Kit Menkin's Leasing News www.leasingnews.org Tuesday, May 29, 2001
( to be posted soon )
------------------------------------------------------------------------------------------Please send to a colleague as we are trying to build our readership. Subscription is free.
-------------------------------------------------------------------------------------------Headlines--DVI To Be Placed for Sale?
Salesman Pay Survey Results
eCredit.com Selects ProactiveNet
Donald P. Campbell to Head Commerce Bank's Leasing Business
Lot of European Money: Boullioun Financing Oversubscribed
Leasing News List Up-Dated
##### denotes company press release
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------12/2000 DVI Closed Broker Business Division
Bloomberg Reports:
DVI Holder Granite Capital Urges Prompt Sale of Company
By Daniel Goldstein, Bloomberg
DVI shareholder Granite Capital Management called for a "prompt sale" of the medical
equipment leasing company, a regulatory filing said.
Granite Capital, which holds a 6.6 percent stake in the Jamison, Pennsylvania-based
company sent a letter to the board of directors "recommending the sale of the company in
light of its inability to generate adequate returns," according to a Schedule 13D filing
with the Securities and Exchange Commission.
Granite Capital, controlled by investor Walter Harrison, urged "a prompt sale" of the
company in a May 22 letter to DVI's Chief Executive Michael O'Hanlon. Harrison said in
the letter, included in the 13D filing, that the company's performance "would rank as an
egregious destroyer of value."
Harrison said the company earns a "significantly sub par return on equity" between 8 and
10 percent and said that the company's book value per share "has grown at an even lower
6 percent."
Bloomberg reports a spokesman for DVI was unavailable to comment.
In January, the company was downgraded to "buy" from "strong buy" at U.S. Bancorp
Piper Jaffray. The target price is $20 per share.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Source 2001 Handbook
Thank you for the nice plug for the Leasing Sourcebook. The web page is still
under construction since we have been busy producing the new edition.
I really enjoy reading leasingnews. Thank you for providing a terrific
service.
Barbara Low
bibliotech@leasingsourcebook.com
( The website looked pretty good to me. editor )
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------The List
Chronological
104 changes
( This is also on line at our web site: http://www.leasingnews.org/list.htm
Corona America Financial,So.CA ( 5/2001 ) purchased by TotalFunding.com,
although called a merger.. Corona Pres. president, Jack Winsten worked at SDI
Capital, leaving them the same month SDI says no more broker business.
SDI Capital,So.CA (5/2001) reported has assets up for sale ( 5/2000 closed to broker
programs )
Alliance Funding Group, La Habra, CA ( 5/2001 ) purchased by MSM Capital,
headed by Mike Cingari, formerly pres. of Col. Pacific Leasing
Bay View Capital, San Mateo, CA ( 5/2001) Jeff Allard, CLP, COO "... decided to exit
the commercial leasing business and other business lines due to the strategic
change in the company's direction as determined by the new management
team." Parent company running out of money, a lot of good people let go.
Terminal Marketing, NY,NY ( 5/2001) Announcement all assets for sale by creditors
on May 31, 2001 at 2:00 p.m. (3/2001) Brokers report deals not being funded,
commissions not paid, appears out of money.
Bancorp Financial Services, Sacramento, CA (5/2001) Humboldt Bancorp closes
Bancorp Financial, citing second quarter loss "...not at this time expected to
exceed $8 million on an after-tax basis; Kevin Cochrane let go, Security
Exchange Commission, Sacramento looking into disclosures, reportedly other
activity. ( 4/2001) Humboldt Bancorp says "closing Bancorp Financial Services
"in press release and report to Security Exchange Commission, but CFO Pat
Rusnak says "company is for sale" and statement made for "accounting
purposes."
CIT ( 5/2001) CIT Shareholders Approve Proposed Tyco-CIT Acquisition
(3/2001) Tyco International Ltd. makes offer for about $9.2 billion in cash and
stock in a deal that would allow the manufacturer to finance purchases of its wide
array of products.
Bermuda Hq., N.H. operation office. ( 2/2001) Closing
Atlanta office and others, "freeze" on new broker business from this office (
5/2001) Bruce Nelson, Tempe, Arizona seeking broker business. "We are an
asset based lender and provide equipment financing in the following industries:
Construction, Transportation, Logging, Material Handling, Corporate
Aircraft, Mining, Energy, & Marine."
Imperial Credit Industries (ICII) (5/2001) Charles F. O'Hara, "We discontinued lease
originations through our Imperial Business Credit (IBC) ....( last year ) ICII
decided that it could not compete effectively in the small-ticket leasing arena.
IBC, however, continues to service the portfolio that they originated and have
expanded their servicing options to include middle- market leasing.
( for entire list, go to: http://www.leasingnews.org/list.htm Chronological and
Alphabetical;
the above is the Chronological up-dated version only, not the complete list )
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Salesman Pay Survey
Today it appears the industry average for salesmen who work for companies
that "discount" their leases ( sell their lease contracts to others ) is approximately 50% of
the profit. This is the present value of the lease contract, less funders discount charges.
Many are paid a percentage of the override is fees charged, such as for documentation,
site inspections, etc.
Some provide other expenses, such as health benefits, travel, but that is not common. A
few will pay up to 60% over a "quota."
One company did report paying 30%, but all expenses, health,
medical, and when the residual was received, 30% of the residual,
if the salesperson was still working for the company. ( This company
is no longer in business .) Another paid 45%, and when the quota was exceeded, 55%.
Volume was basically $10,000 to $20,000 in gross profits per
month ( less processing fees ), meaning the salesmen made anywhere from $60,000 to
$120,000 a year, averaging $80,000 per year. As anywhere, 20% of the salesmen made
in excess of $120,000 per year, always exceeding quota.
All were paid a draw against the commission in either by-monthly or
monthly installments with charge backs against quota not met; often
implied. Most were not given "house accounts", but relied on their
production of signed leases.
The industry average for salesmen who work for companies who act as lessors, not
selling or discounting their lease contracts, is more complex to state due to the various
volume requirements for salesman. The main difference is "rate" versus "volume."
Lessor salesmen generally have accounts that the lessor services
and remuneration is not on the difference between the rate of the lease, but primarily on
the volume of transactions.
Most salesmen here earn a base salary versus a draw. They are paid in excess
of making their quota, or an additional percentage based on volume.
Where minimum volume was $6 million, .0075 to .008 was common,
or $45,000 per year. A report of .02 on volume over $200,000 was
stated, meaning the quota was $2.4 million a year in sales for the base
salary.
One salesman reported making $50,000. plus.0025% of volume. He was
hoping to make $100,000, meaning his goal was $20 million a year.
It appears the average lessor salesman must produce $10 million a year.
This figure, of course, is based on the market. Larger ticket or smaller
tickets have a different ratio. To sum up the remuneration schedule
to satisfy all requirements would take many, many more pages than
this report. Again, this report is from our readers.
It was also reported that transaction the lessor did not carry, probably for
credit reasons, were either brokered by the company, giving a split of
30% to 50%, or as the circumstance with many, some approved by the
company, such as practiced formerly by Sierra Cities, the salesmen could
send to another source and received the total commission. It was not
reported if this is common wide in the industry for lessors.
In the 1970's, most leasing companies had salesmen who handled
"house" accounts, this changed in the 1980's with the growth of
brokers who worked solely for a "commission." The 1990's saw
the growth of "super brokers," who funneled other brokers transactions
for a commission. In addition, many funders were in essence super brokers,
discounting transactions for the present value, often including the
residual in the discount or pledge of the contract.
Discount Response:
From your survey it appears that we may be giving the shop away. We
have a very simple commission only program. As a small to mid ticket
lessor broker/discounter we pay 50% of the gross fee on the
transaction. Higher amounts up to 60% are paid to consistent
producers, We pay every Friday for deals that fund that week. We
provide complete office and back room processing and pay for all internal
costs such as D&B, CBR, rent, phone, overnight etc.. Salesman pay for
all external costs such as entertainment and travel. We share in all
promotional and trade show expenses. We will work with established,
proven producers for a few months should a draw be necessary and we are
always interested in finding new talent.
Len Sperl, Onyx Capital Corp, Pittsburgh Pa. occ@sgi.net
+++\\
Here in Minneapolis at NFG our sales reps earn 50% of GP on all transactions. We
provide office, phone, internet, marketing and trade show reimbursement. We have a
credit, documentation and funding staff to handle most of the non-selling processes. In
addition we do a draw on future commissions if a rep is new. Our monthly bonus plan is
$240 over $7500 (which is the reps 1/2) and $600 over $10,000 . Quarterly bonus is $720
over $22,500 and $1800 over $30,000. If a rep
hits $100,000 annually then the company provides a $600 per month car reimbursement
for the entire next year. We feel we have an aggressive compensation package because
we want all of our people to succeed. We are nothing without our people who got us here.
Oh yeah we also have a condo in Vail available to all our staff and reps to use at no cost.
We are currently attempting
to create a way to pass ownership to super stars as well, but have not finalized it as of yet.
Will Abbott
President
Northland Financial Group, Inc.
Direct (952) 746-5251
888-485-5834
Fax (952) 979-1590
email wabbott@northland-financial.com
www.northland-financial.com
++++
We pay our sales reps 50% of the GP after inspections, UCC's and routine
office costs. We also pay for marketing and promotion items, business
cards, brochures, handouts, mailings, etc, etc.
The reps responsibility is to bring in the business and that is it. I do not
require a monthly volume, but do ask that they stay in contact, preferably
in person, with any customer or vendor once a month at least. I price, doc,
close and fund the deals. All they do is make the contact.
Any deal originated or referred by that salesperson's vendor or customer is
theirs even if they haven't talked with them about the specific deal.
Average annual compensation is usually 50 to 65K, but the opportunity is
unlimited. We are presently looking for reps in northern New Jersey and
western NY and eastern PA.
888-583-0400
Bob Runyon,
Capital Agreements Corporation
capitallease@adelphia.net
+ ++
Here we make no salary, 45% of the gross margin on $1.00 residual deals, and
55% of the GM on the deals that we retain the FMV or 10% residual. We make
100% of the doc fee over what our sources charge and a draw is available on
a case by case basis.
++++
I pay my in-house sales people as follows: Base Salary of 30K per year.
this covers the first $5,000 in GP. I allocate 50% of any deal the generate
themselves and 10% of the GP on any house deal that I assign to them to help
them cover the first $5,000 in GP. On the second 5,000 in GP the sales rep
earns 25% and 40 % on any GP generated after that. A rep working for me can
justify their existence at about $800K per year in volume. They will make
$45-50K at $100K per month in volume and about $75K at $150K per month in
volume.
+++
We get 35% of the first $10,000 per month in gross that we bring into the
company. We get 45% above $10,000 and 50% above $18,000 per month.
We split document fees over the amount required in the approval. It is
all commission, no guarantee.
+++
W compensated salespeople with a 50% split of the
gross commission due on the leasing transaction. The salespeople generally
had use of our office space, and we paid for special promotions. In
addition, we provided an auto allowance of $300 per month, and a telephone
allowance of $150 per month. We found it necessary, in virtually all cases,
to provide the salespeople with a draw against future earned commissions. We
found that even our most experienced salespeople did not break-even on this
arrangement until they were employed with us at least three years.
The most generous compensation program I have first-hand knowledge of
provides the leasing salespeople with 65% of the gross transaction
commission. This company, a longtime, successful leasing broker, also
provides office space, use of telephone, and the payment of advertising
promotions.
In fairness to all leasing salespeople, their compensation potential depends
as much on their company's access to capital, and flexible financing plans,
as it does on their individual sales ability and work ethic. In our case, at
just the time our salespeople began to realize their individual potential,
their ability to grow their earnings was drastically curtailed by our loss of
bank funding.
My only advice to your inquirer is: carefully evaluate the company you
represent or will represent. Your ability to cultivate vendor and lessee
relationships depends to a great degree on your company's ability to deliver
on its credit program and funding promises. Unfortunately, in today's
economic and leasing environment, the only thing you can count on is uncertainty.
Steve Chriest
schriest@aol.com
Lessor Salesmen
Working for a tech company, as the Leasing Manager in a captive scenario I
find am in the a middle of the road in you compensation survey. I am paid
a base salary of 45K, .0075 of volume on deals until I hit 50% of a 6MM
quota. Over 50%, I am bumped to .1025 on volume. I also receive 33% of GP
on fee income from transactions. Volume Commissions paid out monthly, and
Fee commission paid out at the end of each quarter (the bonus incentive).
+++
I work for a leasing sub. of a large foreign bank. Mostly small ticket. Bases are in the
30's-40's depending on experience. We get .008 of volume with a kicker on spreads that
exceed 50 over. Quotas are $6mm-10mm depending on territory.
++++
$50K base
.25% of volume
Cell phone paid for.
I should be making $100,000++++
As a sales rep, with 4 years experience I make a base salary of $48k with a chance to
make commission once I make more money for the company than it takes to keep my
seat, i.e. $4000 per month. It seemed to be online with the Advanta commission plan but
unless you really generate volume you cannot realize commission.
++++
We pay 2% of equipment volume in compensation. Generally there is a base of $48K
and the 2% commish is paid for volume over $200K. They also earn 25% of the fee of
any brokered deal they bring in. The 25% split of broker income is independent of our
funded equipment volume We pay monthly though will probably shift to quarterly.
+++
Around here, be it small ticket or big ticket, I believe all the lease
origination personnel have had a base salary and then a bonus once a certain
minimum volume was done on a monthly (for the small ticket group) or annual
(for the large ticket group) basis. Our most experienced and senior large
ticket salesperson makes well into the 6 figure range I've heard but they
consistently book volume in the tens of millions each year. I think all our
large ticket group that have been here two or more years each make over
$100,000 per year between base and bonus.
Our small ticket people have had the potential to make six figures but it
has always been heavily volume dependent.
There are several different bases, based on whether or not they hit their bogey for the
year or month. Bonus is only paid once minimum target volume is reached.
If someone is not hitting their target within a year around here they
usually let them go.
*** we are still open to collecting comments as we are relaying on
our readers for information and have no axe to grind. Comments may
be “on” or “off the record.” To those who have responded, we have
held your comments “off the record” as requested, or quoted you,
giving you the opportunity to plug you compensation plan. editor
################### ##############
eCredit.com Selects ProactiveNet To Optimize Online Performance; ProactiveNet's Realtime Analytics Enable Corrective Measures Before Performance Slowdowns Impact
eBusinesses
ALVISO, Calif.--(BUSINESS WIRE)--May 29, 2001--ProactiveNet, Inc., a leading
provider of performance management solutions for Internet, intranet and extranet
applications, today announced that eCredit.com will adopt its software as a key element
of the company's online operations. eCredit.com provides automated credit and financing
solutions for Fortune 1000 companies, financial services organizations and e-businesses.
About ecredit.com
eCredit.com enables Fortune 1000 companies, financial services organizations and ebusinesses to transform business processes throughout the financing supply chain to
strengthen customer relationships, increase customer purchasing power, and grow the
bottom line. eCredit.com solutions automate credit and underwriting to better manage
risk and deliver a portfolio of financing options at the point-of-sale. Included among the
Company's customers are Cisco, CIT, Chevron, Fleet Leasing, Gateway and Ryder
System, Inc. eCredit.com, headquartered in Dedham, Mass., is a member of the Internet
Capital Group (NASDAQ: ICGE) partner company network. For
additional information, visit eCredit.com on the Web at www.ecredit.com.
About ProactiveNet
ProactiveNet, Inc. is a leading provider of performance management solutions for
Internet, intranet and extranet applications. The company's solutions enable businesses to
deliver a consistently positive web experience to end-users resulting in measurable
improvements in ency and online revenues. Customers include leading
enterprises and xSPs such AIG, eBay, Exodus and Walmart.com. ProactiveNet has been
named one of
Computerworld's Top 100 Emerging Companies to Watch in 2001, and was a winner of
The 2001 CrossRoads A-list Award. ProactiveNet is based in Silicon Valley at 2150 Gold
Street, Alviso, CA 95002-2159. International offices are located in the UK and India. For
more information, phone 877-277-6686, or visit the company's web site at
www.proactivenet.com.
# # # # # # # # # # # # # # # # # # # ## ##### ### #### ### #### ##### #####
Donald P. Campbell to Head Commerce Bank's Leasing Business
CHERRY HILL, N.J.--(BUSINESS WIRE)--May 29, 2001--Commerce Bancorp, Inc.
(NYSE Symbol: CBH) announced today that Donald P. Campbell has joined Commerce
Bank to head the company's growing leasing business.
Campbell, former CEO of De Lage Landen/Tokai Financial Services, will serve as
President of Commerce's leasing operation. Campbell assumed the position of CEO of
Tokai - a leading vendor/leasing firm - in 1993, where he rapidly expanded the company,
increased sales and started three new businesses.
"Our leasing services are the perfect addition to our diverse portfolio of financial services
and will enable us to better serve the growing number of small- to medium-sized
businesses that are playing a crucial role in the region's economic development."
"Commerce will provide leasing services throughout the Bank's footprint in New Jersey,
eastern Pennsylvania, northern Delaware and Manhattan, and focus on every type of
equipment that our customers use - from office and restaurant equipment, to printing and
production equipment to vehicles," explained Campbell.
( for full press release with contact information: go to: www.leasingnews.org )
# # ## # # ## ### #### #### #### # # # # # # # # # # # # # # ## # # # ## # ## # # #
Boullioun Financing Oversubscribed
Syndicate of 24 Major U.S., European, Japanese Financial Institutions Commit
To Provide US$1.45 Billion in Bridge Financing
BELLEVUE, Wash., -- Boullioun Aviation Services (www.boullioun.com) today
announced it has completed its first external financing under the ownership of
Westdeutsche Landesbank
Girozentrale (WestLB). Boullioun -- one of the world's premier aircraft operating lessors
-- was purchased by WestLB on Feb. 1. WestLB is based in Dusseldorf/Munster,
Germany.
After launching the facility at US$1.3 billion and receiving substantially greater
commitments, Boullioun accepted oversubscriptions up to US$1.45 billion from a
syndicate of 24 major U.S., European and Japanese financial institutions. Three banks -ABN AMRO Bank N.V. in the Netherlands, JPMorgan in London and WestLB -- are
Joint Mandated Arrangers of the 345-day bridge financing.