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03jun

June 2003


Vol. 1 No. 6
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ABF Journal, June 2003
June 2003

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The “Mirror-Image” Appraisal —
A New Paradigm Emerges in the Asset Appraisal Industry

By Stanley Gilman

In today’s highly volatile marketplace, lenders are placing increased emphasis on fully understanding asset values and are turning to the “mirror-image” appraisal. In making credit decisions, lenders can rely on this paradigm to reflect asset value in a liquidation scenario. (Ref # APP010)

Keeping Up With Revised Article 9
By Steve L. FoxAs the economy remains uncertain, a renewed emphasis on costs has managers re-examining internal procedures and controls. This article discusses the impact of Revised Article 9 and web-based management tools on a manager’s ability to expand control and increase productivity.
(Ref # GEN014)

Factor vs. Malefactor: Identifying Fraud in Lending
By David H. Cohen

Since “bad guys” have varying backgrounds, levels of sophistication and patterns in their tactics, it is important for a lender to know what to look for and how to respond to fraudulent activity. The following article illustrates how tell tale signs can be identified in the due diligence process. (Ref # FRD002)

ABLs Clear Path to Financing for Canada’s Growing Companies
By Stephen Smith

Throughout the Canadian lending markets, dedicated ABL providers are increasingly active, offering an approach with considerable potential and appeal for Canadian companies with constraints on their ability to access traditional cash flow-based funding. (Ref # INTL004)

Technology Changes the Face of Factoring
By Bert Goldberg

Not so long ago, the only option for companies looking to enter the factoring industry was to hire a programmer to write a customized factoring application. This option was expensive and time consuming ultimately posing a barrier to new entrants. The development of a canned software product at a reasonable price changed the factoring industry and enabled individuals to open their doors quickly. (Ref # TECH003)

UCC & Revised Article 9: Where You Don’t Search May Hurt You
By Edward W. Noyer

While many people are aware of the proper jurisdiction to file a UCC under Revised Article 9, what many people don’t understand is that although the filing office has been simplified, searching has become more complex. The following article uncovers four common misconceptions of conducting due diligence searches. (Ref # LGL015)

Everything Has a Price… Determining Its Value Is Key
By Lester M. Friedman

When asset-based lenders are considering loaning large amounts of capital, they need to ensure that the value of those companies’ assets exceed the loans. That is why appraisals are so important, and why hiring the right appraisal and valuation firm can mean the difference between success and failure. (Ref # APP011)

Making the Most of Asset-Based Field Exams
By Ronald G. Barber

Field exams are conducted for various reasons – to satisfy regulatory requirements, to comply with loan covenants or just to keep the borrower in line. Whatever the reason, the field exam should be approached with the idea of giving the lender the best and most concise information possible. (Ref # FIELD003)

Ex-Im Bank: Going Where Others Fear to Tread
By Letitia Kress

The mission of the Export-Import Bank is to create jobs through exports. One way it accomplishes this mission is by providing guarantees of working capital loans for U.S. exporters, by assuming risks that commercial lenders cannot accept. (Ref # INTL005)
Columns

A PROFILE OF SUCCESS
More Than Meets the Eye
A Profile of Terry Ullrich, President of JPMorgan Business Credit Corporation

Soft-spoken, informal, and with a gentle humor, Terry Ullrich, president of JPMorgan Business Credit is quick to deflect attention from himself and his achievements. He’d rather talk about the industry, JPMorgan and his team or the CFA. By all accounts, this industry leader is a true banker and a gentleman. (Ref # EXEC007)

PUTTING IT TOGETHER: ANATOMY OF ABL TRANSACTIONS
Wells Fargo Foothill Provides Cover When Lightening Strikes
By Andrea L. Petro

Even though lightening struck twice, the lending relationship with Wells Fargo Foothill Lender Finance and HPSC, an equipment finance company specializing in the healthcare industry, has proven to be durable yet flexible when necessary. (Ref # DLS006)

LEGAL EYES
Sharing the Meal — Mezzanine Lenders at the Table
By Frederick W. Runge, Jr.

Senior lenders and mezzanine lenders achieve their legal status through a subordination agreement, which tends to be the most hotly negotiated document in any senior loan closing. This article provides an approach from the senior lender’s perspective of evaluating some of the most contentious points of these negotiations. (Ref # LGL016)

TURNAROUND CORNER
Turnaround Strategies to Consider When the Storm Clouds Hit
By Michael Boudreau

When a borrower’s liquidity disappears, collateral values erode and survival becomes questionable, lenders want to be proactive and work with the borrower to determine the next strategy. Whatever the strategy, the best examples demonstrate a strong example that is understandable, logical and achievable. (Ref # TM013)

FACTORING FOCUS
Bon Appetit! A Menu of Outsourcing Items
By Thomas G. Siska

Factors, due to the nature of their product offering, are accounts receivable servicing experts. When the A/R is “less than perfect”, ABLs can utilize the resources provided by factors to both “make the deal happen” and lower the overall risk of the transaction.
(Ref # FAC024)

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