping into New Credit consequently we were slow to acknowl- to fund in industries that were continuing Sources edge the staffing implications of the mar- to perform well. This decision proved ben- ket shift. Our changing business model eficial for a few reasons: Because so many banks and lending part- and consolidated portfolio could no lon- Reason to Believe – Vendor-referred busi- ners were getting out of leasing, we had ger support our organization. When we ness historically has performed better than to redouble our efforts to develop and began to see signs of trouble toward the end-user-driven business. In the midst of maintain a healthy stable of new funding end of ’08, we remained reluctant to let the growing crisis, we needed that reassur- partners. Inasmuch as the field of possibil- anyone go. After all, we had built per- ance to keep pushing forward. ities was rapidly shrinking, it wasn’t easy. sonal and professional relationships with Access to Credit – The average FICO score Three tactics proved especially effective: everyone in the office. We were so eager, of our clients took a dramatic leap—to We increased our presence in multiple in fact, to keep everyone on staff that we well over 700. Since most lending part- associations (including NAELB, NEFA, even held onto marginal performers by ners were only financing “A” credits, that ELFA). reworking their commission plans. increase turned out to be an imperative. We aggressively networked with other It wasn’t enough, of course. We burned Efficiency – Our sales reps began focusing brokers/lessors nationwide and shared through hundreds of thousands of reserve on vendor relationships that would bear information about banking relationships. dollars that we had built up over the pre- the fruit of more than one transaction. We leveraged our references and portfolio vious couple of years—and the end of the Foundation for Success – Placing our focus performance with existing long-term rela- recession was nowhere in sight. By the on vendors in specific industries allowed tionships to help build new ones. time we actually made some cuts it was us to become experts in the eyes of our Looking back, there was nothing especially almost too late. We finally made the deci- clients and vendors—thus paving the way ingenious about that approach. The real key sion to go “lean and mean,” which meant for additional success down the line. was doing all three of those things simulta- we had to make major staffing cuts. For neously. Any one of those tactics would not That shift in focus resulted in a stronger me personally, it was one of the worst have been sufficient to carry us through. overall portfolio, which in turn saved our stretches of my professional life. We had business. I’m confident that had we stayed to let many good people go, sending them the original course, we would have been The Worst Kind of Losses out into a dreary job market. These were casualties rather than survivors of the At Envision we have always viewed our talented people whom I still consider good crash. employees as an extended family, and friends. The scars will be slow to heal.

10 newsLine | MARCH/APRIL 2012 Rebuilding the Team We realize that in order to thrive long- incentives. The new compensation plan is term we need to overhaul our marketing 100% transparent so that all of our sales With fewer people and a new and differ- strategy. We have spent countless hours reps can track their monetary goals. ent business model, we had to really pull developing a marketing plan that we together to keep our going and slowly The list goes on—which is as it should be. will be implementing in phases over the begin to rebuild. It took a couple of years We may have survived this crash, but we months ahead. for us to fully stabilize the business, but by can hardly afford to become complacent in the aftermath. One final lesson that we the end of 2010 we were ready to imple- We are also developing new products/ have learned from all of this is that we ment some new approaches that have services that will add value to our current have to keep pushing, keep innovating, proved very successful in helping us dig clients and provide supplemental income keep moving forward. You know what out of the rubble. to Envision. they say: The White Zone is for the imme- One issue that we knew we had to address We have also decided to restructure our diate loading and unloading of passengers was employee empowerment. Owning and sales compensation plans to include many only. NO PARKING. • running a small business requires that my additional monetary and non-monetary partner Brett and I wear many hats (Sales, Sales Management, Vendor Development, IT, Accounting, Marketing, etc.). With a smaller staff, there were just too many hats for those two heads to wear. So we sat down to develop a process that would allow us to delegate more projects to the rest of the team. We now prepare a 30-day list of projects and assign a champion to each one, using our weekly senior round- table to monitor progress. As a result, now we have more time to focus on Sales and Sales Management—and, not surpris- ingly, more projects are getting completed. This distribution of responsibility has provided a sense of pride and accomplish- ment throughout the organization, with a lift in morale as the natural byproduct. What’s more, we’ve gotten much better at follow-through, uncovering in the process one of the great truisms by which we now operate: The execution of a single project is far more important than several great ideas that never get finished. Looking Toward the Future Of course, rethinking our business in this significant way has produced many new ideas that we are eager to get to:

Jeff Edwards is part-owner and President of Envision Capital Group, a full-service financial solutions company focusing on commercial lending, equipment leasing, merchant processing and working capital/cash advance. With more than a decade of industry experience, Jeff is highly respected in his field with vast knowledge and expertise in sales, sales management, business development/strategy and operations. Jeff is an active member of both the National Association of Equipment Leasing Brokers (NAELB) and National Equipment Finance Association (NEFA). He can be contacted at 949-225-1712 or at jeffae@ envisioncapitalgroup.com.

newsLine | MARCH/APRIL 2012 11 12 newsLine | MARCH/APRIL 2012 What the heck is going on out here! The Integration of Social Media Technologies in Equipment Finance

I am a fan of the NFL Network. Football 24/7 is the best. One of the things that I like is when they play memorable footage from the NFL Films archives. One of my favorites is legendary Green Bay Packer coach Vince Lombardi running around the sideline during the heat of the battle, yelling out in his best New York accent to no one in particular, “What in the heck is going on out here!” This article looks at what’s going on in our industry with social media strategies and deployment in small business. By Steve LeBarron

am a fan of the NFL Network. Football 24/7 is the best. One of the things that I like is when they play memorable footage from the NFL Films archives. One of my favorites is legendary Green Bay Packer coach Vince Lombardi running around the sideline during the heat of the battle, yelling out in his best New I 1 York accent to no one in particular, “What in the heck is going on out here!”. Well – maybe Vince didn’t say “heck”, but you get the point. His sentiment is similar to what some of the members of the equipment finance market space are saying around the use of social networking technologies. Recently I was asked to co-facilitate a session at the upcoming NEFA Summit in San Diego, CA on this very subject. The session – entitled Needles in Haystacks – focuses on the “what the heck is going on out here” with social media strategies and deployment in small business. During my preparation I had both my suspicions confirmed and some surprises regarding how social media is being used by firms involved in equipment finance. Some of it made sense, some of it didn’t. With this said, it is happening, it is real, and it is coming to an equipment finance business near you. Social Media in B2B If usage statistics and metrics are what you want, there are plenty of both to be found on the internet from any number of service providers, consultants, media experts, and other interested parties. It comes down to which nugget you want to hang your hat on. Some are optimistic, others less so.

newsLine | MARCH/APRIL 2012 13 research. As an attendee of the NEFA Summit I received regular updates of the attendee list. I spent some quality time with the list and looked at web site home page associated with each. What I was looking for in each home page was the tell-tale icon(s) indicating their participation in any of the social media metaphors as in the GE Capital example described earlier. The optimistic front is led by a study pub- to take a look than the industry market My sample size is large enough – I looked lished by BtoB Magazine. They found share leader – the folks at GE Capital. at 85 entities’ web sites – to be what I in their 2011 study that “93% of all In the category of suspicions confirmed, believe to be an accurate snapshot of what B2B (business to business) marketers are they are in the ranks of the social media is happening with firms common to the engaged in some form of social media adopters. Their social media credentials NEFA market space. marketing, with most putting their focus are prominently displayed (I have circled) Of the NEFA membership websites I on what are referred to as “the big 3” - in their B2B site (see graphic above). looked at, there were some interesting LinkedIn, Facebook and Twitter”.2 It is a fact that there are a material num- things going on. A similar 2011 Accenture study took a ber of firms – make that a VERY material 95% of the entities had functional web- more measured approach. It indicated number of firms - leveraging social media sites. For the 5% that didn’t have a work- 42% of B2B firms have “some form of in the B2B marketing strategies. So what ing website (“under construction” does engagement”.3 are they getting out of it? It depends on not count) spending time getting a web There is a big difference between 93% who you ask – more on that later. presence should be a priority. and 42%. Which one is it? I think it likely Of those with a social media presence, the somewhere in between. Social Media in NEFA use of multiple platforms was the norm Membership with 86% using two or more platforms Social Media in B2B So if the GE Capital’s of the world are (see chart). Equipment Finance doing it, what about the smaller firms In terms of the number of platforms used, So what is happening in the equipment like those common to the NEFA member- the “big three” referenced earlier were finance market space? What better place ship? I wanted to find out, so I did some represented well in the NEFA sample.

14 newsLine | MARCH/APRIL 2012 Facebook, Twitter, and LinkedIn were clearly the most well represented social media platforms, with penetration rates in excess of 50% (see chart). What Does This Mean? So – what does all this mean? Why are these equipment finance firms getting involved with social media in their B2B marketing? How are they measuring the effectiveness of their efforts? Why Are They Doing It? With the 25% penetration rate found in the NEFA sample, it is confirmed that a material number of firms in the equipment finance market space are utilizing social media technologies in their B2B marketing strategies. It is reasonable to conclude that the utilization of social media in B2B marketing is real, people are doing it, and they have their reasons. Why? There are lots of reasons. Often times it depends on who

newsLine | MARCH/APRIL 2012 15 you talk to. I spent some time talking to marketers include: poorly defined success heck is going on”, what most firms want people. I talked to the believers - those metrics and key performance indicators.”6 as they move down the road is a greater understanding on the return on their engaged in B2B marketing with social What is difficult for B2B marketers to get social media investment. media both in and outside of the equip- their arms around is a predisposition to ment finance space. Their reasons ran the believe that large numbers, be it follow- It is this author’s opinion that firms both gamut from people trying it out - “we tried ers, “likes”, or any other metric tracked involved or considering involvement in it to look like we were cool” - to those by the platform is a good thing. While social media for their B2B marketing need with more methods to their approach who this is more true in personal side of social to have thoughtful answers to the follow- talked at great length about how social networking – after all, everyone typically ing to make it work: media was an essential component to their wants more friends, connections, etc., in • How will my involvement in social marketing strategy. B2B marketing success is measured by media help me develop a connec- The non-believers were represented as having interactions with a) prospects that tion with someone that needs my well - “Social media for B2B is a complete are a fit for your value proposition, b) product/service? waste of time and energy”. It is a polar- converting these interactions into business • How is my social media strategy izing topic. and c) grooming current customers to be converting customers into advocates? advocates for your company. Measurement & Resources What also struck me as interesting is the Continued on page 22 So how do you measure the effectiveness importance of messaging and content of social media strategy? It is challenging. management and the apparent limited ABOUT THE AUTHOR In the spirit of it doesn’t make sense, I sub- coverage of same. Maintaining message mit the following: and brand consistency utilizing multiple social media platforms is challenging and Steve LeBarron is a business consultant working with “About 75% of B2B marketers who con- risky if an afterthought. If you are going Constellation Financing Systems. duct social marketing say they do not to use social media as a tool, it needs to measure the ROI of their social marketing He is the founder of LeBarron be staffed and managed with people who & Olson Consulting Services, programs.”5 know the business. an independent management “When B2B marketers were asked to consulting firm focused on identify their top three obstacles to adopt- Making It Work providing defensible, objective, and fact-based ing social media marketing, 70% iden- enlightenment. His career includes over 25 years of While everything discussed in this article experience in the asset finance market space. He can tified a lack of resources as being the helps answer the question of “what the biggest obstacle. Other challenges faced by be reached at [email protected].

16 newsLine | MARCH/APRIL 2012 Volunteer of the Month National Equipment Finance Association tidbits Steve Crane Marketing Manager Bank of the West National Equipment Finance Association Our Association holds A BIG NEFA THANKS to Summit Conference Chairperson, Lynne numerous events Wicker, of RTR Services, for all the hard work on organizing this year’s throughout the year, and without the help of our Summit. Lynne’s able and willing Committee included Amy Spragg, member volunteers these of Pacifica Capital; Ana Holloway and Steve Crane of Bank of the West; events would not be pos- Tamara McCourt and Tara Aasand of Great American Insurance. sible. Steve Crane from Bank of the West has been involved with the Association for many years, and is one of NEFA’s 2012 Funding Symposium those volunteers that helps keep the wheels Washington, D.C., September 13-15 turning.

NEFA’s 2012 Funding Symposium will be held September 13-15, at a super, Steve’s first affiliation with our organization downtown Washington, DC location with a super room rate. As usual, NEFA was back in 1987 when we were known negotiated a price well below most other Washington hotels! as the Western Association of Equipment Leasing (WAEL). He was the Regional Perfectly situated between vibrant Dupont Circle, (where everything’s happen- Chair for the Bay Area for several years, ing), and the White House, (where everything else happens!), the Renaissance coordinating various meetings and golf Washington DC Dupont Circle Hotel is an intimate, updated hotel with its own outings while working at Taylor Financial. fascinating history. It’s close to two different Metro stations, lots of restaurants After Steve went to work at Bank of the and bars, George Washington University, Georgetown, and all the monuments West in 1995 he was active on the Ethics and museums on the National Mall. and Membership Committees at UAEL and You won’t want to miss the Symposium this year! If you’re interested in partici- also served as a Director for EAEL from pating on the planning committee or getting involved in any other way with this 2000 to 2003. exciting NEFA conference, contact the NEFA office today.” One of Steve’s favorite roles as a volunteer was that of Conference Chair for UAEL’s CALENDAR OF EVENTS Institute for Leasing Fall Conference in Monterey 2004 – he Professionals recalls “we had over 500 people attend June 28, 2012 that event and I still have people tell me National Equipment how much fun they had at the beach party Finance Summit Cincinnati, OH, hosted by Great American Insurance in Monterey”. Steve served on the CLP March 22-24, 2012 Foundation Board for four years and was San Diego, CA Annual Chicago President in 2005. He is currently working CLP Master Review Class White Sox Game on the Conference Committee for NEFA’s Spring Conference in San Diego. Steve March 22, 2012 August 6, 2012 Chicago, IL enjoys people and plans to continue his vol- San Diego, CA unteer efforts at the Association for many Atlanta Networking Lunch Annual Los Angeles Anaheim more years. April 11, 2012 • Atlanta, GA Angels Night Steve has been married to his college sweet- August 16, 2012, Anaheim, CA heart Cheryl for 28 years and they have two Annual Baltimore Crab Feast sons Ryan, who is a firefighter in Northern National Equipment June 14, 2012, California and Alex, who is a junior at Gunnings Seafood Restaurant Funding Symposium the University of Oregon. He enjoys the September 13-15, 2012 outdoors and is an avid backpacker, golfer Washington D.C. and triathlete.

ADVERTISER INDEX

Allegiant Partners...... 20 ECS Financial Services...... 11 LFC Capital...... 20 Asset Management Associates...... 5 Financial Pacific Leasing...... 15 Quiktrak, Inc...... 8 Alta Group...... 22 Great American Insurance Group...... 7 TAB Bank...... 14 Boston Financial & Equity...... 5 Lease Team...... 24 CLP Foundation...... 22 Leasing Solutions...... 15

newsLine | MARCH/APRIL 2012 17 18 newsLine | MARCH/APRIL 2012 The Benefits of Diversifying Your Product Offerings

As an equipment financing broker, it is in your best interest to stay with your customers throughout the life cycle of their business. By becoming the type of broker who can offer multiple solutions during each phase of the business owner’s growth, you will not only minimize the need to refer your customers out, but you will also gain their trust as they navigate the lending landscape. By Evan Rabinowitz

s the main source for your clients’ equipment This type of working capital has historically been difficult financing needs, you understand firsthand the to access for the Main Street businesses such as restau- complexities and frustrations associated with rants, auto repair shops, medical professionals and local Asecuring capital. Your customers go through services businesses. For business owners, banks present various phases of funding requirements throughout the the typical route – but often bring a time consuming pro- life span of their ownership and no two are ever alike. cess with increasingly uncertain results. Another common Those that are first starting out need financing to jump- option – leveraging personal credit – is risky to the house- start initial equipment purchases, hire employees and hold and can be expensive for the business owner. acquire a location for their business. And your clients A new category of working capital financing has emerged who have been in business for years need to invest in new in recent years, and is becoming an increasingly popular equipment to stay competitive. option with business owners. These are typically short As an equipment financing broker, it is in your best inter- term (3 months – 2 years) unsecured loans for amounts est to stay with your customers throughout the life cycle under $200,000. The loans are based more on the cash of their business. By becoming the type of broker who can flow of the business than on credit scores, which means offer multiple solutions during each phase of the business that the profitable auto repair shop whose owner has a owner’s growth, you will not only minimize the need to 640 personal credit score can still secure financing to hire refer your customers out, but you will also gain their trust and train new employees, invest in a new bay or launch a as they navigate the lending landscape. This in turn will marketing campaign. ultimately allow you to consistently increase your com- This new product is an example of the type of offering pany’s revenue. that presents a tremendous opportunity for equipment One common thread will remain with all of your custom- leasing brokers. In simple terms, you can think of it as the ers no matter how long they’ve been around: cash flow is “would you like fries with that” approach. You are work- the lifeblood of the business. Small business owners regu- ing with an existing customer who is already in “financing larly need capital to launch marketing campaigns, take mode” – you have the paperwork, you have their business advantage of unexpected opportunities such as discount- details – and now you can simply say “as we finance this ed inventory, or handle everyday obstacles like the burst new piece of equipment, would you like to apply for some pipe that immediately requires $20,000 for new flooring. working capital for your business as well.” It may add 10 There are also situations where the business is in a short minutes to the application process, but could add thou- term cash crunch while dealing with slow-paying custom- sands of dollars to your bottom line. ers or the slow part of their seasonal business. Each of The Internet is presenting business owners with more these situations represents a time when the business owner and more options for finding financing for their business, needs a short term infusion of working capital into their and as a result it’s important for brokers to make them- business. selves invaluable to customers. Providing financing for a

newsLine | MARCH/APRIL 2012 19 Independent Brokers: The Future is Bright

new piece of equipment will make a business owner happy – but providing them with an additional $10,000, $20,000 or $100,000 in working capital (the “fries,” if you will) will thrill them and make you that much more of a resource to them. It’s why these types of unsecured small business loans are the perfect addition to equipment brokers portfolio. In addition to being easily sold alongside equipment leases, they are typically funded in just a few days. And, to make it even simpler, the documentation required is often the same as your original equipment leases. This positions small business loans as the perfect add-on to your current equipment financing offering. You can now also reach out to your past clients that are still mid-term in their leases and inquire if they have financing needs outside of financing equipment. At On Deck, we have pioneered these alternative financing solutions, and to date we’ve delivered over $200 million to small businesses nationwide. Some of our most successful partners are equipment brokers who actively market working capital financing to their current customers, past customers and their prospects. It’s important to stay with your clients during their various financing needs, and have a diverse portfolio available to meet their changing requirements over time – whether that is equipment lease or short term working capital. This means that while growth can sometimes depend on finding new business owners looking for equipment, in order to truly serve your customers and reach the next level you should have access to every option on the table. •

ABOUT THE AUTHOR

Evan Rabinowitz is responsible for developing strategic referral relationships at On Deck, the first technology platform to connect small businesses directly to capital. On Deck offers working capital financing to restaurants, retailers, physicians and local service business, and has delivered over $200 million dollars to date. Evan joined the company in 2010, and during his tenure has recruited and trained more than 400 funding partners to On Deck. His responsibilities also include sourcing new partners through vertically aligned associations, spearheading training programs and managing ongoing relationships. Evan’s past experience include significant roles at several financial-services based startups. Evan can be reached at [email protected].

20 newsLine | MARCH/APRIL 2012 BROKER line Independent Brokers: The Future is Bright

By Theresa Kabot

tockbroker, insurance broker, and rates. Throughout this evolution the thrive. Gary Souverein, President and investment broker, mortgage bro- TPO has positioned themselves to respond COO of Pawnee Leasing Corporation ker or equipment lease broker… to changing needs by offering an indepen- agrees, “…the future for the indepen- Sno matter what kind of broker, dent risk based funding source during dent broker is bright. The truth is there chances are only two out of five bro- challenging times or during the inception has been a cleansing albeit painful, in our kers that existed in the early 2000s are of the business while offering terms and entire industry. This was needed follow- still doing business today. According to rates equitable to bank financing as the ing an overheated credit environment and a survey conducted by Access Mortgage business becomes stronger and well estab- we believe a healthier environment will Research and Consulting Inc of Columbia lished. If a banking institution denies a emerge. While it will be a slow process, Maryland the number of mortgage bro- borrower they have no other alternative there will be new entrants on the funding kers in the United States peaked between except to restart the process with another side of the business as demand increases.” 2002 and 2006 with over 50,000 brokers bank. A broker and TPO have a thorough serving the mortgage industry. This num- understanding of the transaction and can Now is an ideal time for a broker to solid- ber is now at a twenty-year low of less pursue other options, which offer a wider ify their share of the market and posi- than 15,000 mortgage brokers. No mat- variety of funding possibilities. The function themselves for eventual recovery. ter what the industry, the fact remains tion of the broker and TPO as a sales Yes, eventually, it will happen. However the number of brokers delivering services channel has been of great service and there is little doubt recovery is going to in the investment and finance sector has value to vendors, end users, lenders and be slow. Proper vetting and due diligence been decimated. Does this have any valid independent funding sources. with research and credit development should be maintained in addition to thor- comparison to the broker and third party While the number of bank losses has been ough presentations with accompanying originator (TPO) in the commercial equip- decreasing, low interest rates and new financial packages. Brokers need to be ment finance sector? regulatory requirements have resulted in focused on being aligned with a range of There continues to be much discussion in fewer credit approvals and stagnant loan established funding sources and banks the equipment finance sector about the growth. Due in part to the Dodd Frank who demonstrate commitment to the continued viability of the broker and third Act, banks are facing tighter regulation value of the TPO channel. Further, once party originator (TPO) model. Exactly and many investment companies are stay- what function does the broker and TPO ing away from bank affiliation to avoid the transaction is booked stay in touch provide? Is there a role for the equipment tougher laws with the realization that with funders to ensure customers remit finance broker and TPO to contribute to being part of the bank system will require in a timely manner. The TPO is value the rebound of economic growth? And if more stringent capital requirements and added and doesn’t hesitate to get involved the answer is yes, what is the macro role will not accommodate structures that even after the transaction has booked. A of the broker and TPO? are based on a risk pricing system. well performing broker portfolio speaks Commenting on the December 2011 sale volumes with banks and independents. The lease and finance broker equates of MetLife Bank’s depositor business to to the sales engine that has long been a Continued on page 22 GE Capital Paul Menzel, CLP, President part of the financial products delivery and CEO of Financial Pacific Leasing said, system. The broker’s ability to maintain “Due to its structure and collateral, equip- ABOUT THE AUTHOR numerous funding partnerships provides ment leasing is not weighted 100% for multiple funding options for both the capital adequacy purposes and therefore manufacturer/vendor and end user alike. Theresa Kabot, CLP is Manager, requires more capital to be held against Successful TPOs are experts in these areas Kabot Commercial Leasing those assets. Bottom line, it will probably of relationship management and provide LLC. Theresa began her career force ‘banks’ to be more conservative in valuable financing services for multiple in commercial equipment their lending and pricing to meet capital financing at Pitney Bowes equipment acquisitions over the years as requirements and ROE hurdle rates. This subsidiary, Colonial Pacific the end user’s business grows. TPOs are will create opportunity for the TPO mar- Leasing. She established skilled at developing local relationships ket.” Menzel added, “I think the slice of Kabot Commercial Leasing LLC in 1996 in Seattle, and an in-depth understanding of their cli- the ‘non-bank’ segment will continue to Washington. A graduate of Colorado State University, ents business, customer base and industry, Theresa is an active member of the National be significant enough to support a vibrant on the one hand, as well as then present- Equipment Finance Association, NEFA and the TPO industry.” ing the banks and funding sources with National Association of Equipment Lessors and funding opportunities in comprehensive Emerging technology and tighter regula- Brokers, NAELB. She has served on the UAEL Board financial packages. And as their clients tions may cause concern for some, how- of Directors, volunteered on numerous committees grow and become more financially secure ever others see it as a sign that the broker with NEFA, UAEL and NAELB, is Past President of the CLP Foundation and has been an instructor for the they will of course insist on better terms model as a sales channel will continue to Institute for Leasing Professionals.

newsLine | MARCH/APRIL 2012 21 Social Media BrokerLine Continued from page 16 Continued from page 21 • Can I measure how social media driven prospects turn into customers? Trust, credibility and dedication count • How do I ensure my social media messages are consistent with my brand not only with your vendors, lessees and and value proposition? debtors but with your funders, too. Next, continually strive to learn more and net- Conclusion work through the array of opportunities and funding sources offered through What the heck is going on out here? When it comes to using social media for B2B market- membership by industry associations ing in the equipment finance market space there is much going on. Estimates quoted in like NEFA and the Certified Leasing the article range from 42% – 93% of firms are engaged using social media in their B2B Professional accreditation offered by the marketing. The NEFA sample shows a 25% penetration. Irrespective of the number you CLP Foundation. choose, it is a material number. If your company is not a user of social media today, you will likely be in the future. Technology undeniably plays a key role in setting apart the competition but will Both the overall B2B market and the equipment finance market space are using multiple never replace visiting your customer’s technologies, with Facebook, LinkedIn, and Twitter the most common combination of platforms. In the equipment finance market space reasons for engagement with social office, shaking their hand and under- media vary from whimsy to a well thought-out strategic approach. There are strong standing how they operate in addition opinions as to the efficacy of using social media for B2B marketing from both believers to their financial statements. We are all and non-believers. Measurement of return in investment and key performance metrics is in business to make money but it is not challenging and difficult to track. the be-all and end-all of success as the deal is not over when the deal books. We While there is much going on, what is it leading to? Will the utilization of social media are all in business to offer and contrib- revolutionize B2B marketing in equipment financing? I think not. Will the utilization of ute value and that means helping clients social media evolve to be an important tool in the equipment finance marketing mix? Yes be successful time and time again. The – over time we will see more penetration and an evolution in improvements in measure- ments, integration, and coordination. last few years have given us all plenty of time to evaluate and look at opening Back to the NFL Network - we are in the first quarter of the game. There is much left to go. • our creativity to uncover new ways to do 1http://www.youtube.com/watch?v=lbNidYYGjic business better. Now is the time to learn 2http://socialmediab2b.com/2011/04/93-of-b2b-marketers-use-social-media-marketing/ from what has happened in the past and 3 http://www.accenture.com/us-en/Pages/insight-making-social-media-pay.aspx to mold your business into what you 4http://socialmediab2b.com/2011/04/93-of-b2b-marketers-use-social-media-marketing 5Ibid really want it to be. •

$50,000,000 Committed FaCility The undersigned initiated the transaction and acted as exclusive financial advisor to CLE Leasing.

HugH Swandel Senior Managing director the alta group winnipeg, Manitoba 204-477-0703 [email protected]

22 newsLine | MARCH/APRIL 2012 Member line Kip Amstutz CEO / President, Mantis Financial LP Pursuing the Entrepreneurial Dream

Returning home to Texas after a year in the Caribbean, Kip set- tled in Austin and went to work for a small equipment leasing company that was rapidly growing and hiring sales staff. He had a unique opportunity learning all facets of the business: credit, collections, and sales cycles in many different industries (agricul- ture, commercial and consumer auto). The company grew to 30 employees, and Kip was named the manager of the commercial sales staff and oversaw 7 sales associates. As he learned more about the industry and the company, he and the comptroller/ credit manager began to realize that there were some unethical practices occurring on a daily basis at the company. They ended up uncovering a bank fraud scheme, turning the president into the FBI, and that president was sentenced to just under five years in prison. Kip hired two of the employees, partnered with his father, and opened his office in early September, 2001. The name of the company was Mantis Financial, and the staff was able to bring many clients and bank relationships over from their previous company. Mantis Financial currently has 5 employees and its principal line of business is discounting transactions to five local banks in Texas. In addition, they have a separate company (Mantis Capital) that they use as a capital source to fund equipment finance transactions. Kip is currently a board member of the OneWorld Leasing Cooperative. In May 2010, Kip teamed with industry veteran Chris Fielder tatistics show that a large percentage of college gradu- and started 360 Equipment Finance, which currently serves the ates end up working in industries that are different from broker community as a small ticket structured lender. their course of studies in college. This is not the case with Kip Amstutz, President of Mantis Financial Equipment Kip is married to his lovely bride of seven years, Paige Amstutz. S Paige is a commercial litigation attorney with the law firm of Finance and Partner in 360 Equipment Finance out of Austin, Texas. However, it took him two years to make his way back Scott, Douglass and McConnico in Austin. They have two to his dream of owning his own business and working with children (Parker – age 5 and Lexi – age 3). Kip’s passions are numbers. his business, his family and his church. He also spends many hours coaching his son’s basketball and soccer teams. He and his Kip grew up in San Antonio, Texas and ended up having a wife teach a Children’s Sunday School class and love to attend double major at Baylor University in finance and entrepreneur- University of Texas sporting events together. (even though he ship. He was also a four year letterman on the men’s tennis team attended Baylor!). One of their highlights was attending the and captain of the team his junior and senior years. His first 2005/2006 BCS Rose Bowl National Championship and watch- job out of college was working for Coca-Cola in their marketing Vince Young lead the Longhorns to victory over the USC ing department. Kip and his two best friends from college were Trojans. Kip’s other hobbies are hunting, fishing and golf. He hired as a three man marketing team to travel the East Coast for and his father have a ranch they own west of Austin and are cur- a year to help roll out Cool from Nestea, Coke’s new tea prod- rently raising a small herd of Texas Longhorns. • uct. Spending time in Miami, Tampa Bay, Orlando, Atlanta, Philadelphia, Pittsburgh, Washington DC and New York City was a great experience, but living out of a suitcase got old and Kip was ready to move on to a new challenge. For the next year, Kip was a tennis teaching professional at four different resorts in the Caribbean: Palmas del Mar Resort in Puerto Rico El Conquistador Resort in Puerto Rico Malliouhana Resort in Anguilla Caneel Bay Resort in St. John, US Virgin Islands

newsLine | MARCH/APRIL 2012 23