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They have developed customized leasing programs specific to the needs of our industry. Clune has taken away many of the inherent dangers associated with presenting a lease that eventually end up holding our customers hostage. The beauty of Clune is that they have taken away the pain of the past and packaged a solution that will offer overall long-term value for our customers and us. We are also better protected against losing a customer's future business.

James O'Keefe, R.S. Knapp Co Inc

Who Ya Gonna Call?

By Kevin F. Clune, CLP

Without a doubt, there has been a seismic shift in the Leasing Industry in the past twelve months. The July 27th Wall Street Journal cover page story alludes to this phenomenon in the article, "Loans Shrink as Fear Lingers, Portfolios at Big Banks Fall 2.8% in Last Quarter; Institutions, borrowers Both Wary" by David Enrich and Dan Fitzpatrick. They state in the opening paragraph, "Lending continues to slow as bankers and borrowers refrain from taking risks, in a bearish economy." In the same article, Richard Davis, chief executive of U.S. Bancorp, is quoted as saying, "I think it is good for banks if we continue to be prudent as an industry and not reach to get loan growth by reducing our underwriting."

Winds of Change

As an independent lessor that has been in the industry for over 35 years, I have seen many fluctuations. The concept of leasing is as old as the Phoenicians, and today eight of ten U.S. companies choose leasing to acquire essential equipment. Prior to the developments described above, the demand for leasing was being met by independent leasing companies such as Clune & Company, manufacturers of equipment, the financial service sector and some banking institutions.

Many of the above mentioned lease providers have now restructured their business model, resulting in a severe limitation of available lease financing. This set of circumstances has resulted in a scarcity of funding sources and has left businesses scrambling to find an alternative lease partner.

So, "Who ya gonna to call?"

(to borrow a phrase from the movie, "Ghost Busters")

Inquiries are being made and new partnerships are being formed as business owners make inquiries through contacts in their business networks, blogs, internet searches, or trade associations. We are fielding calls from many such vendors and even trade associations.

If you are currently paying on a lease, a business owner would be wise to contact their lessor to determine their viability, and check on the terms of their contract, especially if they are counting on being notified of an impending termination. Similarly, if the business owner is planning to contact their leasing partner for an equipment acquisition, they may be surprised to learn that funding is not available.

Good News

The good news is that the benefits of financing an equipment acquisition with a lease have not changed:

• preservation of capital
• preservation of bank line of credit
• almost 100% financing
• frequent tax advantages

With this in mind, we are confident that the demand for a lease product will increase greatly in this economy. Our business is sensing the ground moving under us and we are anxiously waiting for the dust to settle.

As a lender, primarily in the small ticket market, we are making every effort to position ourselves to meet the demand for leasing products in this particular niche of the industry. Similarly, there are other independent leasing providers and funders who have had the financial strength to withstand the storm, and should be able to fill the void in other markets. We would like to earn your business.

With a little patience, research, and determination, you will discover whom to call.

Kevin F. Clune