Are you worried?

I had an opportunity to talk with a friend today that I havent spoken with for some time. Getting passed the usual questions about how are you and the family etc he asked what I did. “I sell leasing!” I replied.

You would have to have your head under a rock for the past several months not to realize our economy is going through some “interesting times” as the old saying goes. Especially in this industry.

I started working for a leasing company back in November of 2006. It was a smaller outfit, just getting started in the equipment leasing industry as a funder. They hired an aggressive sales staff (yours truly included) and we made our way out into the field…feet in the street. For a few months things were going quite well. New vendors were being signed up and deals were getting booked. The company was beginning to grow in leaps and bounds as the staff total ballooned from 10 core employees to close to 30 in a short time.

Then the brakes hit. Back in August as many avid readers of the financial newspapers know, the asset backed commercial paper industry took a nose dive into the sewers. Strong companies like Coventree took a huge hit and their stock price plummeted from a 52 week high of $ 16.30 to currently $ 2.50 per share.

Funding lines dried up faster than a glass of water in the desert and we were left with nothing really. The company tried its best over the coming months to secure some more funding, all the while selling off leases to other companies to make sure the lights stayed on. Needless to say, it didnt work and this young upstart of a company closed its doors officially in January of this year. Many of the staff have found other jobs, mainly in the leasing industry and we still keep in touch.

One of the things ive been asked is, why stay in it. Asset backed commercial paper still is in flux and other financial institutions are going through some massive changes. Recently GE purchased several divisions of Citifinancial and even one of the biggy’s in the industry CIT has now drained its $7.3 billion credit line. Why stay in it?

From a business sense, the leasing industry is going to go though more ups and downs over the next year or so but I think it offers up an opportunity for growth. With many of our current and potential customers trying to make plans over this tumultuous period of time, conserving cash will be paramount. Many people feel that during a recession (yes the ugly dreaded R word) is the perfect time for expansion and growth. While others close up their doors or scale back what they do in their business, others can reach out to grab more market share. To do this you can do a few things. Tap into your reserves and make acquisitions. But with uncertainty in our economy, do you really want to drain your savings in the hope something might work out? Other options include going to your bank to extend or use your credit lines.

This can be a lengthly process and with the tightening of the money supply by many of the big financial institutions, it will be a tall order to get more credit from your banks. Many of the major banks in Canada have been hit, whalopped, or just smacked around by the sub prime credit mess in the US and will be a little apprehensive to increase the credit lines of companies.

Leasing looks to be a very viable option for many companies looking to expand, get more equipment and prepare to take more market share. Now depending on what your product is, leasing might not be the right thing for you. If you sell individual widgets it wont be the right course of action to offer leasing to your customers to help you sell. If youre a company whos looking to increase the amount of equipment used to produce your widgets, then this can be looked at.

If youre a company looking to offer their customers another option to purchase your equipment, than leasing is something that you need to look at. The benefits to customers are great as they can acquire your equipment, conserve their capital and improve their cash flow. Payments are fixed over a period of time so you can properly budget out payments and also potentially take advantage of some tax benefits that come with leasing.

A company properly positioned in this “interesting” market can take advantage of these opportunities and thats why I think theres definitely room for growth. Thats why I guess I stay in the leasing business.

Needless to say the few months are going to be “interesting” to say the least but it keeps you on your toes. No one can say for certain whats going to happen with the asset backed commercial paper market in the next 6 months. More companies can fall, more can be sold and many more will be in limbo. Theres the impending real estate bubble burst in real estate that might throw a monkey wrench into the mix. Some out there are talking about impeding doom in that market, some others are taking a wait and see.

Theres just so much going on in the financial industry, how CAN you leave? Its fun when the market stumbles a bit. Thats it, Im done. My “leasing commercial” is done. In case you need to know more, you can check out HERE for more information.

Mayor Smitherman?

The buzz in the City of Toronto is that Ontario Health Minister George Smitherman is contemplating a run at the City’s top job. In a recent speech at the Toronto Board of Trade, many people who were there and heard the speech feel hes either testing the waters for a mayoral run or has already decided he will.

Also, in a recent interview on CFRB Toronto Councillor Rob Ford spoke with Leslie Roberts saying that once he settles his “personal issues” he will definitely be running against Mayor David Miller. In a survey of CFRB callers before Rob Ford came on, there was strong support for Rob to run.

You can tell things are getting antsy in the City of Toronto when more than 2 years before the next municipal election you are seeing high profile candidates preparing for a run at the top job.

I know the City of Toronto is a bigger place with a lot more on the line as it seems than lets say the Town of Milton. But what would your reaction be if one of the sitting councillors here said, “Oh ya, Im going to run for Mayor of Milton.” Thats 2 years away. I think theres a few issues that need some immediate attention other than ones political career…especially in Toronto.

To be honest I think Mr Smitherman should be working on his governments promises of reducing wait times in our emergency rooms and improving our health care system. And not just in the City of Toronto. The province is grossly understaffed in doctors and nurses and the ones we have now are being stretched to the limit. In the coming years, Ontario will see more doctors and nurses retire than anytime in history, while the number of people entering the field wont be enough to cover the short fall. This means family doctors will be harder to find, emergency rooms will be like madhouses, people wont have places to go to get regular checkups, families that have children with autism will continue to lag on the waiting lists for much needed funding and too many more issues to mention here.

Many people who frequent Milton hospital are running into some issues. Milton’s population is now over 70,000 and in a short time will be getting close to 100,000. One major thing thats been ignored over these years? The roads? Yes. But just as important if not MORE important…The hospital.

And to be clear, people have to realize (before the start blaming the town, which is a sport it seems here) that funding for the hospital comes from the province. There are some drastic needs that our hospital faces in the coming years. It needs to expand…now.

The same kind of problems was faced in Brampton. For years, Peel Memorial (then called William Osler Health Centre) was the only hospital in town. One hospital for almost 400,000 people. It only took about 10-15 years to get another health care facility opened in Brampton and recently Peel Memorial has closed down, creating a huge vacuum of need there.

Milton Hospital, if not addressed soon…can be headed the same way. Recent estimations of Milton’s future population growth see it reaching 170,000 and maybe even more in the next 20 years. We could be facing the same issues Brampton has if we dont do something about it now. This province needs a full time health care minister and not a part time mayoral candidate. With this speech and others like it to come, Smitherman will be dogged by the media to find out when hes going to be running, if hes going to be running, what will his platform be, etc all the while the hospitals go unchecked.

On the other hand, the hospital is making the improvements it can, especially with the CT scanner and the fund raising involved in it. Through the generosity of many Milton residents and businesses, Milton hospital now has the CT scanner up and running.

The importance of this issue just isnt prevalent in adults and corporations. Recently a friend of my son Anthony had a birthday party and included in his invitation was a request. In lieu of presents he would like the guests to his party to make a donation to the CT scanner in Milton hospital. Through a small group of kids, they raised $250 and he personally delivered it to the hospital.

Too bad it seems that the provincial government doesnt show the same concern to our hospital as does this 8 year old and his friends. Smitherman has time after time made claims that they are fixing the problems in our hospitals, all the while people are stuck in the waiting room looking for care.

I know in some cases, there are people who really shouldnt be in our emergency rooms and going to either a walk in clinic or their family doctor would be more productive and less of a strain on our emergency room staff. There are legitimate cases where care is needed NOW, but they are forced to either wait, suffer or try to find another hospital that can take them.

The fact that Smitherman, a full 31 months before the next election, is “shaking the bushes” shows his concerns lie somewhere else and not in Ontario’s health care system. If being Mayor George is important to him, maybe he should call Dalton and ask that he be replaced in the health care file so that someone who isnt worrying about his next political step can take charge and make real changes to hospitals and health care in our province.

Step aside George.