2003 May Issue

MAY 2003
Credit Risk Management

FEATURES

Beating the Odds With Portfolio Based Strategies
By Vernon Gerety
Today's successful leasing companies have found ways to turn the table through adopting a portfolio strategy approach to managing and growing their portfolios. Adopting a portfolio strategy goes beyond managing risk - it provides leasing professionals with the ability to maximize their profits. (Ref # PMGMT005)

Striving For Consistency In Credit Policies, Practices
By Ed Goodrich
Clearly, a sluggish economy in the U.S. poses challenges for any finance company. In fact, some who have been in business many years and enjoyed long-term financial success are now reporting losses. In this article, Caterpillar Financial discusses the strategies they've implemented to work successfully in this difficult economy. (Ref # CPR068)

Company Profile: Charter One Vendor Finance - Seizing An Seizing An Opportunity
By Stephen Phillips
Earlier this year, Cleveland-based Charter One Financial launched Charter One Vendor Finance, LLC to provide a wide range of financing and leasing services designed to meet the needs of manufacturers and distributors of capital equipment. Despite industry consolidation and uncertain capital spending patterns, Charter One sees the current atmosphere of uncertainty as an opportunity to build a sizable presence in the vendor financing marketplace. (Ref # CPR069)

Conflict of Interests? The Impact of Interpretation No. 46
By David Augustyn and William Sineni
FIN 46 presents a challenge to companies because determining whether an entity is a VIE requires extensive data about the entity that may not be readily available. Companies that intend to utilize VIEs will need to weigh the costs and benefits differently from the way they have in the past, and work with their lenders to determine the impact of FIN 46 on any transaction structure. (Ref # ACC022)

Diligence & Creativity Go A Long Way in High Risk Leasing
By James L. Beauregard
Blend high risk financing with a wobbly economy and you could be creating a recipe for disaster. However, ingredients such as thoroughness, diligence, flexibility and creativity can go a long way to closing high risk deals. (Ref # CRD056)

Collection Practices - Good Or Just Average?
By John G. Rosenlund
Portfolio Management/Collection is not rocket science. It is a consistent, proactive and relentless methodology that defines and judges itself by the results - or lack thereof. Surviving in a challenging environment requires critical, proactive thinking, effective goal setting and establishing workable strategies. (Ref # PMGMT006)

Taking the "Bite" Out of Today's Credit Risks
By Andrew G. Mesches
Even the most seasoned risk management professionals have never experienced an economic downturn quite like this. However, times of conservative spending habits and decreased cash flow can create a wealth of opportunity for equipment leasing organizations.
(Ref # CRD051)

Benchmark Reporting: A Clear View of the Portfolio
By William H. Phelan
Lenders often feel adrift on an uncharted sea, knowing only that the weather is good or bad. Similarly, granular data about segments of the economy are unavailable to lenders due to a lack of detailed information. What is needed, and what is currently available through information technology, is real-time information to allow lenders to react quickly to the changing environment they face. (Ref # PMGMT007)

Credit Risk in Tough Times: Weathering the Storm
By Jerry Smith
It's been said time and time again, the current economic situation has provided some unique challenges. By focusing on the fundamentals of cash availability and prompt identification of credit quality issues, leasing professionals can position themselves to weather the current storm. (Ref # CRD052)

Credit Decisioning Process… Industry Hallmark Undergoes Dramatic Shift
By Michael Pennell
When AgStar Financial had reached its operating limit, it quickly recognized the need for an integrated credit decisioning platform that could span its lease business and be accessible on the Web. Through an integrated platform, AgStar has a new competitive edge having benefited from faster response and processing times. (Ref # CRD053)

Credit Scoring: Added Boost of Productivity in Small Ticket Business
By Jeff Weisman
More and more, credit scoring is becoming a vital tool in lessors' ability to make credit decisions quickly, consistently and cost-efficiently. As part of a comprehensive credit process, credit scoring provides an added boost of productivity to those in the small ticket business. (Ref # CRD054)

Lessons Learned: Know When to Hold Them; Know When to Fold Them
By Jean Mansen
This article will examine the factors at play when lessors consider restructure requests and workout situations. After all, as a gambler, the lessor is betting that he or she can make money on investments. And, as in poker, there are times to hold and times to fold.
(Ref # CRD055)

COLUMNS

CAREER MOVES
How to Impact the Waiting Game
By Jim Pawlak
I recently asked some job hunters: “What’s the most frustrating part of your job search?” (Ref # JBS071)

LEGAL WATCH
Stakes Are High In Nondischargeability Action
By Lesley Anne Hawes
An action to declare a debt nondischargeable in an individual’s bankruptcy is one of the most powerful weapons a creditor has in a Chapter 7 case. (Ref # LGL104)

TOP GUN
Back to Basics: Leasing Language
By Michael Granieri
Prior to 1977, companies quite freely treated leases as off-balance sheet transactions. In essence, the thinking was that since you did not own the equipment, you did not have an asset; therefore you can’t have a corresponding liability. (Ref # SAL126)

DISPATCHES FROM THE TRENCHES
From Usury Claims to Severability Provisions
By Kenneth P. Weinberg, Esq.
This issue of Dispatches from the Trenches discusses: (1) claims made against finance lessors, including usury and unconscionability
claims; (2) when a lessee can be sued in a lessor’s home jurisdiction; and (3) non-substitution clauses, severability provisions and ratification. (Ref # LGL103)