Leasing Co-Op---A First

 

Perhaps the first leasing co-operative has been proposed, which will change

the leasing industry as we know it.  It may alter all the non-profit leasing

associations and the way business is being done in the equipment leasing industry.

 

American Leasing Alliance and MainStreet Cooperative Group announced plans

to launch a nationwide cooperative owned by independent equipment lease

financing companies.

 

This will not be a “funding source” or “super broker” but a powerhouse of

leasing discounters and brokers.

 

The cooperative, OneWorld Leasing, Inc., will serve as a marketing and loan syndication company for small- and medium-sized companies in the industry. The cooperative expects to have 7 founding members and plans to have 500 member businesses by

the end of 2003.  There is no limit to the size of the co-op, and there may be

several “co-ops” per niche in the leasing industry, with other benefits for

members due to group purchasing “power.”.

 

 

“ We will not offer warehousing or funding of leasing transactions,”

David Stearns, CEO of American Leasing, says, "OneWorld Leasing will become

a true leverage play for the smaller leasing company concerned about

industry consolidation, super brokers, better lease-loan rates and a level

playing field.

 

“ We will be able to go to a major funder and say we represent 500 leasing

brokers.  We want a better buy rate than you are offering for our business.

 

“ If we represent 2,000 brokers, I am sure any funder will give us a

better rate...We may start off only with 500 brokers, but I am sure

we can obtain many advantages for our co-op members.”

 

Unlike lease consolidation plays, the members will own this,

yet continue to be independent." Stearns will initially serve as incoming

Chairman of the OneWorld Leasing board.

 

MainStreet's Richard Selby will serve as interim CEO during the cooperative

formation period. Six to nine months after launch, a leasing industry

veteran will be identified to lead OneWorld.

 

“ We have a list of over 6,000 leasing brokers, “ he said. “ This is very similar

to other cooperatives we have put together. We go to the supplier and say we

have these many members, what can you do for us.

 

“It is similar to going like going to a supplier of drywalls, “ he explained.

“We have group power buying that any supplier should be interested in,

and as important, benefits to our members.

 

“This also applies to other things we can do for members, including Airborne discounts,

Dun and Bradstreet discounts, health insurance discounts, and whatever the members

of our co-op would like us to help them with. “

 

 According to Selby, "of all of the cooperatives I have seen being launched in the last decade, OneWorld Leasing is a 'home run' in terms of industry dynamics and syndication

opportunities. We are proud to launch this together with American Leasing

Alliance. They truly are an industry champion. OneWorld Leasing will benefit

its members in many ways, both financially and operationally," Selby added.

 

Selby stated that he has been involved in eight new “co-ops.”  They are very

similar to agriculture co-ops, where growers combine their product together

and sell to at a “group price.”

 

American Leasing Alliance, based in the Chicago suburb of Lake in the Hills,

Illinois, is an emerging leader in the equipment lease finance industry.

 

 The company reportedly specializes in structuring lease financing for production,

income-producing and business-essential equipment. MainStreet Cooperative

Group, based in Tempe, Arizona is a leading cooperative service company.

MainStreet focuses on developing member-owned cooperatives in various

industries and also offers consulting and business services to cooperatives

within its network, which is approaching $3 billion in aggregate revenues.

 

How this will affect non-profit leasing associations is not known at this time.

Common co-ops are agriculture groups who affiliate to obtain a better

price.  The concept is similar to One World Leasing.

 

American Leasing Alliance is not related to American Leasing of Santa Clara, California.

 

Brokers on the National Association of Equipment Leasing Brokers (NAELB) Listserve have been talking about “banding together” for a “better rate” and “service”.   In fact,

it is one of the things on the agenda to see if the association wants to get involved

in such a “co-op” at their Orlando, Florida Conference April 11

 

Both Stearns and Selby will be available for your individual questions at “Meet the Leasing Newsmaker:” on Monday, April 11, 11am, Pacific Daylight Savings Time.

 

David Stearns will be attending the National Association of Equipment Leasing

Broker convention, Equipment LeasingAssociation convention, and National

Equipment Leasing Broker Association.

 

Monday, April 8t,  “Meet the Leasing Newsmaker.”

 

11am, California Daylight Savings time

 

www.leasingnews.org/newesmaker.htm

 

Contact: David J. Stearns,
American Leasing Alliance
(847) 458 0191

Richard W. Selby,
MainStreet Cooperative Group
(480) 831 6118


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