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I have been to NYC, Atlanta, and LA in the past month and it was interesting to hear some comments from various people. In Atlanta, at the CFA meeting, an economist who is an advisory to the Fed Board was the speaker. Not only did he present some very convincing evidence that our economy is headed toward a downturn but he was a very good speaker and for those who have heard economists before, that is a miracle in itself. He projected that the first stage could occur as soon as end of third or fourth quarter but felt that without a doubt, we should be there by first quarter, 2007.
It is a shame that I am excited about a downturn but a saying in our industry that is so apt is "In the good times it is good and in the bad times it is great". I think with a little downturn, we should see some the end of this "Stupid Banking Cycle", which will be exciting to the industry as a whole because some of the entities are doing deals that even a factor would not do. So why are they being done? Perhaps they just do not understand the risks involved. They will know them intimately once the downturn comes.
The moral of the story is to stay close to the clients that took the bank deal, stay close to those stupid banks that booked the deal, and hope they have not advanced so much the deal can't be taken out. These are will be your low hanging fruit when the downturn hits.
And by the way, I hope it is a soft landing for our economy because a strong recession is not good for any of us but a slight correction in stupid thinking would be welcome.
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I want to start out with a story called "A FEW GOOD BDO's"
BDO: "You want answers???"
ACCOUNTANT: "I want the truth!!"
BDO: "You can't handle the truth....but I'll answer the question.
Son, we live in a world that requires revenue.....who's going to find it? You? In Accounting?
We have a greater responsibility than you can possibly fathom. You scoff at Sales & Marketing and you curse at our incentives. You have that luxury....you have the luxury of not knowing what we know; that while current results are low and tragic, we're driving new sales and that our effort, while resented and misunderstood by you, drives REVENUE! You don't want to know the truth because deep down, in places you don't talk about at staff meetings....you want us on that call; you NEED us on that call! We use words like leverage, cash flow and even credits; we use these words as the backbone of the time spent negotiating something....you use them as a punch line! I have neither the time nor inclination to explain myself to people who rise and sleep under the very blanket of income I provide and then question the manner in which I provide it. I would rather you just said "thank you" and went on your way. Otherwise, I suggest you pick up the phone and solicit some customers yourself. Either way, I don't give a damn what you think you're entitled to!"
ACCOUNTANT: "So did you or did you not expense the lap dances?"
SALES: "You're d**n right I expensed the lap dances!!!"
The story is a little on the edge for my tastes but it does highlight the thought process of sales versus credit. We should seriously consider the different viewpoints of the BDO and underwriting, ops, etc…. It is said that if you could walk in a person's shoes, you would be much more tolerant. While this is not always possible, ensuring that each different entity knows a day in the life of the other could go a long way toward tolerance among these very important company functions. Not that either should change anything they are doing, only giving an appreciation for the trials that each must go through in accomplishing their mission for the company.
And no, I am not lobbying to have lap dances allowable expenses.
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As we are looking forward over the next 12 months and back over the past 12 months, the trend has been toward the lowering of rates; which should be no surprise to anyone, but has competition also forced you to give ground on the structuring side of deals?
You can give up some rate or you can give up some structure but if you are giving on both sides of the equation to win the deal, then you could be headed for the edge. Of course, the banks are certainly doing that and when we look at the deals that have been done by some of them, scratch our head and wonder what in the world they could be thinking. The problem is that they are not thinking, so just refuse to join the herd headed over the cliff. It is better to pass on the deal and hold the line than to be at the bottom of the heap.
I truly believe we are heading to better times in the very near future; so hold the line and the changes in the economy will take out the stupid lenders and leave the smart ones standing. The BDO's will not like this as it has been tough for them as well this year, but better to have a strong company with lower short term profits than to have a company with severe losses and no inventory (money) to lend.
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Churchill Financial appointed Eric Herr, Rich Daileader, and Casey Zmijeski as the new managing directors of its Structuring and Origination Group.
Howard Moore is the newest member of the Capital Factors team. He was hired as the company's executive vice president and will be in charge of marketing and growth.
Bibby Financial is proud to announce the appointment of Eric Hunter as President of the company's transportation division.
CIT Group Inc. appointed Steven Parker to business development officer in their Commercial Credit division.
Marshall Business Credit, LLC hired Rob Severson as a business development representative.
Textron Financial recently named Dan Sullivan as vice president-business development to their Systran Financial Services division.
Capital TempFunds is proud to announce the appointment of Patrick Rylee as vice president, business development officer.
Eric Serenkin joined CIT Group, Inc. as senior vice president and business development manager, CIT Commercial Credit.
Christopher Cooke was named western regional sales manager for UCC Direct along with Darin Pankin as national sales manager for the eastern region.
Goodman Factors hired James Gillespie as vice president and business development officer. Mr. Gillespie is responsible for the Great Lakes region.
Summit Financial Resources named Kathie Schroeder vice president/business development officer. Ms. Schroeder is based in Dallas/Fort Worth and represents the Southwest Region.
State Bank Of Texas hired Vince Mancuso as vice president, credit and operations manager of their Working Capital Finance group.
CIT announced the appointment of Michael Baresich as vice president and chief information officer.
Sovereign Bank announced that Seth Cooper has joined the firm as vice president of Sovereign's Business Alliance Capital Corporation team. Mr. Cooper is responsible for new business development and is based out of West Hartford, CT.
Mennen Maquilan joined Celtic Capital Corporation as an account executive.
AdvanceMe is proud to announce the appointment of Mark Lorimer as chief marketing officer.
Presidential Financial appointed Kelly Collins as senior vice president. Ms. Collins is based in Charlotte and Jamestown, NC and will be responsible for business development throughout North Carolina and areas of South Carolina.
Ira Kreft is leading NewStar Financial's new Chicago office as managing director.
Celtic Capital Corporation is proud to announce the appointment of Derrick Wong as vice president of client development.
Marshall Business Credit, LLC hired Gary Peters as vice president of the asset based lending division.
Seth Myers is the newest member of BLN Capital Funding serving as the company's Senior Credit Officer.
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INTERNATIONAL FACTORING ASSOCIATION - www.factoring.org
Monday & Tuesday, June 12 & 13th, 2006 - Successful Transportation Factoring
Monte Carlo Resort and Casino - Las Vegas, NV
 A seminar dedicated solely to transportation factoring professionals. If you are purchasing transportation paper or considering doing so, don't miss two days of discussion about such important issues as:
• Revenue Enhancing Measures • Additional Products You Can Offer • Effective Pricing Structures • Customizing the Transportation Factoring Contract • Transportation Fraud Schemes and Protective Measures • Effective and Targeted Marketing • Credit Information - Where to Get It and What To Do With It • Comprehensive Auditing and Processing Transportation Paper • Effective Collections That Won't Diminish Profits • Factoring Transportation Brokers and Other Intermediaries • What FMCSA and DOT Compliance Means To You • Problem Loads and How to Mitigate Those Problems • The Four Worlds of Transportation Factoring
Wednesday - Friday, June 14th - 16th, 2006 - Niche Industry Factoring Training Class
Monte Carlo Resort and Casino - Las Vegas, NV
• Medical Receivables • Construction Receivables • Agriculture and PACA • Real Estate Commissions • Temporary Agencies • Legal Judgment Receivables • Software Company Receivables • Credit Card Advances • Apparel Industry • Government Receivables • Entertainment Industry • Print Shops • Furniture Industry
Thursday & Friday, August 10th & 11th, 2006 - Presidents / Senior Executives Meeting
Hilton Los Cabos Beach and Golf Resort - Los Cabos, Mexico
 Presidents and Senior Executives of factoring organizations have unique needs. One of the best ways to help with your strategic planning is to spend time discussing those issues with other Presidents and Senior Executives in the factoring industry. This meeting is designed to facilitate that discussion.
We will be discussing specific topics that are of concern to Senior Executives. Some of the topics that we will concentrate on are:
• Marketing • Credit and Underwriting • Account Liquidation • Fraud Presentation • Technology • Debtor Risk • Looking for Hidden Red Flags • Threats to Your Security Interests • Making Yourself Unique
The second component of our meeting will concentrate on networking. We will begin on Wednesday evening with a Welcome Reception. Breakfast and lunches will be held together to give you a chance to network with the other attendees. Dinner on Thursday evening will also be included.
FINANCE FORUM - www.thefinanceforum.com
The Frisco Rough Riders Baseball Game is Friday, June 16, 2006. The gates open at 6pm; the game starts at 7pm.
NATIONAL FUNDING ASSOCIATION - www.nationalfunding.org
Charlotte Chapter: Luncheon meeting at The Palm Restaurant is Tuesday, June 27, 2006 at 12:00 noon. Our speaker for the June meeting is member, Matt Joyner and his topic will be "10 Things Executives Should Know"
See NFA Calendar page for more details www.nationalfunding.org/calendar.html
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