Extra*Extra*Extra—Regular edition follows----
Pentech ceases funding for two weeks
"To Our Valued Customers:
As you are all aware, during the last year, the country has endured tremendous economic upheaval. Millions of homes have been lost to foreclosure, thousands of businesses have been closed creating massive unemployment, banks, (including our own) have been closed by the FDIC or forced to sell to others at pennies on the dollar and the credit markets have dried up. As you might expect, our customers have felt the impact of the economy deeper and faster than most. That fact, I am afraid, also affects us. During the last year, our ratio of delinquent accounts and our defaults have continued to accelerate. In spite of repeated changes in underwriting, hard work by the collections staff and working with our customers, our primary bank has restricted our ability to continue funding. Until we can negotiate some relief we are unable to fund new business.
"Effective immediately, we have placed a two week moratorium on funding. We are confident, but not certain, that this will give us time to work with our bank and arrive at a mutually satisfactory resolution to this problem. We will continue to consider new applications for approval but funding will be contingent on our ability to resolve the issues outlined above.
"During this funding interruption, Pentech will assist our loyal brokers/lessors in obtaining alternate funding in any way possible. Should you have any questions, please feel free to contact the Pentech staff.
"Pentech, over the last five years, has provided over $400 million in funding for more than 200 brokers. We look forward to resuming these relationships in the very near future."
Benjamin E. Millerbis President & CEO
Pentech Financial Services, Inc
910 East Hamilton Avenue Suite 400
Campbell, CA 95008
Pentech expects no layoffs and is negotiating their bank line for a permanent status rather than a two week status which seems to have been the situation with their main bank. Right now, no more funding.
Listed in the Monitor as the 15th largest independent with $110 million in volume in 2007 with 85 employees nationwide. Ben Millerbis, CLP, founder, past UAEL president, told Leasing News in 2007 that he had several warehouses full of computers, furniture, faxes, copiers. That entire inventory has reportedly now been disposed of and Hummingbird Solutions, a wholly owned subsidiary of Pentech, which handled the dot-com vintage inventory was closed in December of 2007. It seems stock options on venture leases made a difference, and they have anywhere from 150 to 200 company warrants, but the main income now comes Commercial as well as from Pentech Funding Services, reportedly doing more than $100 million a year.
Leasing veteran Ron Wagner, CLP, is Senior Vice President and General Manger. The "Navigator Program" is one strategic partnership funded by that division. It supports a subset of Manifest Funding Services' brokers by providing a funding source for B-C credits (deals do not have to be rejected by Manifest). The approval ratio has been in excess of 40%. Funding Services does not accept broker business outside its strategic partnerships. The Commercial Division in Campbell accepts broker business on deals exceeding $100K. Brad Brisbin remains as Vice President, Sales and Marketing, working out of the Roseville office in Northern California . Their emphasis is more in the $200,000 and above range as they attempt not to mix the "app only" programs with the "financial statements" Commercial program.