The Leasing GroupThe Leasing Group
buisness advice

By The Leasing Group

Popping the Student Loan Bubble

I usually cringe when I read about Elizabeth Warren advising the Secretary of the Treasury, chairing a Presidential oversight committee or crafting legislation in the Senate.  As chief architect of the Consumer Financial Protection Board and its founding leader, she and the CFPB have harmed community banks, created mountains of bureaucratic red tape, hurt borrowers and done virtually nothing to protect consumers.

 

Now Warren is weighing in on the student loan problem.  On the surface, lowering interest rates and capping monthly payments sounds great.  No one, including me, wants graduates to be saddled with so much debt that they can’t start families, buy homes or create businesses.  But Warren’s proposals don’t address the root causes of this $1.2 trillion crisis.

 

The issue is directly linked to two very bad policies:

 

  1. Easy student access to credit without spending controls.  In other words, students are permitted to borrow for purposes beyond tuition, room and board.  Without controls, loans pay for night lives, smart phones, cars, sporting events and all sorts of non-educational endeavors.
  2. Little oversight of or limits to education cost increases.  Generally, public and private institutions alike do a poor job of controlling their costs.  They don’t have to as long as the government loan program will pay.  Additionally, “for-profits” schools routinely enrich themselves at student and tax payer expense receiving a disproportionately high number of loans coupled with high loan defaults.

 

Warren’s proposed solutions create more problems than they solve because they don’t address the real issues.  If we’re going to deal with our student debt problem, we must address the reasons for the problem, not simply lower payments on loans way too high in the first place.

 

 

Leasing Questions? (502) 456-2800

Business Leasing Application Online

More Experience, More Sources, More Approvals

business advice

By The Leasing Group

Boomerangs and Business

Have you ever thrown a boomerang, one of those funny shaped pieces of wood that promises to come right back?  I was eleven or twelve the first time I threw one.  My first toss looked more like a wounded duck than a graceful swan, crashing well before making its turn.  On that day I learned that boomerangs will not come back unless they are thrown exactly right.

 

Generosity is kind of like that.  Whether we give our time, talents or resources, generosity is best expressed without expectation of personal gain.  We should give for the right reasons, especially in business.  Here are three opportunities:

 

  1. Introduce a customer or associate to another customer or associate.  The connection might be magic for them.  Just don’t ask for even a hint of compensation in return.
  2. Give valuable advice in your area of expertise.  Share your knowledge with those who might benefit from it without secretly hoping you’ll get paid or make a sale.
  3. Serve on a non-profit board.  When you do, don’t show up to meetings to network in hopes of building relationships which might one day payoff.  You’re there to serve, so lose all selfish motivation.

 

We only experience the boomerang effect when our gifts are offered without any expectation of return benefit.  That’s when they surprise us and become something truly powerful.  That’s also when our generosity moves us away from lives of self absorption, creating space for heart and soul to flourish.

 

Leasing Questions? (502) 456-2800

Business Leasing Application Online

More Experience, More Sources, More Approvals

buisness advice louisville

By The Leasing Group

What We Learned Selling Lemonade

Do you remember when a paper boy really was a boy on a bike, not a person in a pickup or SUV?  In those days a kid also mowed his neighbor’s grass, sold homemade potholders door to door, and enticed passing cars with a hose and a sign reading: Wash and Wax – $1.00.  People should have paid attention to these young tycoons.  Today they run much of our commerce.

 

According to Venture Capital firm, Cue Ball, 65% of all new businesses are started by men and women who previously launched childhood entrepreneurial ventures.

 

Did the young CEO’s know they were learning about responsibility, integrity, discipline and customer service, as they pushed their mowers around the neighborhoods?  Were innovation, creativity and product quality top of mind when they wove their colorful potholders?  Did they realize they were actually learning valuable lessons that would shape their lives?

 

Many experts today profess to have proof of an “entrepreneurial gene,” convinced that newborn babies are hard-wired to start and run businesses.  Maybe so.  But I also suspect that a tiny seed is planted whenever a kid sets up a lemonade stand.  Whether successful or not, that kid’s seed grows from the experience.  Isn’t it just as likely that the so-called “entrepreneurial gene” is more environmental than it is random selection?

 

Leasing Questions? (502) 456-2800

Business Leasing Application Online

More Experience, More Sources, More Approvals

how to finish big in buisness

By The Leasing Group

What is Your Edge?

Check the Internet any day of the week and you’ll find no shortage of “experts” promoting easy paths to intelligent investing and wealth accumulation.

 

“Follow these seven strategies to achieve investing success.”

 

I’m always surprised by how simple they make it sound, because successful investing is neither simple nor easy.  Becoming a successful entrepreneur isn’t either.  Recently, I found the following list.  Although intended to help navigate the troubled waters of the stock market, this list also serves as a guide for entrepreneurial “wanna-bes.”

 

  1. Find an Edge
  2. Manage Risk
  3. Be Disciplined
  4. Stay Flexible

 

Find an Edge

No company will get far without a solid value proposition, be it price, location, service, experience, quality or whatever else drives its revenue.  Every entrepreneur must discover an edge.  What sets you apart from your competitors?  When you figure it out, go tell the world.

 

Manage Risk

We evaluate options and make decisions everyday, and options carry risk.  The trick is to manage the process.  Before going bankrupt, the Penn Central Railroad bet the company on the future of passenger trains.  That was a big risk.  Penn would have been better off hedging their bet with automobiles and airplanes.

 

Be Disciplined

Someone once told me that a good entrepreneur never does anything between 8:00 and 5:00 that can be done between 5:00 and 8:00.  In other words, working hours are made for selling.  Paperwork comes later.  That takes a lot of discipline.

 

Stay Flexible

Back in 2002, Apple was unprofitable.  Early internet flops tarnished its appeal, its retail stores were viewed as dumb ideas and music-playing iPods were seen, even by some Apple executives, as relatively insignificant.  Worse yet, the Macintosh wasn’t selling.  Thankfully, the company was flexible enough to innovate.  The rest is history.

 

Find a market advantage, manage your risks, be intentional and disciplined, while also flexible.  Maybe you’ll be an Apple too.

 

Leasing Questions? (502) 456-2800

Business Leasing Application Online

More Experience, More Sources, More Approvals

business leasing success approved

By The Leasing Group

“We’ve Got Cash to Lend”

We haven’t heard a banker say that in a while, at least not in the last five difficult years.  But that quote comes directly from a recent article in our local business newspaper.  The quoted banker was trying to make a point.  Once crushed by bad real estate loans, his bank has emerged stronger than ever with money available for lending, including loans to small and mid-sized businesses.

 

Public perception would tell you that banks are still reeling from the financial crisis; that bank examiners continue to place barriers between banks and their customers; that banks remain hunkered down for fear of making many of the same lending “mistakes” and getting penalized for risky underwriting.

 

In reality, we find this perception only partially true.  Yes, examiners are difficult, sometimes even unreasonable, and yes, there is still a fear of repeating questionable lending practices of the past.  But there is also a realization by bankers that loan growth must again lead them to profitability, only this time growth will extend beyond real estate lending to business equipment loans and leasing.  This is great news!  The path to loan diversification leads directly through small and mid-sized entrepreneurial companies.

 

As the economy continues to recover and business owners regain confidence, they will pull delayed growth plans from their shelves.  When they do, banks stand ready and willing to again loan idle funds.

 

In the future, we can expect more banks to scream “Come see us.  We’ve got cash to lend.”

 

Leasing Questions? (502) 456-2800

Business Leasing Application Online

More Experience, More Sources, More Approvals

small business advice

By The Leasing Group

“Character Doesn’t Matter Anymore”

Really!  I was surprised to hear this from my banker friend, but he seemed so certain.

 

He went on…

I’m serious.  Today’s bank examiners don’t have much interest in a borrower’s character.  They only focus on the numbers.  Look, I’ve been a community banker for over thirty years.  I know my customers.  I know their families, their birthdays, their golf handicaps, if they honor their commitments, their favorite restaurants, even where they go to church.  Most of them have never missed a loan payment, even in bad times.”

 

I was immediately reminded of the “Five C’s” every bank lender learns in his or her first week of training.  Capacity, collateral, conditions, capital, and of course…character.

 

Capacity is a measure of the borrower’s ability to take on additional debt.  Collateral represents the assets used to secure the debt.  Conditions are the loan terms, such as interest rate and repayment schedule.  Capital is the money provided by the borrower; sometimes known as the down payment.  All four of these “C’s” are very easily quantified.

 

Character, is different.  Measuring character is like trying to nail Jello to a wall.  It’s hard to do.  Character refers to a borrower’s reputation.  Honesty, reliability, integrity, and responsibility aren’t found anywhere on a balance sheet or income statement, but they’re just as real.

 

Maybe those who make today’s rules should first spend time behind the lending desk.   They might learn that a borrower’s character is more important than ever.

 

Four C’s are okay, but Five C’s are better.

 

best business funding leasing

By The Leasing Group

#1 Best Idea for Business Expansion

#1 Best Idea:   Allow businesses an option to write-off 100% of the cost of new equipment purchases in the year of purchase.  Good idea, right?

 

Oops, we had that already.  It was known as IRS depreciation “Section 179” and allowed a 2013 deduction up to $500,000 plus a 50% bonus depreciation on purchases over $500,000.

 

What an incredible windfall! 

 

Unfortunately this super generous tax code provision all but expired completely on December 31st last year.  Party over!  It died without as much as a whimper.  The new limit is now only $25,000, a paltry sum by any standard and hardly worth mentioning.  Bonus depreciation is gone too.

 

So what’s a business to do?  Gifts from the IRS don’t come around that often.  Sometimes we appreciate them most after they’re gone.

 

Leasing to the rescue! 

 

Businesses can still deduct 100% of their leased equipment over the lease term, provided they request a “true lease.”  Yes, it’s true, even when leases are capitalized for book accounting purposes (and most are), they can still be 100% tax deductable

 

Who stands to benefit most?  Profitable proprietorships, partnerships, sub S companies and LLC’s, where taxable profits flow through to individual owners in high tax brackets. 

 

Don’t delay…this popular tax break might expire soon too! 

 

Leasing Questions? (502) 456-2800

Business Leasing Application Online

More Experience, More Sources, More Approvals

By The Leasing Group

Five Questions before you Quit Your Day Job

Thinking of launching a new business?  Better first ask yourself these five questions:

 

  1. You’re in an elevator with a total stranger.  The stranger asks you about your business idea.  Can you explain what you sell, who you sell to and why they buy from you, before the elevator stops at the next floor?  You have just twenty seconds.  A short, crisp, understandable message is your first step to success. 

 

  1. You love good food and you love to eat it, so you decide to open a restaurant.  Do you also love working in the kitchen, managing difficult people, and paying attention to every detail from perfectly bleached table cloths to perfectly seasoned quiche?  When your strengths align with your interests and passions, anything is possible.     

 

  1. You’re willing to work hard.  You consider yourself a high achiever and top employee.  Can you also get up and go when no one requires you to get up and go, stay focused on the vision when no one else sees it, and refuse to quit when you are obviously failing?  Unrelenting determination is your best friend.

 

  1. You easily sailed through high school with above average grades and numerous compliments from admiring friends and teachers.  Did you also excel in sports, serve on the student council, play first chair violin, captain the debate team, or run a successful mowing business after school while delivering newspapers in the mornings?  A history of personal achievement will bolster your confidence at just the right times. 

 

  1. You are recognized as one who quickly digests complex ideas, communicates them effectively, understands how they apply and turns them into productive action.  Are you also driven to continuously set new goals, rarely satisfied with the status quo and always searching for the next learning opportunity ahead?  Humble curiosity coupled with 20/20 vision might just give you the edge to succeed.

 

 

By The Leasing Group

Cultivating Mutual Trust

The typical lease agreement is six pages long, laced with legal terms and conditions spelling out the obligations of each party! This document is the product of a team of lawyers determined to disclose every suffocating detail.  Like so many legal contracts, a lease is best read late at night by those in search of sleep.   

 

Our lease is no exception.  It is well-crafted, specific and thorough, as it should be.  But, in spite of its importance, I can’t remember more than a handful of clients having ever read it. 

 

Do our clients lack the qualifications to read and ask clarifying questions?  Do they lack the time and energy to study our lease before they sign?  Are they intimidated by the legal detail?  With so much at stake, wouldn’t it make sense to have an attorney review every paragraph?  Instead, our clients typically flip through the pages in a matter of seconds, and then ask…“Is there anything in here I need to worry about?” 

 

Here is why:

 

  • Our clients know we will honor the terms we agreed to verbally.

 

  • Our clients know we will not add hidden fees and charges that change the economics of the transaction.

 

  • Our clients know we will not place liens or encumbrances on unrelated business assets.

 

  • Our clients know our early buyout provisions are fair and without penalty.

 

Trust takes time and effort to build over years of doing what we say we will do.  In the short term building trust can be costly.  But, long term nothing matters more.   Trust strengthens every relationship, while reducing the time and energy spent on doubt, fear and suspicion.  Cultivating mutual trust is the only way to do business. 

By The Leasing Group

“Know it alls” Not Wanted Here

Jack Welch retired as General Electric’s Chairman and CEO in 2001 after a twenty year run, over which GE enjoyed unparalleled profitability and diversified growth.  During his tenure Welch was notoriously known for pruning the company of 10% of its lowest performing managers each year.  Investors and peers alike considered his bold honesty and decisive courage his greatest leadership qualities. 

Today Welch continues to write, teach and advise managers on the subject of leadership.  Below are the most destructive qualities he finds in POOR leaders: 

  1. A “know it all” attitude coupled with failure to listen to other points of view.
  2. Distant and detached behavior, often remote and un-engaging.
  3. Insensitive, hurtful and bullying comments directed to subordinates.
  4. A reluctance to make difficult decisions for fear of making mistakes.

On the flipside, Welch points to the shared traits of SUCCESSFUL leaders, qualities worth learning.  This list includes good listening skills, sensitivity, personal engagement, courage without arrogance and continuous self awareness. 

I’ve never seen or heard Welch include an Ivy League education, a high IQ, charismatic speaking ability, uncompromising personal ambition, overflowing self-confidence, or a blue-blood pedigree?  These qualities seem conspicuous by their absence.

1 2 3 4 5 6
buisness advice
Popping the Student Loan Bubble
business advice
Boomerangs and Business
buisness advice louisville
What We Learned Selling Lemonade
how to finish big in buisness
What is Your Edge?
business leasing success approved
“We’ve Got Cash to Lend”
small business advice
“Character Doesn’t Matter Anymore”
best business funding leasing
#1 Best Idea for Business Expansion