“It's the things you learn after you know it all that count”  
- John Wooden (October 14 th 1910 – June 4 th 2010)

In our daily conversations with business owners and corporate executives we are constantly being told that business is getting much better and there is a general acknowledgment that the economy is getting stronger.  However, many in the business world are trying to reserve judgment as they are unclear on exactly how strong the forward momentum is.  First Star can directly attest to this dynamic.  Our volume of incoming applications / funding requests has tripled since February.  We have seen a significant increase in demand for equipment financing over the last several months.  In fact, we exceeded the highest monthly application volume in April that we have ever received in our ten year history.  The previous record was set in 10/02', again coming out of a recession (albeit a much shallower and shorter one than the Great Recession that we have just come out of).

The Federal Reserve (in the most recently published Beige Book from June 9 th which reflects information collected on or before May 28 th ) stated that the US economy strengthened in all of the Central Bank's regions in April and May.  This is the first time all 12 districts demonstrated strengthening since 2007, before the subprime mortgage crisis and the ensuing recession.  Although this is the case, it was noted that growth in several districts was subdued and that the pace of the recovery is varying from robust to modest in different geographies.  This is a significant turnaround though, especially when compared to the 4 th quarter of 2008 when all 12 districts showed economic contraction.  There is no question that the American economy has come a long ways in the past 18 months.  This economic data surely influenced the Fed policy makers in their decision to raise their growth estimates for the year.  Mr. Bernanke himself stated “the economy will continue to improve because it has already transitioned into something more sustainable.”

Although most business owners are encouraged that our national economy is getting back in gear, many state that economic improvement has been marginal at best which tempers their optimism.  Regardless of the school of thought to which you subscribe, there is no doubt that the outlook today is more encouraging than it has been in roughly 18 – 24 months.  Many businesses put off equipment purchases / replacements during the recession but the tide is turning and companies are now stepping up their spending.  According to the Commerce Department, orders for capital goods (excluding aircraft and military equipment) have risen by 4.5% this year.  First Star Capital is obviously involved in only a tiny sliver of these Commerce Department statistics but our trends with respect to new financing requests substantiate this turning of the tide.

Even with unemployment still stubbornly high, productivity continues to increase substantially.  Companies of all sizes have become leaner and meaner which isn't necessarily a bad thing.  It has taken an incredible level of discipline, focus, and determination, not to mention an extraordinary effort to weather the economic headwinds of our recent past.  Now that the worst of the turmoil is history there is solace for many in knowing that the Federal Reserve data points toward a moderate pace for the current recovery – somewhere between the U and V shapes of the past.  Small and medium sized businesses collectively increasing efficiencies, effectiveness, and productivity will put our country on a more stable path for growth.

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?

95% of all the dollar bills printed each year are used to replace notes already in circulation

48% of the notes printed are $1 notes

The Bureau of Engraving and Printing produces 38 million notes per day with a face value of approximately $541 million

If you had 10 billion $1 notes and spent one every second of every day, it would require 317 years for you to go broke

During Fiscal Year 1995, it cost approximately 4 cents pert note to produce $9.7 billion U.S. paper currency notes 

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