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January 2003


Vol. 1 No. 1
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ABF Journal, January 2003
January 2003

Risk Management

Effectively Navigating the Elements of Risk
By Vince Twomey and Bryan Corsini

The concept of risk management is the most important factor in operating a successful secured lending business. While these concepts and techniques may vary among lending institutions, successful risk management always contains execution of the elements of RISK: Review, Inspection, Servicing and Key Indicators. (Ref # IND029)

The In-House Appraiser’s Role in Asset-Based Lending
By Michael A. PetruskiInitially, asset-based lenders created in-house appraisal/collateral evaluation teams to appraise select machinery and equipment assets and real estate and to review third-party appraisals. Today, more ABLs have expanded the in-house teams to insure that third-party appraisals meet industry requirements and internal credit risk criteria. (Ref # APP008)

Purchase Order Financing: A Viable Financing Alternative
By Douglas B. Durham

In this article, Doug Durham of Production Finance International, explains purchase order financing by exploring transaction structure and risk and the use of intercreditor agreements. Under the right circumstances, purchase order financing is a viable alternative to meeting specific financing needs. (Ref # LSP005)

Orchestrating A Successful Field Exam Outsourcing Program
By Michael A. Boeheim

A successful co-sourcing/outsourcing program is one that incorporates both the benefits and deficiencies of utilizing an outside service provider such that the positive aspects are captured while mitigating the disadvantages through a strong business partnership. Managing and controlling the process coupled with regular communication and feedback will make for a successful relationship. (Ref # FIELD002)

Looking for Certainty in an Uncertain World
By Harold Hurwitz

In these times when the only constant is change, lenders should strive to provide a level of certainty by taking advantage of a wide range of due diligence tools, opting for expertise and specific analysis versus relying on blanket generalities. (Ref # IND030)

“My Recruiter Never Calls Me” Communication and Effective Partnerships
By Michael A. Toglia

In an executive search, finding a candidate who possesses the right skills for the job can be a daunting task, even for the most seasoned hiring manager. As the hiring environment in the financial industry continues to change, one simple tenet holds true: the basis for a satisfying relationship between the hiring manager and recruiter is effective two-way communication and trust. (Ref # CARM001)

Following the Trade Cycle in Inventory Finance
By Jeffrey Koslowski

In financing inventories, understanding and analyzing the trade cycle is central to the underwriting process. Jeffrey Koslowski, EVP of Gerber Trade Finance discusses how, in the purest sense, his firm does not finance inventories, but more specifically finances the movement of inventory. (Ref # LSP006)

Deflation: The Possibility No One Wants to Face
By Robert P. Gaudiosi and Alex L. Sutton

Ever since the period of hyperinflation of the late 1970s and 80s, the Fed’s focus has been on the fight against inflation. Now for the first time since the 1930s, the Fed is faced with the not so remote possibility of deflation –a threat that poses a very real threat to asset-based lenders. (Ref # IND031)

D&O Liability Insurance: Tremendous Consequences, Largely Misunderstood
By Jeremy N. Alderman

Directors & Officers Liability Insurance is perhaps the most misunderstood insurance purchased by corporate America today and coverage is only as good as the corporate indemnification written in the by-laws. This article explains how D&O Insurance works and what it covers. (Ref # INS002)

Jump-Start Your Career Search… Start With a Personal Game Plan
By Jim Pawlak

If you’re out of work, you find yourself with alot of time on your hands. Starting with a personal game plan and utilizing your project management skills can jump-start your career search and perhaps most importantly, can make you feel good about yourself. (Ref # CARM002)
Columns

A PROFILE OF SUCCESS
Exhilarating & Never a Dull Moment
A Profile of William R. Davis, President & CEO of Congress Financial Corporation

After almost 34 years in the asset-based lending industry, Bill Davis, President and CEO of Congress Financial Corporation still looks forward to each day and the many challenges and opportunities the industry affords. In this profile, Davis speaks of his satisfaction with solving problems and working with customers as valuable business partners. (Ref # EXEC002)

TURNAROUND CORNER
Restoring Trust in Corporate Governance
By Peter L. Tourtellot, CTP

With the financial shenanigans that have taken place in corporate governance recently, today’s challenge is to restore trust and confidence in our once robust economic engine. It’s the professional turnaround manager who can help lead the way. (Ref # TM004)

PUTTING IT TOGETHER: ANATOMY OF ABL TRANSACTIONS
Associated Grocers Turnaround: Epitome of Effective Collaboration
By Gregg C. Wise

When Turnaround Manager Bob Hoyt, of Partners for Corporate Renewal, was looking for a seasoned lender with experience in the food industry to assist in his revival of Associated Grocers, he turned to the Structured Finance professionals at GMAC Commercial Finance. Despite a difficult financing environment, GMAC closed on a fully underwritten $93.5 million senior secured debt transaction. (Ref # DLS002)

LEGAL EYES
The Revised UCC:

How Consignment Agreements Become Security Agreements
By Patrick M. Jones

A vast majority of consignment agreements in existence were not drafted to address the subtle implications of the Revised UCC. If you are a lender that provides goods to a reseller, or vice versa, you would be well advised to review the terms of your agreement to determine whether you should file a financing statement. (Ref # LGL008)

FACTORING FOCUS
Factoring as a Transitional Financing Source
By Stephen K. Troy

There are four phases that are relative to the factoring business – the peak, the valley, the up, and the down of the economic cycle. It is truer to label the factoring business as a transitional financing source in the economy, rather than a countercyclical one. (Ref # FAC011)

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