Equipment Leasing is on the Rise

U.S. companies are investing more in equipment than they were a year ago. The Equipment Leasing and Finance Association said its monthly index of business volume rose 21% to $5.1 billion last month compared with January 2011. The rise reflects moves by companies to replace computers, vehicles, construction equipment and other assets as the economy improves. It also reflects thawing credit markets, the association said.

Source: WSJ.com, ELFAonline.org

Mazuma Capital Funds $12.5m Transaction For Thermal Coal Producer

DRAPER, UTAH, February 17, 2012 – Mazuma Capital, a leading national direct lender, today announced that it has funded over $12.5 million dollars for a U.S. high quality thermal coal producer.

The coal producer sought several funding sources that had expertise in funding newer companies. They had many challenges present in the transaction from the type of equipment, to the documentation aspect.  There were also several factors that affected the credit due to recent mergers.  Due to these challenges the financing was denied through several well-known banks and vendors. Mazuma Capital was ultimately the right financing source to help structure and fund the transaction.

A favorable structure was an important objective in order to provide cash flow, the appropriate tax, and accounting factors to meet the financial goals of the company. The structure also needed to provide the ability to expense the payments over time.  Mazuma Capital was able to secure an approval in a timely fashion while meeting the needs of the company; from the terms to the unique structure.

“This is a newer company that is still in the midst of a huge growth phase.  Therefore, this transaction produced several challenges in finding a suitable financing structure to meet the goals of the company.  The lack of history, recent buyouts, and mergers made this a more difficult credit.  Our team worked hard to develop a perfect balance with the right structure, and suitable terms for the company,” said Jared Belnap, President and CEO of Mazuma Capital.

About Mazuma: Mazuma Capital is committed to our client’s success. Our unique capabilities and innovative product offerings provide solutions accelerating financial growth. Servicing both rising companies and established businesses, Mazuma continues to secure its position as the middle-market industry leader. We build long-term relationships by delivering on our commitments. Mazuma co-authored the Utah Best Practices Alliance. Mazuma Capital subscribes to the ELFA Code of Fair Business Practices and NAELB code of ethics.

Media Contact:

Julie Fuchs

801-816-0800 Ext. X291

jfuchs@mazumacapital.com

U.S. Companies Keeping Business At Home

U.S. companies, facing slowing markets and rising costs around the world, are taking a new look at their home market.

With growth slowing in China and a slump gripping much of Europe, companies are adding capacity in the U.S., replacing aging equipment and even moving overseas production back from low-cost labor markets, a sign that corporate America could be poised to take a bigger role in the economic recovery.

Union Pacific expects to buy twice as many locomotives this year, spending upward of $400 million.

The pace of earnings growth at companies slowed in the fourth quarter, and there are signs that profitability is falling. That is prompting companies ranging from beverage maker Coca-Cola Co. to industrial supplier Emerson Electric Co. to disclose cost cuts. But after keeping a tight lid on costs for the past few years, many other companies are expanding capacity to meet rising demand.

United Rentals Inc., the world's largest equipment rental company, plans to increase its capital spending by about a third, to $1 billion, this year as more construction and industrial companies opt to rent rather than own equipment like elevated forklifts and backhoe loaders. Cummins Inc., which makes engines for trucks and heavy equipment, is boosting its capital spending to more than double the rate of two years ago.

"It is an environment that feels like it is building momentum," William Plummer, United Rentals' chief financial officer, said in an interview. "We are coming out of the depths of the recession and are starting to build momentum on the upside."

U.S. businesses increased their investments in December. According to the Commerce Department, new orders for nondefense capital goods excluding aircraft, a proxy for how much companies spend on equipment, climbed 2.9% from November. That ended two months of declines, suggesting businesses are becoming more confident. Compared with a year earlier, companies shipped 9% more.

There are signs that hiring may be picking up as companies expand facilities. Job growth in January was its highest level since April, with unemployment falling for the fifth consecutive month.

Source:  WSJ.com

Outlook for Manufacturing in 2012 is Up

U.S. manufacturers are bullish about 2012 despite lingering economic problems.

On Jan. 3, the Institute of Supply Management announced manufacturing expanded for the 29th-consecutive month. "Manufacturing is finishing out the year on a positive note, with new orders, production and employment all growing in December at faster rates than in November, and with an optimistic view toward the beginning of 2012," says Bradley Holcomb, chair of ISM's Manufacturing Business Survey Committee.

Most economists expect continued growth in the U.S. economy and in manufacturing, but that growth is likely to be modest. The Manufacturers Alliance for Productivity and Innovation (MAPI) expects manufacturing production to increase 3% in 2012, outstripping U.S. GDP growth which MAPI predicts will be 2.1%. MAPI Chief Economist Daniel Meckstroth says, "Pent-up demand for postponed consumer durable goods continues to exist, particularly in motor vehicles. In addition, firms are profitable and have the need to spend more for both traditional and high-tech business equipment, and reasonably strong growth in emerging economies is still driving U.S. exports."

Barry Misthal, the global leader for PwC's Industrial Manufacturing Practice, also predicts slower growth for the U.S. economy. "My anticipation is we will see a continued slowdown in demand "both in the U.S. and globally, with a few bright spots," he says. "The bright spots are U.S. companies that are aligned to the energy sector, whether it is oil, gas, natural gas or shale gas extraction. U.S. manufacturers that have good exposure to the energy sector will still have very solid demand going into 2012."

Kuehl, who serves as economic analyst for the Fabricators & Manufacturers Association International, says attendees surveyed at the Fabtech show last November were clearly in the mood to buy new machinery. He says some company executives were saying they needed to replace old machines that were wearing out while others need new machines in order to enter new markets.

Source: Industry Week