Large American Coal Producer seeks out Mazuma Capital in Funding Fuel-Efficient Equipment to Enhance Production

DRAPER, UTAH April 2012–Mazuma Capital, leading national direct lender, today announced it has funded $7.5M so far against an overall $9.4M commitment for a large American coal producer.

The coal producer sought an experienced funding source with in-depth knowledge of the mining industry. There were many challenges present in the transaction from the type, use, and locations of equipment to the challenges present with an evolving global coal market.  There were also several factors that presented additional hurdles with the credit due to recent growth and acquisitions.  Because of these challenges the financing required innovative structuring components along with solving the coal producer’s funding objectives.

The company was concerned that the cash flow of the leases needed to allow for growth initiatives and to provide the ability to expense payments over time as new environmental campaigns were launched. Moreover, Mazuma Capital was able to secure the approvals and work with the company to achieve these funding objectives.

“This coal producer has a very large footprint in the mining industry and they continue to draw upon Mazuma Capital’s unique market positions and access to funds to propel their business forward. Through our exclusive access to capital, and aggressive structures we’ve been able to provide significant value year after year for this company”, said Kelly Holladay, Account Executive at 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

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Benefits of Technology Financing

The Equipment Leasing and Finance Association (ELFA) estimates that eight out of ten U.S. companies lease at least some equipment, but what many people don’t realize is that there are flexible financing options available for almost any kind of technology equipment, including software, services and training.

Equipment financing is a popular way to maximize your purchasing power largely because it is a cost-effective way to obtain the newest equipment without a large outlay of cash.

Financing also helps shield you from the effect of equipment obsolescence, a real issue for all those using any type of technology asset. It’s easy to add the latest software version to your master lease so you don’t have to worry about working with outdated technology.

Some of the recognized benefits of financing technology equipment include:

• Reduced Tax Burden - The IRS does not consider certain leases, for example, to be a purchase, but rather a tax-deductible overhead expense. Therefore, you may be able to deduct the lease payments from your corporate income.

• 100 percent financing – Some financing options require very little money down - perhaps only the first and last month's payment are due at the time of the acquisition.

• Immediate write-off of the dollars spent - With some financing options, payments can be treated as expenses on a company income statement, so equipment does not have to be depreciated over the useful life of the equipment.

• Flexibility - As your business grows and your needs change, flexible financing options provide more opportunities for businesses to add or upgrade equipment during the lease term.

• Asset management – Financing provides the use of technology equipment for specific periods of time at fixed payments. With some financing structures, the finance company assumes and manages the obsolescence risk of equipment ownership. At the end of the finance terms, the financing company is responsible for the disposition of the asset.

• Upgraded technology – Equipment that is frequently updated, such as software, should be financed to limit your risk of being stuck with obsolete equipment. It’s easy to add the latest software version to your master lease, for example, so you don’t have to worry about working with outdated technology.

• Improved cash flow – Many finance structures can result in a lower monthly payment when compared to a standard loan. In addition, some finance companies offer seasonally adjusted payments to match a company’s needs.

Finance Services Too

Training, support and other services are vitally important to a successful technology implementation, yet they are some of the most overlooked costs involved with a technology acquisition.

Often, everything involved in a technology purchase, from the software to the services and training can be bundled into one predictable monthly lease payment, making it easy to budget for all costs associated with a technology acquisition.

S & P Forecasts by Industry

Boosted largely by much stronger economic trends in emerging markets, and moderate gains in the U.S. economy, many parts of the Industrials sector started to recover in 2010, according to analysts at Standard & Poor's Equity Research.

"Operating results were also greatly assisted by aggressive streamlining programs implemented by companies over the course of the severe economic downturn that started in late 2007," said Michael Jaffe, Industrials Group Head at S&P Equity Research. "We expect these trends to continue in 2011, for the most part."

The projections by S&P's Industrials equity analysts for 2011 are as follows:

1. We expect increased global industrial activity to drive higher shipping demand at Logistics companies, with the most robust performances likely in air and ocean freight. We also see this improved demand allowing rate increases to be more fully absorbed than they have been in recent years. We believe that FedEx (NYSE: FDX 93 *****) is well positioned to benefit from these expected trends.

2. We see a favorable demand outlook causing airlines to become more aggressive in increasing capacity. We believe that will drive significant production increases at Boeing (NYSE: BA 69 ****) and Airbus, but are concerned that too many seats might become available. We view AMR Corp. (NYSE: AMR 8 ***) as an airline that could be hurt considerably if excess capacity were to occur.

3. We do not expect any other major U.S. airline mergers, since we believe there are few remaining suitable partners.

4. We expect aftermarket growth (about 5% to 7%) to return in commercial aerospace markets in 2011, following essentially flat results in 2010, as we see more profitable airlines beginning to spend more freely on maintenance, repair and overhaul. A company that we see greatly benefiting from any upturn in aftermarket spending is Precision Castparts (NYSE: PCP 143 *****).

5. We forecast ongoing rises in capacity utilization across the trucking industry, as volumes have started to increase modestly, and a number of financially weak carriers (mostly small private carriers) have shut down. With the North American Class 8 heavy truck fleet at its oldest average age (6.7 years) in the 31 years of data available through ACT Research, an independent commercial vehicle research organization, we expect the recent upturn in truck sales (off of a very low base) to strengthen further in 2011. We believe that engine maker Cummins (NYSE: CMI 110 *****) will be greatly boosted by this expected rebound in heavy trucks markets.

6. We think Industrials companies will further expand their footprints in emerging markets. We think the most aggressive expansion will take place in areas such as Construction Equipment, Industrial Machinery, and Engineering & Construction, which will likely continue to be boosted by infrastructure development and improvement in emerging markets, and the industrialization of economies. One company that has been putting significant focus on its emerging market footprint is Caterpillar (NYSE: CAT 94 ****).

7. We expect business to revive further at Human Resources and Employment Services companies. Although we believe that the level of new hires will remain modest in coming periods in U.S. markets, we still think that relatively stripped down businesses will need to add to their staffs as demand for products and services starts to improve somewhat. With businesses likely to maintain cautious operating stances, we think they will continue to focus on hiring temporary workers, an area dominated by placement companies. We also think that labor trends in emerging markets will remain much stronger than those in Western economies. We think that Kelly Services (NNM: KELYA 20 *****) will be boosted by its concentration on non-professional temporary placements, and its presence in foreign markets.

8. We believe that Agricultural Equipment companies will continue to post sales and profit gains, as the big rise seen in crop prices in the summer of 2010 should cause farmers to lift their business spending. In line with this forecast, we believe that Deere (NYSE: DE 84 ****) will experience solid demand for its farm equipment. However, we also believe that investors should keep in mind that part of the rise in crop prices was transient in nature, as droughts and fires in Russia led to lower than expected global wheat and corn supplies.

9. Following a dearth of acquisitions in 2009 and a pickup in 2010, we believe that Industrial Machinery companies will increase the pace of acquisitions in 2011. We think that a rising stock market and greater availability of debt financing will make funds more readily available to fund the potential takeovers. We also note that a number of companies, such as Illinois Tool Works and Dover Corp have indicated that the pipeline of potential deals has been increasing.

10. We expect trends to soften in Defense markets, as the President's current review of Afghanistan may lead to a July 2011 start date for troop withdrawal, and the U.S. continues to withdraw troops from Iraq. In addition, a five-year, $100 billion Pentagon overhead cost reduction, mandated by Secretary of Defense Gates, seems unlikely to be reinvested in weapons programs (as originally intended), in our view. We think L-3 Communications Holdings (NYSE: LLL 74 ***), whose products are being used in current war efforts, will be limited by these expected changes in U.S. military activities.

Tuesday, January 11, 2011

Source Monitor Daily

http://www.monitordaily.com/app_enews/news.asp?news_ID=27182

Finding "Real" Value

With the economy up in the air and the unknown looming upon the leasing industry, we have seen many leasing companies, brokers and funding sources rise and fall throughout the past few years. Most originators, who have found success over the last few years and more specifically over the past year, have gravitated to a specific niche or limited their efforts to a few industries. Vendors and end-users want to conduct business with financial partners who understand their specific industries, their specific challenges, and are able to speak their language. Brokers who try to be all things to all potential customers become experts in nothing and spend more time chasing miss-matched transactions than they spend funding transactions which are properly aligned with their capabilities. Originators who are focused are able to provide greater value to their stakeholders and are able to increase their personal incomes more quickly. There are no better or worse industries to focus one’s energies, the important factors are to choose an industry which you have an interest in, which you can develop funding capabilities and an industry which you have a passion to penetrate on multiple levels.
“Real” value is derived from knowledge and an originator’s ability to transform knowledge into quantified results. Every broker’s primary function is to prospect and to deliver superior services to his/her stakeholders. Superior service cannot be delivered unless the originator has knowledge which is otherwise in limited supply. Therefore, it must be an ongoing process to improve your knowledge in relationship to every aspect of the leasing/financing process. Some of the greatest attractions for entrepreneurs to enter our industry are the dynamics, the flexibility, and the creativity of our business. Along with these factors comes the responsibility of originators to embrace change; to be pro-active in innovating and providing new solutions to new challenges. The strongest brokers embrace a higher level of knowledge; they no longer chase transactions with the lowest common denominators, but are able to attract stronger vendors, stronger funders and stronger credit clients because of their ability to add “real” value to every transaction.
The future is bright for the best brokers and originators. The market craves expertise, knowledge and value-added services. Funders, vendors and end-users need our services now more than ever. Success will not be delivered to those originators who are not pro-active. However, for those originators who are willing to deliver superior service and are willing to aggressively pursue new relationships by providing “real” value, 2011 will provide an abundance of new opportunities.

Mazuma Capital  is committed to our client's success.  Our unique capabilities and innovative product offerings provide solutions accelerating financial growth.  Servicing rising companies, established companies, brokers and vendors, Mazuma continues to secure its position as the middle-market industry leader.

Source: World Leasing News

BANKS IN NEED OF REFORM-

Economists are concerned that recent reform will not be enough to prevent the need for more bailouts.  In recent months, regulators around the world have taken steps to ensure that banks will be able to weather tough times. New international rules will require big global banks to hold more equity to protect their depositors and other creditors. In the U.S., lawmakers have adopted measures intended to mitigate risk at big banks and keep close tabs on potential threats throughout the financial system.

Over the past few days, though, economists here offered many reasons why the recent banking reforms fall short. Among their concerns: The new capital requirements aren't tough or simple enough, there is too much uncertainty about how governments will deal with distress at the biggest lenders. It seems that there has been little done to prevent the kind of crisis that could occur if trouble broke out at many smaller institutions, such as hedge funds.

Recent history suggests that a capital requirement of 7% won't be enough to fend off bailouts. Many banks that required government support during the latest crisis, including the Citigroup and Royal Bank of Scotland, whom both had capital levels exceeding 7% just before trouble hit in the third quarter of 2007.

Another issue is banks' excessive reliance on short-term borrowing to finance their activities. Tougher rules could push more financial activity away from banks into other areas that don't face the same regulations. The so-called shadow banking sector, which includes everything from hedge funds to derivative markets, already plays a larger role in credit markets than traditional banking.

New financial rules in the U.S. provide regulators with more power to oversee the shadow banking sector, and shed light on it by creating incentives to shift more derivatives trades into places where they can be monitored. But regulators have yet to work out exactly how they will identify dangerous situations in which many players have become exposed to similar risks.

*The capital equipment leasing sector offers attractive alternatives for those seeking finance options.  With tax incentives still available and many options to fit the financial goals of customers, leasing is something that is worth looking into for businesses of all sizes.  The economy has not been kind to businesses over the past few years.  There are many once profitable companies who are finding it harder and harder to secure financing, and banks can't look at the external factors that have left a mark on businesses. When seeking financing for new/used equipment many businesses look to Mazuma Capital.  A lease originator, Mazuma Capital is a funding source that works for businesses, promotes growth and profitability.

US businesses push back on lease accounting change

Here at Mazuma Capital Corp we have been talking a lot about the new lease accounting changes scheduled to be put into effect in 2011.  As a lease originator the big question is how detrimental will this change be on an already wounded economy and struggling industry?  Changes to off balance sheet accounting have been a topic of discussion for quite sometime, but many feel this is the wrong time to implement. The change could ultimately triple debt limits in loan agreements for some companies.

We hear that things are looking up and companies are beginning to hire, yet those in the trenches feel otherwise.  So what will happen to all of the U.S. businesses who currently have significant leases off the books? Is it a possibility for profitable companies to tank overnight due to this change?

It seems that business groups are gearing up to delay proposed accounting rules that would bring hundreds of billions of dollars in leases onto corporate balance sheets, even as backers say the revisions will give investors crucial information. Many companies - with the help of the leasing industry - have avoided putting leases on the books by structuring them to fall below the 90 percent threshold. Such leases are considered operating leases and only require a rental expense on the income statement.

At issue are rules proposed by U.S. and international standard setters. The changes are meant to address complaints that investors are not getting a complete picture of companies' debt because massive lease obligations are relegated to footnotes in financial statements. The changes could cause companies to avoid leases entirely.  The changes will be more complex, forcing many businesses to do things that hinder growth and development.

The lease accounting changes will take a few years to fully take effect, but there will be causalities. What will this mean for the leasing industry that have assisted in growth and profitability for U.S. businesses? The S & P reports that there is at least $549 Billion in lease liabilities lurking off balance sheets. That's $549 Billion that will be off the books one day and on the books the next day.  Here is a little information on what we can expect from businesses that currently use leases from Delta Airlines to McDonald’s.

Financial statements would change significantly at airlines, which lease many of their aircraft rather than owning them. Delta Air Lines, which had about $17 billion in long-term debt at year-end 2009, would see that number jump by roughly $8 billion.

McDonald's Corp, which leases about 14,000 restaurant locations and is a lessor for another 19,000, may have to spend as much as $100 million because of technology and staff resources required for the accounting change, the company said in a letter to rule-makers last month.

The new standards are a joint project of the Financial Accounting Standards Board, which sets U.S. accounting rules, and the International Accounting Standards Board, which sets international standards. The boards are holding public meetings through Jan. 6 before crafting a final rule.

Sources:

S& P

Reuters Business