Presentation Of An Equipment Finance Firm ( Abc ) Essay
Welcome back. Last week we presented an opportunity to finance $6MM in production equipment for a medical device manufacturer. We are reviewing the transaction from the perspective of an equipment finance firm (ABC) that was recently acquired by a local bank (FCB). More information here: ________________
Below are simplified highlights of our decision-making process:
First, in checking our Risk Appetite Statements, we found that there is no RAS established yet for the equipment finance subsidiary, ABC. The bank’s RAS does not fully accommodate the types of transactions typically seen by this subsidiary. With minimal direction provided by the RAS, the stage was set for a lively debate within the credit team.
Some argued that Mr Pimer’s recent behavior showed an unacceptable lack of character. ABC’s Credit Analyst noted that Mr. Pimer is 100% owner of the business and his personal behavior is impacting the performance of the company. Mr. Pimer halved the size of the capital investment planned by his daughter, PimerMed’s EVP, and he has taken money out of the firm in recent years. The credit analyst conducted a second interview with the daughter to dig deeper into the downside risks of her father’s influence and talk through worst case scenarios.
The daughter told us that there have been other important company decisions that Mr. Pimer has adversely influenced. In the daughter’s view, the company…