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13apr

April 2013

Specialty Lending and Factoring Issue
Vol. 11 No. 3
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FEATURES

Game Over? Downloading Poses Threat to Video Game Stores & Related Collateral - The shift to digital content delivery of video games will have a significant impact on the value of physical media such as cartridges and consoles. Tiger Group's Michael McGrail's advice to secured lenders in the space includes closely monitoring trends and key metrics, as well as regularly reviewing collateral valuation.
Small Business Finance — Why Aren’t Banks Lending? - According to Mark Sunshine, many successful small business owners are wondering why they aren’t invited to the Fed's "low interest rate party." He provides five major reasons why good borrowers with plenty of cash-flow, net worth and collateral have a tough time finding bank loans.
Creative Thinking — New Ways For ABLs to Realize Returns - Although today's economic environment leaves many middle- and lower middle-market companies struggling to secure capital, it allows asset-based lenders to develop creative strategies and identify overlooked areas of opportunity to realize considerable returns, while enabling access to liquidity for these businesses.
2013 CFO Outlook: U.S. Senior Financial Execs Focus Forward - Corporate leaders look for signs of sustained economic recovery to embolden strategies that drive meaningful innovation and growth.
Innovations in Factoring — Limited Subordination Agreements - To assist the growth of small businesses in a flat economy, Capstone Capital developed the concept of a limited subordination agreement. As Joseph Ingrassia explains, the financial structure is rooted in factoring that combines a modern mix of PO finance and trade finance to help the lender get paid and provide working capital to the small business.
PO Finance — From Mainstream to Alternative Funding and Back - As purchase order finance has become more mainstream, Paul Schuldiner describes two types of PO finance used most often by borrowers — and points out that providing these products comes with a high degree of risk requiring a skill set not usually found in a factoring or ABL environment.
Leading the Way — CIT Trade Finance Raises Awareness of A/R Factoring - Launching Factoring University has increased awareness about accounts receivable factoring and raised the presence of CIT Trade Finance as an expert in the industry. However, Factoring University is just one of the initiatives developed by the group's president Jon Lucas and his team to approach the business from a new angle.

COMPANY/EXECUTIVE PROFILE

Monroe Capital’s Koenig — Middle Market Thought Leader of the Year - ABF Journal contributing editor Howard Brod Brownstein catches up with Ted Koenig, president & CEO of Monroe Capital LLC, who was recently named the “2012 Middle Market Thought Leader of the Year” by The Alliance of Mergers & Acquisition Advisors and Grant Thornton.

FROM ALL FACETS

TURNAROUND CORNER

Speed is of the Essence… Rapid Execution to Restore or Enhance Profitability - Today's corporate restructuring initiatives need to move ahead as quickly as possible to effect permanent improvements. Conway MacKenzie's Tim Stallkamp discusses corporate functions that, when tackled swiftly and pragmatically, can lead to sustainable results that are fundamental to a turnaround.

SPECIALTY LENDING
RECENT HEADLINES, NOTABLE TRANSACTIONS & ADVICE

Import/Export Factoring — Going Where Traditional Financial Service Firms Fear to Tread - Over the past five years, the import/export sector expanded significantly. However, traditional financing tools available to small businesses in this arena continue to shrink, leaving behind a marketplace opportunity with enormous potential for import/export trade finance and factoring firms.

BANKRUPTCY UPDATE

Guess What? Ninth Circuit Splits with Fourth Circuit in Ruling on Involuntary Petition Against Guess Founder Marciano - The Marciano decision is an important ruling for creditors that may be considering an involuntary petition. As Lesley Hawes explains, there is limited reported case law addressing involuntary petitions, and this decision creates an easy-to-follow, bright-line test for determining whether a petitioning creditor with a judgment that is on appeal but not stayed has a claim that satisfies the requirements of §303(b)(1) of the Bankruptcy Code.

LEGAL EYES

Fair Market or Value in Use? — GM and the Valuation of Collateral - Although the Chapter 11 bankruptcy of General Motors has all but vanished from the headlines, it is still making waves with an interesting and deceptively simple decision on the valuation of a secured creditor’s collateral.

FINAL CUT

FinalCut: JPMorgan-Led Group Ups J.C. Penney Borrowing Capacity - ABF Journal illustrator Jerry Gonzalez shares his interpretation of J.C. Penney increasing its borrowing capacity by $100 million through a 27-bank lender group led by JPMorgan.

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