BROKERING TRANSACTIONS

This outline was used in a presentation to the attendees at the Amembal & Halladay Small Ticket Conference in New York City on June 22, 1995 by Mark S. Bazrod.

1. What is the role of the broker in a changing leasing industry?

  1. Greater leasing company concentration
  2. More bank activity
  3. Larger leasing companies
  4. Effect of leasing company downsizing and re-engineering
2. Checking out broker fit with leasing company
  1. Years in leasing business
  2. Who worked for in leasing business
  3. Average transaction size
  4. Average lessee characteristics
  5. Vertical market specialization
  6. How acquire business
3. Checking out broker qualifications
  1. Years in leasing business
  2. Bank references
  3. Leasing company references
  4. D&B credit check
  5. Individual credit check
  6. Lessee reference
4. Leasing company issues:
  1. Agreement with broker
    • In general
    • Period of agreement
    • Territory allocation or priority issues
    • Which broker gets the deal
    • Protection of broker/customer relationship for what period of time
    • Broker warranties
    • Value of broker warranties

  2. Compensation
    • Upfront commissions
    • Delayed payment of commissions contingent upon ?
    • Commissions on residuals
    • Commissions on subsequent deals

  3. Lease Rates
    • Fixed rates to customers or a rate to broker who can add on whatever he can
    • Commitment fees

  4. Lessee control issues
    • Whose documents?
    • Discussions of documents with lessee
    • Billing
    • Collecting
    • Subsequent contact with customer

  5. Lessee checks
    • Credit information
    • Who sends in documents
    • Verification of customer acceptance
5. Performance Measurements
  1. Do you set minimum annual volume requirements?

  2. What should be measured?
    • Volume
    • Gross margin
    • Deals submitted - number and dollar
    • Deals approved - number and dollar
    • Number of lessees
    • Hassle quotient
6. Experience with Brokers
  1. Very variable
7. What does a broker look for in a leasing company?
  1. Responsiveness
  2. Clear criteria
  3. Financial Strength
  4. Recognition of broker role
  5. Fair commission arrangement
  6. Flexibility

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                         February 27, 2006