"The measure of success is not whether you have
a tough problem to deal with, but whether it’s
the same problem you had last year."
- John Foster Dulles, U.S. Secretary of State 1953 - 1959

The first quarter of the New Year is nearly complete and the proverbial green shoots continue to show themselves.  Although the economy is showing clear signs of recovery, the banking sector may not fully recover to pre-recessionary levels anytime soon.  It’s possible that the continued problems in the banking industry will substantially outlast the recession, resulting in a significantly suppressed availability of credit in a recovering economy.

I recently attended an Economic Forecast featuring Dr. Robert T. Parry, the previous President and CEO of the San Francisco Federal Reserve Bank.  Here are a few highlights from Dr. Parry’s presentation:

• The US Economy technically ended the great recession in July or August of 2009
• The GDP increased by an impressive rate of 5.7% in the 4th quarter of 2009
• Dr. Parry is expecting the US economy to continue to improve at the rate of 2% - 3% during 2010
• Unemployment will remain stubbornly high through 2010
• Business conditions will continue to improve, but at a much slower pace than we would like to see

Many of us in attendance commented on the recession obsession that seems to be prevalent in the media and the need to divorce ourselves from this mentality in order to collectively increase our economic forward momentum.  Most people agree that history offers valuable lessons and nobody should discount the validity or relevance of our recent experiences.  However, if our thoughts are focused on the past and what has already happened then we are invariably handicapping our ability to look forward and focus on opportunities that are taking shape and going to become available. 

Over the last several months, First Star has been very encouraged by the trends in our portfolio of outstanding leases and loans as well as the amount of application activity in terms of new requests for equipment financing.  Small and medium sized businesses have largely stabilized and have clearly begun to enter the next phase of the economic cycle – an upward phase.  We have been continually approving and funding equipment financing requests that are thorough and compelling.  In last month's Newsletter we touched on the stricter credit granting guidelines that are in place and what it takes to receive an approval in today’s lending environment.  This message was well received and can be accessed in our newsletter archives. 

First Star is a healthy independent commercial lender and we are actively funding equipment acquisitions for small to medium sized companies in all 50 states.  Because equipment leases provide some of the most flexible commercial financing terms available today many financial experts agree that equipment finance firms will spark the commercial lending turnaround in 2010 and beyond.  Due to increasing demand and the positive trends that we expect to continue to experience this year we have added two more National Account Managers to our team.  Tom Serio and David Allen are both established industry veterans that bring a wealth of experience and bright eyed optimism to First Star Capital.

About First Star Capital

First Star Capital is an established national firm that has financed thousands of different businesses across the country and has funded hundreds of millions of dollars worth of capital equipment. We are an independent commercial lender with a specialty focus in equipment financing and leasing. First Star Capital is a direct lender with the ability to quickly and efficiently fund new financing requests between ten-thousand and ten-million dollars. Since we are a direct lender with our own funding and servicing capabilities we are able to deliver tangible value added financing solutions with the utmost flexibility. First Star Capital has the internal ability to underwrite a variety of different financing requests – nothing is too big or too complicated.

Brad Harmon

(800) 604-4817

Brad@FirstStarCapital.com

www.FirstStarCapital.com

Did You Know?

The annual equipment lease volume in the US is $186 billion

Equipment leases + term loans account for $285 billion annually in the US

Companies in business for 10+ years account for the majority of equipment finance fundings (not approval requests but actual fundings).

The top 3 motivating / decision making factors for financing / leasing equipment are:  #1 – cash flow optimization, #2 – tax advantages, #3 – avoid obsolescence.  

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February 2010
January 2010
December 2009
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