newsA Publication of the National Equipment Finance Association line JULY/AUGUST 2012 Vol. 4, No. 4

National Equipment Finance Association

technology & operations inside this issue: Be Careful What You Wish For The Changing Face of Portfolio Management Electing to Get Paid In A Chapter 11 Bankruptcy contents JULY/AUGUST 2012 • Vol. 4, No. 4

7 be careful what you wish for 9 By Mike Cumby

9 THE changing face of portfolio management By Joe Andries

14 a foot in two worlds! By James E. Coston

DEPARTMENTS

12 BROKER line Setting the Goal, Keeping the Focus, Making it Fun By Gabe Jarnot

16 LEGAL line ELEcting to get paid in a chapter 11 baNkruptcy By Geoffrey J. Peters

20 NEFA TIDBITS 22 MEMBER line: Daryn Lecy, Stearns Bank 16 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 847-380-5052 [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] 847-380-5053 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 | JULY/AUGUST 2012 Letter From NEFA’s President

National Equipment Finance Association

NEFA 2012 Executive Committee President Hugh Swandel A Great Reminder of Why We The Alta Group

Vice President Belong to Associations John Rosenlund Portfolio Financial Servicing Company have belonged to industry associations for many years and was recently reminded of why I partici- Treasurer pate in conferences and boards at every opportu- John Donohue nity. I was attending a board meeting of a leasing Direct Capital Corporation I association in Canada and one of our long time mem- bers was retiring. Our association President presented Secretary the individual with a plaque and thanked the member Frank Peretore for 30 years of participation and service. This partic- Peretore & Peretore, P.C. ular member had been very helpful at the committee Immediate Past President and board level and had constantly helped with some “heavy lifting” when the association really needed help. Chris Enbom Hugh Swandel, Allegiant Partners, Inc. Managing Principal The reaction of the member to the acknowledgement The Alta Group was what took me by surprise. In a very emotional speech he made a point of telling us that it was he who Board of directors needed to be thanking the members of the association! He went on to tell everyone that as a small regional leasing company he had no one to turn to with questions or issues Tara Aasand about running his business. He made it clear that without the association and its mem- Great American bers his company would never have accomplished nearly as much and would definitely William Ford not have achieved the earnings and performance when facing tough economic times. Ford Financial Services, Inc. His thank you speech was heart felt and he was truly of the opinion that he had gotten much more in return from his years of service than he ever put in. Kyle Gilliam Arvest Equipment Finance This was a great reminder of the long term benefits of association membership and of how many of us are too short term in our expectations. I always attend conferences Brad Harmon with goals and objectives for each show but when I look back at the years of contacts First Star Capital and knowledge I have gained from participation it reaffirms my belief that participat- Terey Jennings ing in associations is critical to success in any industry. Financial Pacific Leasing, LLC The members and staff who make up NEFA have worked diligently and with dedica- Jesse Johnson tion to navigate through tough economic times and remain focused on providing the LeaseTeam, Inc. value to each other that we set out to create when NEFA and our predecessor associa- Tim Mathison tions were created. I know I speak for our committee and board members when I say P&L Capital Corp. we are all fortunate to have such a dynamic group of members who can help each other continuously improve our businesses and our industry. Jim Merrilees, CLP Inspection Services Division of Thank you for being a member—I hope your rewards are as great as mine! RTR Services, Inc. David Normandin Hugh Swandel Normandin Consulting Managing Principal The Alta Group Bruce Smith Diversified Capital Credit Corporation Gary Souverein Pawnee Leasing Corporation

newsLine | JULY/AUGUST 2012 3 Letter From NEFA’S Executive Director

As Willie Nelson Might Say— or Sing: On the road again! s I write this I’m sitting in a small RV park near Huntington, West on my way to one of NEFA’s Institute for Leasing Professionals two day courses in Cincinnati, Ohio. More about Athat later. Gerry Egan Last week, I was in Baltimore for the umpteenth NEFA Crab Feast. With Executive Director roots going way back into the old EAEL, no one at the Crab Feast could remember for sure exactly how many years that event’s been going on, but everyone who attends it remembers, from year to year, how much fun it is. This year, in another great, posi- tive sign, both for our business and for our Association, participation was up more than twenty percent over last year. On the way home, I stopped in Washington, DC, to meet with the hotel staff at the site for the upcoming 2012 Funding Symposium, September 13-15. The Renaissance Washington, DC Dupont Circle Hotel, all fully redecorated in recent years, is a beautiful, modern hotel with an interesting history. It’s what you might consider a ‘boutique-type’ hotel, set right in a downtown city block by the intersection of M Street and New Hampshire Ave. It’s about four blocks to Dupont Circle, one of the centers of Washington night life, and only about six blocks into Georgetown, known for its many restaurants, bars, shops and great old buildings. Depending on the route you choose, The White House is only eleven or twelve blocks away and The National Mall, with all its monu- ments and museums, is just beyond that. We counted several dozen restaurants and bars in the immediate few blocks around the hotel. There is so much to do and see in that city; be sure to come early and stay late! The hotel has a small, intimate feel and our group will dominate it and enjoy the wonderful lobby bar. Our meeting space will be close together and compact, as are the guest rooms. Pretty, and with all the modern con- nectivity you’d expect, the guest rooms are definitely smaller than some other hotels but, hey, who’s going to a NEFA Conference in Washington, DC to sit in their room? The rooms, by the way, have a NEFA negotiated room rate way less than most hotels in that area. We’ll sell it out early, though, so go ahead and register and get your room booked through the NEFA website; that saves you and saves NEFA. The history of this hotel is that it was originally built as a hospital –hence the wide hallways and doorways you may notice. It wasn’t just any hospital, though, but a hospital for people with mental issues. Truly, now, after what we’ve come through in recent years, don’t you think that’s the perfect spot for us?!?! If you’re not registered yet, visit the NEFA website for full details and get registered now. Picking hotels for our conferences is a tricky job because we’re signing contracts many, many months before we even know how big the meeting will be. NEFA meetings are growing dramatically, though, so that’s a good problem to have. We’ve got some future meetings already in the planning stages, too. Nothing’s written in stone yet, and I don’t want to ruin any surprises, but I will tell you that when I visited a potential site for next spring’s Summit, I took a hot air balloon ride! A hint for a possible future Symposium site is that I thought of the Willie Nelson song at the top of this message because, when I leave Cincinnati, I’ll be visiting hotels in a city not too far from there that’s known for country music and where my own traveling bus will be dwarfed and outclassed by the famous luxury buses that many of that city’s residents tour the country in. Got any ideas, yet? Now, let’s talk about how the ILP course came to be in Cincinnati. That came about because a Member like you wanted some employees trained and so they identified a host sponsor to provide a classroom facility for it. In Cincinnati our host will be Great American Insurance Group. A couple of months ago, it was Pawnee Leasing, in Fort Collins, Colorado. A couple of months from now it could be somewhere near you. If you want that kind of quality education (one person said it was ridiculously underpriced) just talk to one of your funding sources or other service partners about providing, or helping you arrange, a place for it.

Continued on page 23

4 newsLine | JULY/AUGUST 2012 truckload division of the Lanter Company. The company provides National Equipment Finance Association transportation services nationwide through its regional, long haul, Members on the move dedicated and shuttle services. , GreatAmerica $95 Million Recap Transaction National Equipment Finance Association INDUSTRY NEWS Pamlico Capital portfolio company, GreatAmerica Leasing, has completed a $95.0 million recapitalization transaction supporting Financial Pacific Leasing Enters Canadian a tender offer and the purchase of securities primarily from cer- Marketplace tain existing minority investors, including Pamlico Capital. The Financial Pacific Leasing announced its entrance into the Canadian transaction completes a successful eight-year partnership between marketplace. FinPac is now accepting applications for leases in GreatAmerica and Pamlico Capital that began in May 2004, when the following Canadian provinces: Ontario, British Columbia, Pamlico Capital invested in a recapitalization transaction as the Alberta, Manitoba, Saskatchewan, Nova Scotia, New Brunswick, company’s first . Since the original investment, Newfoundland and Labrador, and Prince Edward Island. FinPac the company has expanded its annual lease origination volume will bring to Canada all of the capabilities and benefits it has pro- by nearly 200% and earnings by nearly 400%, added several key vided in the U.S. for the past 37 years. Applications originated by members of its management team, broadened and refined its indus- FinPac’s U.S. sources for equipment to be delivered to Canada, and try group focus, and introduced a variety of customized service vice versa, also qualify. offerings to enhance the strong relationship the company maintains with its national dealer network. Alliance Partners Launches Equipment Finance Division TAB Bank Announces June Transactions Alliance Partners announced the expansion of its commercial TAB Bank provided $19.8 million in credit facilities for several lending business with the launch of Alliance Partners Equipment businesses during the month of June, including $7.8 million in Finance (APEF). The new division will be led by managing director equipment loans and leases. These facilities were provided for com- Jay Squiers and supported by directors Jim Lyons and Drew Hayes. panies across a broad spectrum of industries. The new transactions The new division will expand the commercial and industrial loan are categorized as the following: products that Alliance Partners sources, underwrites and services • Four A/R lines of credit totaling $12 million on behalf of BancAlliance. • Three equipment leases for $800,000 Alta Group Provides Market Research to • Eleven equipment loans totaling $7 million CI Capital Partners to Support TFS Acquisition The Alta Group said it provided market research and equipment finance industry insight to CI Capital Partners, a New York-based firm, to support CI Capital’s acquisition of Total Fleet Solutions (TFS) of Holland, OH. TFS is a provider of out- sourced business services focused on the procurement, maintenance and fleet management of forklifts and other materials handling equipment for large blue chip companies. Direct Capital Named #2 Family-Owned Business in NH by Business NH Magazine Direct Capital is the #2 Family-Owned Business in New Hampshire, according to Business NH Magazine. The nationwide provider of business financial services was honored in the business publica- tion’s June 2012 issue. The list includes 75 family-owned compa- nies across the state ranging in size up to 12,000 employees. The Business NH Magazine ranking was based on total volume of rev- enue and factors in the number of generations and family members working for the company. Five Point Capital Launches Business Referral Program Five Point Capital said it has introduced a new program to generate business referrals from vendors it has served in the past. Named the Vendor Advantage Program, vendors that sign up are provided access to sales and support tools from Five Point Capital to help find financing for customers that want help to purchase equipment. INDUSTRY TRANSACTIONS TAB Bank Provides $6 Million Credit Facility to LTI Trucking TAB Bank announced it has provided a $6 million credit facility to LTI Trucking Services, an independent truckload carrier and logis- tics company based in St. Louis, MO. LTI Trucking Services, for- merly known as Lanter Transport, was established in 1975 as the newsLine | JULY/AUGUST 2012 5 Allegiant Partners Expands $25 Five Point Capital Announces asset-based and factoring working capital Million Facility With BMO Harris Addition of 13 Team Members facilities to the broad range of commercial Allegiant Partners announced an expanded Five Point Capital said it has hired 13 entities in this the third largest metropolitan $25 million funding facility with BMO new team members within its leasing sales area in the United States. Harris Bank, a part of BMO Financial and small business loan sales divisions. Ascentium Capital Appoints 4 Group. “The last few of years have seen The company said the hiring growth was New Vendor Sales Associates strong volume and solid credit quality in the spurred by a rise in small business owners small ticket business,” commented Chris requesting loans for equipment leases and Ascentium Capital announced the appoint- Enbom, CEO of Allegiant Partners. working capital. ment of four business development profes- sionals to its vendor sales team: Josh Patton, Dynamic Funding Completes Northland Capital Hires 25- Stephen DiJohn, Tim Miller, and Tom Financing Deal With CEAVCO Year Industry Veteran as Sales, Bazis, bringing the total number of vendor Dynamic Funding, a Colorado-based Marketing SVP salespeople to 30 in less than nine months. equipment leasing company, announced Northland Capital Financial Services Richard Baccaro, executive vice president of that it has completed a fair market value (NCFS) said it appointed Chuck Sell as Sales and Marketing for Ascentium Capital, equipment lease with CEAVCO, an audio- senior vice president of sales and market- stated: “High quality sales professionals are visual company with offices in Denver and ing. Sell’s career spans over 25 years with starting to notice that Ascentium Capital’s Colorado Springs. The financing will allow TCF Equipment Finance and arrival into the small and mid-ticket vendor CEAVCO to lease additional computers Equipment Finance in various sales and finance arena is giving them an opportunity and software to support its current opera- sales management roles, including senior to grow their business.” vice president and national sales manager tions and growth. Great American Group Hires for TCF. Seeley, Equipment Appraisal PERSONNEL NEWS TAB Bank Expands to Chicago, Director Adds DeMonte to BD Team Great American Group said it has hired NEFA is pleased to announce Bryan Seeley as director of appraisal for the addition of two members: TAB Bank announced that it has expanded into Chicago and the entire upper Midwest the company’s Machinery & Equipment PacTrust Bank Equipment Finance repre- region with the addition of Tony DeMonte (M&E) Appraisal Division. In his new role, sented by David Normandin & Diversified to the business development team as vice Seeley will be responsible for managing Lenders, Inc. represented by Donna president and business development officer. Great American Group’s M&E appraisers Giovannetti. DeMonte will be responsible for sourcing and providing oversight and accountability new business opportunities by providing for quality control and client consultation. Seeley will also be a welcomed addition to Great American Group’s senior manage- ment team, assisting with long-range stra- tegic and organizational planning for the M&E Appraisal Division. Blue Chip Leasing, Enable Capital Hire Csabak Blue Chip Leasing and Enable Capital announced hiring industry veteran Richard Csabak as senior credit analyst for both companies. He has held senior credit posi- tions for leasing, banking and credit unions for over 30 years. Csabak worked for Roynat Lease Finance for the past three years and previously with National Leasing for 11 years, after many years in the bank- ing system. Marks & Weinberg Hires Equipment Finance Attorney Marks & Weinberg announced that Patricia Toro Reid, formerly managing director, Leasing and Equipment Finance of RBC Bank (USA) has joined the firm as an associate. Prior to graduating law school, Reid worked for 30 years in equip- ment finance, first at CIT, then as an offi- cer of SouthTrust Bank and later as senior vice president in charge of middle market finance for AmSouth Bank.

6 newsLine | JULY/AUGUST 2012 TECHNOLOGY & OPERATIONS

Be Careful What You Wish For A Discussion Of The Single System Model

The “new” concept of the full life cycle “single system” is getting more airplay as a way to transition from a slow-to-react, legacy-driven technology laggard to a better, faster, and cheaper technology-driven market leader. It is arguable that the full life cycle “single system” is new; it is also arguable a single system is indeed better, faster, and cheaper. Be careful what you wish for. By Mike Cumby

vid followers of the asset finance industry technology their accounting engine to be the driver behind many of the scene may have picked up some of the winds of change new functions to be added. We even had a customer or two, in both the marketing messages and product strategies who were already using our front end system, ready to test and Afrom industry software providers. There is a blurring deploy the new full life cycle single system. Sound like a winner? of the lines between what is considered “front-end” and “back- I thought so. end”. The “new” concept of the full life cycle “single system” is The next two years taught me some hard lessons and made getting more airplay as a way to transition from a slow-to-react, me question if what I and many others I talk to were “wish- legacy-driven technology laggard to a better, faster, and cheaper ing” for even made any sense from both a technical and business technology-driven market leader. perspective. There is little argument that the technology and software avail- To quote a brilliant guy with white bushy hair, time is relative. able to the asset finance industry is a quantum leap in technical Unfortunately, so is the need for change. Some processes need to and functional depth from that of yesteryear. be able to change or evolve quickly. Others—not so much. It is arguable that the full life cycle “single system” is new; it is For example, the origination processes that support your sales also arguable a single system is indeed better, faster, and cheaper. team may change, literally, from day to day as your market and Be careful what you wish for. channels evolve and react to economic changes and competitive forces. In a past life my partners and I bought into the concept of a full life cycle single system. Since all of my company’s resource and Speaking from experience, that need for change has required my effort was focused on the front end system we had been mar- company to make enhancements to our software regularly. We keting for many years, we licensed our source code to another typically release a major new version of our origination software vendor who intended to use our data model and code base to on a yearly basis. add all of the accounting, asset management and portfolio man- Accounting and portfolio management processes may need to agement functions to an already mature CRM, origination and change as well, but nowhere near as often. To quote a client: credit system. “Cash application has been done the same way since Caesar”. We hoped that the ability to leverage years of development This may be a bit of an exaggeration, but compared to origina- would make the project easier, quicker and less costly—our tions, accounting and portfolio management processes are static. own iteration of better, faster, cheaper. To hedge our bet, we Enhancements are changes the software company makes to their convinced a market leading pricing software firm to license us code base. This requires change to and management of the code

newsLine | JULY/AUGUST 2012 7 itself, testing of that code, and deployment So—back to my foray into the creation of my price. Here are the lessons I’ve learned in of updated code to their customer base. full life cycle “single system” in a past life. that experience and several others I’ve had My vendor licensees were given my complete since that point. Maybe they’re obvious. Typically larger customers have processes code base, and 2 years later they had finished They weren’t to me and I’ve been doing and procedures in place requiring they many of the augmentations that brought the this a long time. test changes internally prior to deploy- back end functions into the system. ment. Often it requires regression testing •The larger your code base, the more dif- (test what was there before) by both the During that time, we released two major ficult it is to manage and deploy especial- software company and the customer. This version of our software with significant ly if many sections of the code base are whole process and the resources required enhancements and provided them with shared between functions or objects. to make it succeed is the biggest reason numerous code drops of the changes. But Continued on page 23 it is common that customers choose to the management of our changes along with all of the new functions they were delay or forego upgrading their software. ABOUT THE AUTHOR Accepting and testing releases costs time adding as well to the same code base and money, and they do so only when it became a logistic nightmare and extended is believed that the changes will add value not only their timelines but their costs as Mike Cumby has over 20 years for their business. well. They had to postpone many of the of IT and senior management enhancements we had made to the code experience, developing and Testing overhead is also a driver for soft- architecting software solutions base in favor of their own changes. The ware companies managing their releases currently in everyday use customers who had originally signed on to and they only do so when there is a mate- throughout the Financial test and deploy the final solution and who rial pooling of accumulated enhancements Services industry. He founded had been receiving our front end upgrades BrokerWare, Inc, in 1993, developing the successful that will add value for their customer base. the entire time were hesitant to deploy a “BrokerTrac” and “Isis” software systems for the Herein lies the conflict between a full life full life cycle single system that did not leasing brokers industry. In 2001, BrokerWare was cycle “single system” and realization of have several of the enhancements they acquired by Cyence International, Inc. and he became better, faster, cheaper. Faster and cheap- were already using in the front end system Chief Architect of “ExpressOS” and “ExpressCS” as well as General Manager of US Operations. Mr. er is likely not the case for the reasons they had in production. Coupled with the Cumby formed FinanceEdge Software, LLC, in 2006. explained above; if faster and cheaper are economic changes that were just begin- Following the acquisition of FinanceEdge in 2008 by harder to attain, better is a tough argu- ning at that time and the cost overruns the Constellation Software, Inc., Mike became the Chief ment to win. entire project crashed and burned. Architect for Constellation Financing Systems. Mike can be reached at [email protected]. Be careful what you wish for. Sometimes wisdom comes with a heavy

8 newsLine | JULY/AUGUST 2012 The Changing Face of Portfolio Management

The nuances of servicing a he leasing niche market, with all its specialized tools and operations, portfolio are myriad, and taking has spawned a growing side industry in portfolio servicing and contract management. This focused business offering is finding takers who want the time to learn all the ins and Tto change the old way of “racking and stacking” their servicing opera- outs could take valuable time away tions. The beneficiaries have been banks, captives, manufacturers, and indepen- from “business-getting” activities dent leasing companies, all of whom may either possess an in-house portfolio or and deviate from a primary wish to start one. mission. Businesses initiate change The nuances of servicing a portfolio are myriad, and taking the time to learn all in their servicing by first assessing the ins and outs could take valuable time away from “business-getting” activities and deviate from a primary mission. Businesses initiate change in their servicing whether their current servicing by first assessing whether their current servicing arrangements are the right solu- arrangements are the right solution. tion. This analysis can help a business decide to either maintain the status quo or consider an outsourcing option for all or part of the servicing for the portfolio. By Joe Andries Outsourced services can include invoicing, tax compliance, asset management or even the entire front-end and back-end servicing process. The customer experience

newsLine | JULY/AUGUST 2012 9 and financial performance impacted by • The need for scalability (small or large) technology without a significant finan- cial investment servicing are reasons alone to place a pri- • The ability to implement a servicing ority on determining whether outsourcing solution quickly and efficiently • The need for scalability (small or large) is the right solution. Lessors with an existing servicing plat- As lessors evaluate whether to outsource Lessors transitioning to holding their own form should consider these points when servicing or build an internal platform, paper (and currently without a servicing evaluating outsourcing: they should consider the advantages of platform) should consider these points outsourcing. One industry executive when evaluating outsourcing: • The need to get a handle on rising costs said outsourcing immediately provided his company with an established ser- • The ability to access the latest tech- • A desired improvement over current system capabilities or efficiencies vicing platform. With a servicing solu- nology without a significant financial tion secured, he gained the confidence investment • Any dissatisfaction with current ser- to pour more resources into growing his • The need for specialized skills and knowl- vice offering levels business. Outsourcing provides multiple edge, whether in the short or long term • The ability to access the latest advantages: Cost Savings and Efficiency: Outsourcing allows lessors the benefit of incurring cost incrementally as the portfolio grows. Building a servicing platform is similar to building a manufacturing facility; sim- ply put, the platform is built and paid for prior to using it. The build-in-anticipa- tion-of-volume instantly creates costs and inefficiencies. The outsourcing advantage provides a pay-as-you-need model with efficiencies already clearly established and implemented. Focus on Core Strengths: Assembling a back office infrastructure can be time consuming and require devotion of key management resources. Outsourcing operations alleviates the challenges and resource consumption and can build val- ue. An already assembled, turn-key servic- ing platform allows continued focus on core business growing activity. Risk Management: Assembling a back office is often centered on system capa- bilities and resource demand. Establishing standard operating procedures and poli- cies to mitigate risks associated with ser- vicing a portfolio can be an afterthought. Established outsourcing companies have already taken risk management require- ments into consideration. In essence, when a lessor hires an outsourcing part- ner, it’s hiring with the expectation that the outsourcer is an expert in the field and has already established risk mitigation measures. Staffing: Outsourcing takes over the often daunting task of hiring, training, and retaining the right employees for the function. Lessors immediately gain trained and experienced employees assigned to its portfolio. When the portfolio grows, the allocated resources grow incrementally. In the outsourcing environment, there actu- ally is such a thing as a “half employee”. Reduced Overhead: Similar to staffing, the outsourcing company assumes the responsi- bility and risk for managing overhead. The outsourcing partner supports office space,

10 newsLine | JULY/AUGUST 2012 computer systems and even the parking. Serving customers is ultimately what The comfort factor is realized through the When a lessor chooses outsourcing, adding makes a lessor money. It can also drive the outsourcing partner by knowing the sys- or upgrading a server to support growth, lessor’s reputation and brand in the mar- tems are reliable and capable of support- keeping pace with new technology or add- ket. Partner with a strong and reputable ing unique business models. The servicing ing office space are expenses incurred by the outsourcing company and enjoy the best of people are trained and retained to foster a outsourcing partner. both worlds. The lessor leads the sales mis- specified level of service, and certain risks Service Level Control: The outsourcing sion and the outsourcing partner manages are mitigated through proven policies and partner will adhere to the marching orders the servicing. Outsourcing is transferring procedures. These points coupled with spelled out at the commencement of the ownership of an operational or manage- managing expenses and growing the busi- relationship. Standard operating proce- ment process without giving up the con- ness at a steeper rate than anticipated, may dures, customer service practices, and trol of the portfolio. The controlling factor point to outsourcing all or part of the ser- other activities that are consistent with the is realized by specific standard operating vicing process as making sense for many lessor’s business model are spelled out in procedures tailored to a desired customer lessors. • the beginning. experience level and continual access to the portfolio’s activity and performance. Enables Innovation: Meeting a custom- er’s unique request can be an unperceived benefit of outsourcing. An outsourcing partnership has the potential to enable or support the client’s need or ability to be innovative. Innovation in outsourcing goes beyond the policies and procedures of the offering; it emerges from a mature out- sourcing relationship that forms the basis for applying new ideas to tackle emerging business challenges and opportunities. An outsourcing partner is a complementary extension of a lessor’s market presence, product offering and sales team. Ability to be Nimble: Today’s lessors need to be alert to fast changing mar- ket conditions and respond as quickly as possible. Outsourcing is a proven busi- ness strategy that transforms business processes and makes lessors more agile, enabling them to stay ahead of competi- tion. Alternatively, when the crisis hit in 2008, outsourcing allowed for a quick transformation in the way a lessor needed to collect on their accounts: quick reaction to cyclical changes can be impactful to the bottom line.

ABOUT THE AUTHOR

Joe Andries, Vice President and General Manager of GreatAmerica Portfolio Services Group LLC, (www.greatamerica. com) is responsible for the sales, marketing, operational oversight and strategic planning. The GreatAmerica Portfolio Services Group LLC is a subsidiary of GreatAmerica Financial Services, founded in Cedar Rapids, Iowa in 1992. They are an outsource provider that services portfolios/ contracts at reduced costs and with fewer operational barriers so their customers can concentrate on core strengths. Their teams deliver solutions to banks, manufacturers, captives, independent dealers and finance companies. Their financial strength, industry knowledge, and reputation provide customers a high level of confidence regarding the care and servicing of their assets. Joe can be reached at 877-762-3808 or [email protected].

newsLine | JULY/AUGUST 2012 11 BROKER line Setting the Goal, Keeping the Focus, Making it Fun

By Gabe JARNOT

Each fiscal year starts off with an employee meeting (with some of the management group swallowing their pride and dressing the part) revealing the new theme and focusing on four strategic growth & performance goals: volume, profitability, delinquency and charge-offs. Each month employees are encouraged to obtain personal as well as company goals. Company goals are tracked visually in the lunchroom with themed elements. Rewards are given for obtained goals, usually in the form of gift cards or a company lunch. “I look forward to a new theme being intro- duced every year. It gets us motivated for the coming year to reach our goals and makes it a fun environment to work in.” Kari Schaefer—Account Representative Making it Fun Setting the Goal No matter what business service you receive, it is easy to deter- We all know the benefits of setting a goal, whether it’s to eat mine whether that person serving you enjoys their job, the people healthier, exercise more, or spend less. We also know the chal- they work with, or their work environment and it really does lenge of sticking to that goal and keeping the focus over the long make a difference to your overall experience. At Northland haul. Capital, we view that as an organization we can have a com- The same, of course, is true in our businesses. We begin each year petitive advantage and differentiate ourselves from some of the with renewed enthusiasm and conviction to do better than the larger more impersonal organizations. Every customer contact is previous year. We set goals, develop strategies, commit them in an opportunity to show them how “you’re worth more.” writing and begin the work. Now, how do you and your employ- NCFS tries to infuse the same fun-filled spirit as Pike’s Place Fish ees keep the focus and enthusiasm over the challenges throughout Market—except with annual themes instead of fish. For instance, the year? NCFS’s milestone anniversary occurred during our Northlander’s At Northland Capital Financial Services, LLC (NCFS), we know Deadliest Catch theme. We celebrated with a surprise king crab that reaching our goals is not just a sales function, but it requires lunch for the employees. It was a great motivator and fantastic every employee in our organization to understand what our com- feast. pany vision, mission and goals are. It also takes teamwork, enthu- Starting at our inception with the 30-30 and Fish for More siasm and attitude to keep employees focused. As difficult as it themes, 10 years have brought forth a variety of themes including is for us as individuals to stay focused and committed, it is even a trail drive, Route 66 and 70’s rock ‘n roll. “One never knows more challenging as a 30+ employee organization. if they’ll be transformed into a rock star, ride stick horses down a trail or find crab crates hanging from the ceiling. It’s fun and Keeping the Focus makes reaching for our goals even more fun!” Holly Fuchs— Account Service Representative In a little fish market author and filmmaker, John Christensen, observed a work atmosphere of flinging fish to each other, incit- Over the years, if you were to have come to a Northland weekly ing laughter, complimenting catching abilities and giving com- staff meeting, you may have heard the meeting start with the plete attention to customers ensuring they had an enjoyable visit. Deadliest Catch theme song, “Wanted Dead or Alive” by Bon The employees truly seemed to enjoy their work and they also Jovi blaring across the speakers or this year, you may hear the sold a lot of fish. John says, “I wanted to inspire people to live meeting start with the NFL theme music for the Northland and work wholeheartedly, with purpose, while having fun.” The Buck$. It helps get the juices going, gets the meeting kicked off FISH philosophy was developed for encouraging teamwork and on a positive note and sets the stage to discuss the current score. enthusiasm within the workplace by four simple practices of: be there, play, make their day and choose your attitude. ABOUT THE AUTHOR Inspired by Seattle’s Pike Place Fish Market, NCFS caters our own FISH philosophy emphasizing our company core values of Gabe Jarnot has been in the equipment leasing and finance industry for over integrity, focus, hard work, fun at work, long-term relationships, 20 years and joined Northland Capital at its inception in 1996. His role at profitability, and teamwork. These values are essentials to deliv- NCFS has been in Business Development and Sales Management. Beginning ering Northland’s customer experience of “you’re worth more.” as a two-person broker operation, today Northland has over 30 employees These core values and annual goals are reinforced by a theme that and is a full-service Lessor funded with bank lines. Jarnot can be reached at [email protected]. More information about NCFS is available at transforms our office and break room. The visual reminders keep www.northlandcapital.com. our values and goals at the forefront of our minds.

12 newsLine | JULY/AUGUST 2012 2009—Due North: In 2009 when the jerseys and props are used to transform alleviate expenses, but you’d be surprised economy and our industry was near its the lunchroom into a locker room - com- at what you can find networking with lowest, NCFS’s theme originated from plete with a seven-foot football field and local businesses or what fashionable attire the Discovery series “Man vs Wild” scoreboard to track goals and progress. and props can be acquired at second-hand where the survival specialist, Bear Grylls, and discount stores. “We need each employee to understand free-falls from a plane and gets dropped the importance of their role. It takes a Our creative team does an incredible off into a remote environment to use his good game plan, offense, defense and spe- job of brainstorming and implementing skills, resourcefulness, and improvisation cial teams, and execution to compete and themes to make our work environment to survive. win in a competitive division. The person a positive and fun place to be. “It takes I’m sure we remember the time all too well answering the phone has just an impor- time and dedication to make it all work. when many in the industry felt they had tant role in making big plays as the sales But even the smallest motivators make just experienced a free fall into an extreme person, credit analyst, or customer service a positive difference. The end results are and unfamiliar economic environment. representative—they are all part of the well worth it and fun.” Sadie Traulich— Marketing Coordinator. We, as an industry, had to figure out how running team heading for the same goal.” best to work our way out. For NCFS, it Willis Kleinjan—President The themes are not what have made was to set our compass coordinates and Northland successful, but the committed To keep themes active throughout the head “Due North.” We found that much employees that come to work and put in year and stay focused, we utilize props of the advice Bear Grylls gave on how to their best effort each and every day. The in a variety of fundraising, teambuild- get out of a wilderness situation applied to themes help to communicate the mes- ing and company events. For instance, a our business, such as: sage of where we want to go, but it is holiday party may include team names for • First, you must acclimatize and assess the employees that make it happen. I am table settings, competitions like bounc- your situation. happy to say our recent themes are more ing balls into a cup glued to the top of growth focused than survival focused. • Take a long hard look around and a helmet that are based on the television Needless to say, our business environment come to grips to whatever environ- show “Minute to Win It” for fundrais- every year is not without its challenges ment you are in. ers, office Olympics or themed potluck and adversity and the key is setting goals, Throughout the year, we were able to use lunches. As a daily reminder, a “summary staying focused, and remembering to have that theme to keep checking our compass scorebook” is emailed with the stats of the fun. • coordinates relating to volume, profit- current week’s progress including inspira- ability, delinquency, and charge-off’s to tional quotes. NCFS has the capabilities determine if we were still heading North. of implementing many props in-house to We were also able to use Gryll’s advice throughout the year to stay focused and motivated with reminders like: • Every environment presents its own set of dangers. • Whatever environment you find yourself in, it’s a case of hanging in and persevering no matter how tough it gets. • In order to survive in the wild you need energy and that means food. You can’t be squeamish and must be pre- pared to leave your prejudices behind. • I almost think half the battle of sur- vival is to keep your hopes up and your spirit alive. • Survival is about adapting and work- ing around a problem. I’m going fish- ing with my trousers. • I think many would agree as you have had to adapt in recent years to survive, often times you felt like you were trying to fish with your trousers. 2012—Northland Buck$: In regard to our current theme centered on the Northland Buck$ football team, visuals are an integral part of keeping the theme alive and thriving throughout the year. Posters align the hallways with quotes from Vince Lombardi. Lockers, helmets,

newsLine | JULY/AUGUST 2012 13 TECHNOLOGY & OPERATIONS

14 newsLine | JULY/AUGUST 2012 A Foot in Two Worlds… What I did not anticipate—but have found to be enormously helpful in the representation of our firm’s leasing clients—is how much taking the plunge into the business of leasing has broadened my perspective as a leasing attorney. By James E. Coston

s an attorney, I’ve enjoyed the of commuter rail coaches for a public rail In leasing, there are factors such as com- privilege of representing cli- agency was the first of its kind. petition, risk, availability of resources and the market—all of which require experi- ents in the equipment leasing What I did not anticipate—but have found ence and practical thinking, and demand industry for some 30 years to be enormously helpful in the represen- A a special set of tools—together with an now. In some ways, it seems like yester- tation of our firm’s leasing clients—is how aggressive mindset and a willingness to day when I started; in other ways, it seems much taking the plunge into the business of reach beyond the traditional—in order to like I’ve been doing this all of my life. It leasing has broadened my perspective as a achieve sustained success. started with enforcement actions to col- leasing attorney. Not only has it improved lect defaulted lease accounts, moved on to and expanded my skillset—it has allowed When I became a lessor, I also became a drafting lease documentation, advanced me to take a step back, as a lessor and as a client of multiple professional entities— to the acquisition of lease portfolios and client—to better counsel our firm’s clients accounting firms, lobbying firms, consult- then leasing companies, progressed to on the effective use of outside counsel. It ing firms, marketing firms, design and negotiating and documenting ‘big ticket’ helps me in the way I talk to our clients, engineering firms - and law firms. There transactions, all of which led to becom- how I represent them in individual mat- have been periods when my company’s ing a Certified Leasing Professional (CLP), ters, how I counsel them generally in areas legal bills have far exceeded my own bill- president of a national leasing associa- in which they have concern, how I advise ings for work performed for our firm’s tion (UAEL), lecturing on leasing law at them to structure and use their documen- clients (see: “an attorney is his own worst conferences (WAEL/UAEL, AAEL/ELA/ tation, how they develop and implement client…”). And the experience gained ELFA, EAEL, AGL&F, etc.) and teaching best business practices and—most impor- from managing outside counsel has been classes on leasing. Our firm continues to tant—assist them in improving their ‘bot- an education for this leasing attorney. do all of it, and the work is as rewarding tom line.’ today as it was in 1982. What have I learned that I’m able to share There are similarities in running a law with our firm’s clients? Plenty: The business of equipment leasing has firm and operating a business focused on • Create the right attorney-client relation- always fascinated me as much as the law the financing of assets using lease prod- governing it. This interest—and my desire ship before the work starts: Often we hire ucts. Both require a sound business plan, counsel to “put out a fire,” and we feel that to always try and become a better and the hiring and training of a high-quality more effective attorney for our clients— there’s no time to choose the best law firm staff of professionals and support person- for the task, establish what work is to be led me to study and learn from our clients, nel, continuous efforts at and oversight of and soak up as much of the dynamics and done, how it is to be performed, how com- marketing and quality control, develop- munications will take place and what it the day-to-day work of equipment finance ment of and adherence to a budget, insur- as I could observe and process. will cost. Even if there is pressure to engage ing adequate cash flow through proper counsel immediately, take the time to sort So, when the opportunity presented itself billing and collecting practices and real- through the options, and make informed, to start an equipment finance and devel- izing an appropriate return on investment. intelligent decisions so that you and your opment company for intercity and com- But the difference—and it is a big one - counsel can create the best relationship and muter passenger rail carriers, I felt as involves an attribute of leasing that is its environment to achieve success. though my years of representing lessors real hallmark—entrepreneurship. The • Define the task(s), determine achievable would be a valuable attribute to bring to a practice of law is a traditional business. leasing start-up. It was. My general under- goals, develop a budget, and be willing The business of equipment leasing is an to constantly revisit and re-calibrate the standing of how leasing works provided untraditional enterprise. Practicing law me with a solid platform to conceptualize needs and the resources necessary to meet involves taking established principles and them. As both an attorney and a client, I’ve and structure leasing solutions for entities statutes and documents and leveraging seeking to acquire the use of rail assets. seen what looked at the onset to be three- them in the best ways possible to get the to-six month engagements become never- My background in public finance helped best result for your client and do it in the me formulate a proposal for our first cli- ending three-to-six year sagas. Often, this most efficient and economical way pos- is unavoidable. But what can be avoided ent. And my contacts in the industry—in sible. You get to bring brains and inge- this case, another attorney with whom I’d is allowing a matter to get out-of-hand, nuity to deal with the issues presented to through use of adequate controls, timely worked for years who’d made the jump you, but for the most part you have to to the ‘business side’—led me to the right decision-making and appropriate alloca- ‘stay within the lines’ of what’s there, and tion of resources, financial and otherwise. funding source as a partner, which result- what’s been done before, in order to find ed in our winning our first deal. Our $26 the solution most advantageous for your million municipal lease for the acquisition client. Continued on page 19

newsLine | JULY/AUGUST 2012 15 legal line

16 newsLine | JULY/AUGUST 2012 Electing to Get Paid in a Chapter 11 Bankruptcy

Under chapter 11 of the bankruptcy code, a creditor may elect to have its secured claim paid in full. The 1111(b) election can be a powerful tool. However, before making the election, you must consider all of the consequences. By Geoffrey J. Peters

ecured creditors in a chapter 11 court must decide the fair market of the the proposed plan do not pay off the full case have an advantage over other collateral. The proposed interest rate may $200,000. If a creditor elected pursuant chapters of the bankruptcy code. also be an issue. to 1111(b), the debtor would need to SIn a chapter 11 case, the secured Under chapter 11 of the bankruptcy code, increase its payments in order to ensure creditor can choose to have its secured a creditor may elect to have its secured the creditor received the full amount of claim paid in full. In a typical chapter 11 claim paid in full. Pursuant to section its claim. When the election is made, the bankruptcy, a debtor will propose to pay 1111(b) of the bankruptcy code “a claim creditor’s lien is maintained on the col- a secured creditor the value of its secured secured by a lien on property of the estate lateral regardless of the fair market value claim. Section 506 of the bankruptcy code shall be allowed or disallowed…the same of the collateral. provides that: as if the holder of such claim had recourse There are several reasons to making the “an allowed claim of a creditor secured by against the debtor on account of such 1111(b) election. First, the election may a lien on property which the estate has an claim, whether or not such holder had be used as a means to avoid a costly evi- interest…is a secured claim to the extent recourse….” dentiary hearing on value. If a creditor of the value of such creditor’s interests in Pursuant to this bankruptcy code section, does not agree with the debtor’s proposed the estate’s interest in such property…is a secured creditor can waive its unse- value in its chapter 11 plan but it is not an unsecured claim to the extent that the cured claim and elect to have its total excessively low, the election can be used value of such creditor’s interest…is less claim treated as secured. In our example, to avoid potential litigation. than the amount of such allowed claim.” a creditor could waive its treatment of Second, the 1111(b) election can prevent For example, if a creditor has a secured lien the $75,000 claim in the unsecured class a quick sale of property if the creditor of the chapter 11 plan and request that on collateral in the amount of $200,000 believes the collateral will appreciate. and the value of that collateral at the time the debtor provide for the full $200,000 For example, beginning in 2008 the real of the bankruptcy is $125,000, the debtor claim in the secured class. If this election estate market collapsed and fair market may propose a plan that provides for the is made, this does not necessarily mean values decreased significantly. If a debtor creditor’s secured claim of $125,000 and that the full $200,000 claim is paid with filed a chapter 11 plan, a creditor may an unsecured claim of $75,000. In this sit- interest. The bankruptcy code provides believe that the value of its collateral was uation, the debtor would propose a plan that the plan must provide for payment very low at the time of filing but may in which the creditor would be in two sep- of deferred cash payments totaling at least have expected the market to appreciate arate classes with two different treatments the “allowed amount of such claim, hav- in coming years. In such a situation, the of its debt. Its claim is bifurcated into a ing a present value as of the effective date secured portion and unsecured portion. of the plan at least the collateral value.” fair market value of the collateral at the time of filing was very low and the debtor The secured portion is paid with interest In our example, assume that the collat- over a certain time period. Typically, the may propose a plan that reflected the cur- eral has a useful life of 48 months and the rent value in a depressed market. In such unsecured portion is paid a certain per- current interest rate is 6%. Amortizing centage at 0% interest. a situation, the creditor would make the $125,000 at 6% over 48 months would 1111(b) election so that the debtor could In this situation, a creditor will be able to result in a payment of $2,935.63 per not take advantage of the appreciation in vote on the plan. The creditor would have month. Pursuant to this amortization the coming years at the creditor’s expense. a vote in both its secured class and unse- schedule, the total payments over the cured class. The valuation of the collateral four years would equal $140,910.24. In A third reason a creditor may make the could also become an issue in which the this case, the debtor’s payments under 1111(b) election is if the unsecured credi- tors class in the chapter 11 plan would be

newsLine | JULY/AUGUST 2012 17 getting paid an insignificant amount. The bankruptcy code provides that there a plan affecting the creditor, the election are two situations in which the creditor may be withdrawn. In a case where the A fourth reason is that a creditor may may not elect the 1111(b) election. The election was made and later withdrawn obtain more favorable treatment in the first situation is when the holder of the resulting in prejudice to the debtor, such chapter 11 plan. If the creditor makes the claim in such property is of inconsequen- as when a debtor relied on the election 1111(b) election it may impact the feasi- tial value. Many courts have held that and incurred significant expense, then the bility of the debtor’s plan. A debtor may inconsequential value is to be measured court may not allow the withdrawal. need to pay much more to the creditor in proportion to the amount of the debt. because of the election, which may make The 1111(b) election can be a power- For example, if a debt was $100,000 and the plan not feasible. The 1111(b) election ful tool. However, before making the the fair market value of the collateral was can be used as a negotiating tool in order 1111(b) election, you must consider all of $1,000, a court would mostly likely find for the creditor to obtain better treatment the consequences. • that the collateral value was inconsequen- while still allowing the plan to be feasible. tial and the election could not be made. There also may be a strategic reason not to Second, the bankruptcy code also pro- make the 1111(b) election. As stated ear- vides that that a creditor may not elect the ABOUT THE AUTHOR lier, when the creditor makes the 1111(b) 1111(b) election if the collateral is to be election it waives its unsecured claim and sold during the bankruptcy or as part of Geoffrey Peters is a Partner can no longer vote in that unsecured class. the chapter 11 plan. In a chapter 11 bankruptcy, the creditors in the Columbus office and The bankruptcy rules do provide a strict practices in Bankruptcy, with in each of the impaired classes vote on timeline in which to make the 1111(b) a focus on the Consumer and whether to approve the plan or reject the election. Bankruptcy Rule 3014 provides Commercial Bankruptcy Groups. plan. The bankruptcy code provides that that a creditor may make the 1111(b) elec- Geoffrey specializes in complex “at least 2/3 in the amount and more than tion at any time prior to the conclusion of bankruptcy matters, often ½ in number of the allowed claims of such involving business-related bankruptcies. He earned a the hearing on the disclosure statement or class held by creditors” must have accept- B.B.A. summa cum laude from Kent State University within such later time as the court may fix. ed or rejected such a plan. Therefore, if in 1991, a J.D. from Case Western Reserve University The election must be made in writing and a creditor with an unsecured claim has a School of Law in 1994 and an LL.M. in Bankruptcy signed unless it is made at the hearing on large enough claim to control the class, a from St. John’s University School of Law in 2007. the disclosure statement. creditor may want to keep its unsecured Geoffrey is a member of the American Bankruptcy Institute, Beta Gamma Sigma and the Equipment vote if it feels strongly to vote in favor of Once the election is made, a creditor may Leasing and Finance Association. He was selected for or feels strongly to reject debtor’s pro- or may not withdraw such election. In inclusion in the 2006 Ohio Rising Stars list. Geoffrey posed plan. most cases, if a debtor materially modifies can be reached at [email protected]

18 newsLine | JULY/AUGUST 2012 A Foot in Two Worlds Continued from page 19 company outsource a function currently life—never goes away. I have been very being performed by your staff, listen fortunate as an attorney to be schooled by Everyone’s experienced having ‘a tiger by and make an objective determination on some of the best and the brightest in this the tail.’ Those who have lived to tell their a cost-benefit basis. You’d be surprised industry. The opportunity to learn even story and fight another day will consis- about how determining the real cost of more by actually running an equipment tently tell you that the willingness to stop handling something internally can reveal leasing company has multiplied those ben- and examine every stage of a situation how expensive and inefficient it really is, efits. I do my best to pass along what I’ve with their counsel, and use collaboration and how often professionals can get the learned when I represent our firm’s clients. and wisdom to determine a predictable job done better, faster and cheaper (and And it helps me to better serve them. • path and achievable results using reason- let you sleep better at night). able resources, will carry the day. • If your attorney says something you • Establish regular times to meet with don’t understand, or suggests a course your counsel when your hair isn’t on fire. of action that doesn’t make sense to you, It’s worth having lunch with your coun- challenge it until you’re satisfied. I’m not ABOUT THE AUTHOR sel, or just paying for an hour of their suggesting that you go around and ‘shop’ time. Some of the things I most regret as a everything your attorney tells you to get Jim Coston is a member business person (and a client) could have the answer you want. But I am saying that of Coston & Coston LLC, a easily been avoided had I afforded myself very often as attorneys we assume that Chicago-based law firm that the ‘luxury’ of brainstorming with my you understand what we’re talking about, represents equipment lessors, attorney(s). Allowing you and your busi- and there’s no shame in having your brokers, funding sources and ness to be pro-active, (instead of constant- counsel take you through it again (and investors in equipment finance ly being at-risk and reactive), can open again) until you are comfortable. And if matters. In 2000, President Clinton appointed Jim to a seat on the Amtrak doors for your business (and create high something really doesn’t sound right, ask Reform Council. In 2004, Jim founded Corridor self-esteem moments). another lessor if they’ve dealt with the Capital LLC, now an industry leader in passenger • When your attorney suggests something, issue before. Don’t be afraid to have an train development and finance. Jim is a graduate don’t immediately assume that he’s just inquiring mind—knowledge is power. of Northwestern University and DePaul University trying to put his/her hand in your pocket. In my three decades of working with les- College of Law, is a Certified Leasing Professional Attorneys and law firms have the ben- sors, brokers, funding sources and other (CLP), and in 2003 became the first attorney to be elected president of a national equipment finance efit of having gone through all kinds of leasing professionals, I am continually trade association, United Association of Equipment issues with their clients. You can benefit amazed to learn how much I don’t know. Leasing (UAEL), which is now NEFA. To contact Jim from what they’ve observed and learned. The need to constantly educate yourself - e-mail [email protected]. If your attorney recommends that your in business, and in every other aspect of

newsLine | JULY/AUGUST 2012 19 National Equipment Finance Association tidbits

National Equipment Finance Association

Looking Forward to The NEFA Funding Symposium in D.C. Washington, D.C., September 13-15

In case you haven’t heard, there’s an important election this year Full of both history and promise, Washington offers lots to do. in Washington, DC. No, not just THAT one …there’s also the The NEFA Funding Symposium will be right in the heart of it all, one at the NEFA Annual Business Meeting at the 2012 Funding too. Within blocks of our conference hotel, are some of the best Symposium, September 13-15, at the Renaissance Washington, restaurants and liveliest nightspots in the city as well as some of DC Dupont Circle Hotel! Committed American citizens don’t the city’s world-class theatres, and always popular Georgetown. want to miss the US Presidential and Congressional elections in The National Mall, with all its monuments and museums as well November, but dedicated finance professionals will also want to as the White House and Lincoln Memorial are all within walking participate in NEFA’s elections. distance. If you prefer, the simple and convenient Washington Our industry continues to pick up steam and NEFA continues Metro subway system can be accessed by either of two stations, to attract more and more participants at all our meetings. Your also within just blocks of the hotel. participation, as a NEFA Member, at our annual business meet- In spite of the big-city locale, the conference hotel is a perfect fit ing gives you a voice in shaping the future of NEFA. for NEFA. It’s a small, kind of funky hotel with a great lobby- This year’s Funding Symposium is already setting up to be a great bar gathering-spot and its own interesting history. In true NEFA event. At ten weeks out, we have more exhibitors signed up than fashion, we’ve negotiated a great room rate there for our attend- last year, with even more inquiries still coming in, and attendee ees that will make the conference a practical investment for busi- numbers are way, way, way ahead of this point last year. ness and fun. We will sell out the discounted hotel room block Business aside, Washington DC is a beautiful city and you’ll find early though, so don’t wait to register. We’ll see you in DC! • that September is a beautiful time of year there.

2012 NEFA Funding Symposium Sponsors To Date: Allegiant Partners Incorporated • Bank of the West • ECS Financial Services, Inc. • Financial Pacific Leasing, LLC Great American Insurance • LeaseTeam, Inc. • Pawnee Leasing Corporation • RLC Funding a Division of Navitas Lease Corp. 2012 NEFA Funding Symposium Exhibitors To Date: Allegiant Partners Incorporated• Bank of the West • BMT Leasing Inc. DBA Bryn Mawr Funding Boston Financial & Equity Corporation • Capital Access Network, Inc. • Channel Partners LLC • CLP Foundation Dakota Financial, LLC • Diversified Lenders, Inc • ECS Financial Services, Inc. EquipmentEngine Financial Services Company, LLC • Financial Pacific Leasing, LLC • Great American Insurance GreatAmerica Portfolio Services Group, LLC • LeaseTeam, Inc. • Maxim Commercial Capital, LLC • Monitor Daily NEFA Newsline • On Deck Capital • PacTrust Bank Equipment Finance • Pawnee Leasing Corporation • Quiktrak, Inc. RLC Funding a Division of Navitas Lease Corp • RTR Services, Inc. • TAB Bank • Varilease Financial, Inc.

ADVERTISER INDEX

Allegiant Partners...... 13 Great American Insurance Group...... 8 LFC Capital...... 6 Boston Financial & Equity...... 5 Lease Team...... Back Page NEFA...... 18 & 19 ECS Financial Services...... 11 Leasing Solutions...... 21 TAB Bank...... 10

20 newsLine | JULY/AUGUST 2012 Volunteer of the Month gary souverein Pawnee Leasing Corporation

Gary Souverein has been in the leasing industry for 19 years, all of those with Pawnee Leasing Corporation. He has served in many roles at Pawnee includ- ing operations, credit and marketing and was named its President and COO in 2005. Gary was integral to Pawnee’s initial public offering and subsequent sale in 2006 to its Canadian parent, Chesswood Group Limited, listed on the Toronto Stock Exchange (TSX:CHW). Today, Pawnee represents approxi- mately 84% of Chesswood’s assets. Pawnee’s membership in UAEL and EAEL began in 1994 and Gary has been an active contributor to many of the panels at association conferences over many of these years. Gary has served on numerous committees contributing many efforts in support of the associations over the years. More recently, Gary has served as a member of the NEFA Board of Directors. Gary can be found outside Pawnee on the baseball field seven days per week with his family including three boys ages 14, 12 and 7. He enjoys skiing, running, cycling, trav- eling and photography.

CALENDAR OF EVENTS Atlanta Networking Luncheon Ansley Golf Club July 11 Tacoma Rainiers Baseball Game Cheney Stadium August 6 Annual Chicago White Sox Baseball Game US Cellular Field August 6

Annual Anaheim Angels Baseball Game Angel Stadium August 16 2012 NEFA Funding Symposium Renaissance Washington, DC Dupont Circle hotel September 13-15 2012 NJ Expo Super Regional Teaneck Marriott at Glenpoint November 4-5

newsLine | JULY/AUGUST 2012 21 Member line Daryn Lecy Stearns Bank The People Effect

It wasn’t until twenty some years after Kindergarten that I real- ized why I wasn’t meant to be the class drafter or all-star athlete (still lobbying for that one as a secondary label), and the class banker made much more sense -- it was the people. I realized that my parents and siblings, and the people I hung out with during my childhood through my college years really molded me into the person I am today, and that working in the field of banking pro- vides me great opportunities to work with and help people and develop many lasting relationships. Life down another career path may have been good, but I probably would not have the same “people interactions” I have had and continue to thrive on. Although, just a label in Kindergarten, the class banker had an effect on the path I went down. I received many enjoyable emails during college, of all flavors, but one, in particular, has stuck with me throughout the years. This particular email spoke of a college professor who gave a pop quiz and stumped the students with the last question: “What is the first name of the woman who cleans the school?” Students thought surely that this was a joke. They had seen her several times, knew she was tall and in her 50s, but how would they know her name? At the end of the class that day, a student asked if the last question would count toward their quiz grade. “Absolutely,” said the professor. “In your careers, you will meet many people. All are significant. They deserve your attention and care, even if all you do is smile and say hello.” The stu- dents never forgot that lesson. I, too, never forgot that lesson and believe it to be a valuable one for all aspects of one’s life. I earned my MBA at St. Cloud State University in May 2005. Throughout my training program, I learned a great deal about leadership and how to effectively support employees. Together with the General Manager of our division, Diane Notch, we have implemented several programs that effectively retain and moti- t my Kindergarten graduation, my teacher anointed vate our employees, keeping us at the top of our game, while each of the students in my class with a name or title. enhancing our working environment. I was given the name “class banker.” I was six at the time -- how could my teacher know that my love for The people I get to work for and with everyday are the reasons A my job is a joy to go to everyday. I know I am not the only counting blocks would translate into a career in banking? Why not the “class drafter” (I did love to draw) or better yet, “class person who works in a place they love or who works with great all-star athlete”? people, but I am very partial to our team and how they contin- ue to demonstrate their effectiveness with each new project and Throughout my life, I’ve been fortunate to have a number of attainment of the next stretch goal! My CEO, Norm Skalicky, great jobs. They have varied from working in a local grocery has been in banking since the 1960s and continues to share his store during high school, to working as a student assistant in the vast knowledge, extreme energy, and contagious “find a way” President’s Office at my alma mater, Minnesota State University attitude to nurture our culture in living up to the motto of Stearns Moorhead, to working as a credit analyst at Wells Fargo, and Bank: “We Get the Job Done.” In a manner that not everyone finally to my current position as VP of Operations at Stearns Bank can follow, my CEO has also developed a very rewarding ESOP N.A., Equipment Finance Division.. The one constant, however, program as an additional motivator to do what is best for the is that I have been surrounded by great people throughout each company’s success and bottom line. of my positions – something that has made every job very enjoy- able. The leaders that I have worked for and continue to work I truly believe that while technology, product offering, and pric- for have had a similar effect on me and have done so in similar ing are factors, people have the greatest effect in the success of ways. These leaders provided strong employee motivation and a a company, hands down. The success comes as a result of dedi- feeling of worth and ownership in the company’s or office’s suc- cation, hard work and wanting to get the job done -- and done cess. I have been able to incorporate some of what I learned from right, because they know they are valued and entrusted to do my previous jobs and also some of what I learned NOT to do. so. How do our employees know this? Well, we tell them -- often! One of life’s greatest gifts is to meet and work with new

22 newsLine | JULY/AUGUST 2012 professional success, so make the most of each encounter and value the people who are in your lives, who work with you, and who work for you. Oh, and don’t keep it a secret until annual review time, a birthday or anni- versary; tell them now and often! Someone who says “hi” today at a restaurant, hotel, grocery store, or golf course could very well have a lasting effect on you and your future. I would be remiss not to mention one of the best effects of a chance encounter in my life. My first job during college, which I need to point out here, was much more difficult that it will sound, was serving tirelessly as the front- desk attendant for two dorms, primarily full of freshman women. Little did I know, as I was sitting behind the desk by an old Mac computer, that I would see a beautiful young lady pass by, and something would tell me to make sure she heard me say hi! I did say hi that day and caught a memorable smile from the woman I would later marry. I leave you people every day, and our industry provides many opportunities now knowing the effect of one of my encoun- to do just that. I am fortunate to have a career that is enjoyable, ters, and as I look at the beautiful family my wife and I have, I am challenging and rewarding, while allowing me the opportunity thankful I responded correctly the day we met! • to work with, support, and lead a wonderful group of employ- Daryn resides in Avon, MN with his college sweetheart, Jen, and ees. Because of this, each day of work is an opportunity to make their children, Tayte (7), Claire (4.5), and Brooke (2). Daryn a difference, have some fun, and, as a team, meet the needs of enjoys spending his free time with his family, traveling, attending our customers. You may never know the ultimate effect a chance sporting events, golfing, and fishing. encounter with someone will have on you or your personal or

Executive Director’s Letter Be Careful What You Wish For Continued from page 4 Continued from page 8 Elsewhere in this magazine is an ad about •The above problem is magnified sig- “single systems” marketed today. bringing NEFA to your neighborhood. nificantly if sections of the code base will ILP courses are just one of the ways to •Most of the benefits of a full life cycle change much more rapidly than other sec- “single system” come from a shared or do that. We have at least two baseball tions, which is the reality of a full life cycle games and a luncheon coming up in vari- integrated data model and not from a “single system” finance system or any shared code base. ous places, too. The Crab Feast is another other system that combines many diverse good example. How would you like to purposes. •Users of a full life cycle “single system” connect to other industry professionals in spend most of their time in modules your area? Let us know and we’ll help •Customers become very annoyed when related to their specific tasks; they are, in you plan it. Our multi-day conferences seemingly simple changes they want made effect, using the single system like a point are extremely valuable and lots of fun, in one part of the system must be delayed solution. but small, regional events are also great to wait for changes being made in another I guess I could summarize everything ways to gain market knowledge and great section of the code for a completely differ- I have said above with the simple state- ways to continue to grow this wonderful ent purpose (or have to be made in other ment “More is not always better”. The Association. areas because they are impacted by the ini- tial change). more functions any system encompasses, Check out our special offer for bring- the more difficult it is to make changes to ing your first-time attendee employees •No one likes testing software any more that system and ensure that the changes with you to the Funding Symposium and than they have to. being made do not have adverse impacts I will see you all in Washington, DC in •Changes to single code base “full life on other areas of the system. September! cycle” systems require considerably more Often this is such an onerous requirement testing by everyone. that the number of changes being made •All of the problems listed above are exac- are greatly reduced. In today’s economic erbated when using object oriented pro- environment, is that a good thing? gramming common to most full life cycle Be careful what you wish for. • Gerry Egan Executive Director Direct Phone: 847-380-5052 Email: [email protected]

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