Thursday, January 28, 2016

Loeb Welcomes Two New Members to the Team!

Loeb is kicking off 2016 by welcoming two new additions!

Loeb is pleased to announce the addition of Tim Serritella as Vice President, Business Development. Tim is a seasoned business professional with over two decades of success providing financial and management solutions to business owners and senior management. Having previously worked in banking and turnaround, Tim entered the industrial marketplace in 2012 where he focused on sourcing asset disposition and bridge loan opportunities. He is an active member of the TMA, CFA , ACG and MBBI.

Tim is based out of Loeb's global headquarters in Chicago and will be working with customers throughout Illinois, Wisconsin, and all states west of the Mississippi providing equipment based financial solutions.

Also new to the LTS team is Sam Marder who joins us as the new Credit Administrator. He holds a BS and MS in Accountancy and previously worked in asset based lending providing AR lending.

Welcome aboard Tim & Sam!!

LTS Funds Over $6.1 Million Dollars' Worth of Equipment

$3.2 Million
to a Northeast Coal Mining Operation

$1.6 Million
to a Southeast Plastics Manufacturer

$1.3 Million
to a Southwest Oilfield Construction Company


We finance all types of businesses because we know asset values!

How can we help you provide the maximum funding amounts to your clients??

Currently working with clients who have financing needs?

Contact Jim Newman today at (773) 496-5720 or jimn@loebtermsolutions.com.


Friday, January 15, 2016

Industry News: Scrap Metal Firms are Getting Hammered

From Crain's Chicago Business




Andrew Jacobson is paying his suppliers a lot less these days. And that's not a good thing.

One of the owners of All Metal Recycling in Franklin Park, Jacobson buys scrap steel for $50 per ton, down more than 70 percent from a year ago. 

But that doesn't boost All Metal's bottom line, because the price it charges customers has fallen as well. “I think everybody is hoping for a gradual price increase,” Jacobson says. 

Scrap companies in the Chicago area are bracing for a difficult year. The stomach-wrenching swoon in metal prices is driven by the slowing Chinese economy, a strong dollar that makes exports less competitive and excess supply in commodities such as iron ore, which steelmakers can use to make steel instead of reusing scrap, according to Joe Pickard, chief economist at the Institute of Scrap Recycling Industries in Washington, D.C. 

“There's going to be a continued thinning of the herd,” says Brad Serlin, president of Cicero-based United Scrap Metal. 

Prices for many metals have been falling for several years, and 2015 brought no relief for firms that would benefit from a bit of inflation in the sector. Zinc fell 29 percent to $1,568 per metric ton over the past year on the London Metal Exchange, according to Bloomberg. Aluminum was off 20 percent, to $1,473 per metric ton, while copper dropped 26 percent to $4,609.50. 

Tucked away in the region's industrial corridors, scrap firms are popularly known for gathering, processing and selling metals yanked from broken fridges and outdated furnaces hauled in by guys with pickup trucks. 

More significantly, they play a critical role in the region's industrial economy. By cutting deals with thousands of manufacturers around the region to buy excess shavings and cuttings, scrap firms offer factories another income stream while keeping their plants clear of piles of metal waste. 

It's a low-profile and famously cutthroat business. The largest privately held scrap firm in the region is Burnham-based Scrap Metal Services, which recorded $536 million in sales in 2014, according to Crain's research. 

“I've seen high markets. I've seen low markets. For some reason, this one feels the worst of them all,” says Jeffry Gertler, CEO of Scrap Metal Services. 

Gertler's company idled four facilities focused on automobile scrap in the area last year, laying off nearly 50 people. A couple of months ago, Sims Metal Management, a struggling firm headquartered in New York, closed a metal-collection facility on the North Branch of the Chicago River. More dramatically, Pure Metal Recycling abruptly shuttered six locations in the area and one in Indiana in early December.

UNPAID BILLS IN WAKE

The second-largest private scrap recycler in the area, Pure had an estimated $465 million in revenue in 2014 and employed around 400 people, according to Crain's research. A letter from Lincolnshire-based Abrams & Jossel Consulting posted to Pure's website blames difficult market conditions for its downfall. The consultant is liquidating Pure's assets for the benefit of creditors, according to the letter.

The Abrams & Jossel letter says Pure has at least $7.8 million in assets and liabilities of more than $15 million. Chris Dandrow, Pure's CEO, did not return a phone call.

Pure's closure left firms that did business with it smarting over unpaid bills, a harbinger of what could happen if other scrap outfits fold. Van Hoesen Industries in Roselle, for example, is owed about $98,000 for pumping out and disposing of wastewater on several Pure sites, says Jim Van Hoesen, an account manager at the firm. 
Geoff Wendt, president of Midwest Metal Products, which manufactures angle rings, flanges and other parts, says Pure owes his Michigan City, Ind., company $30,000 for scrap it picked up. “It's terribly upsetting” to be potentially out that amount, Wendt says.

Meanwhile, one of Pure's secured creditors, Chicago-based lender Loeb Term Solutions, is trying to gather some 4,000 Pure collection bins scattered around the area, according Loeb principal Jim Newman.

The demise of Pure has opened up opportunities for competitors. “We've taken on everyone we think is a good fit,” says David Wong, chief operating officer at Redline Metals in Lombard. He adds that the new customers have helped the firm boost its volume at a time when keeping those levels up is a challenge.

Serlin, from United Scrap, says his firm is looking at Pure customers as well. It's betting it will buck the industry trend and grow revenue by double digits by focusing on sectors, such as automotive and aerospace, which remain strong, opening a new location, striking annual contracts with customers and carefully managing inventories.

Chicago resident Jerome Brown, however, is pretty much finished with the metal trade—at least for now. For several years, he'd pick up scrap in his truck when friends who worked on heating and plumbing projects told him they had metal to get rid of. Now, Brown's taking a “Why bother?” attitude to the gig.

With yards paying $60 to $70 per ton for iron scrap, down from $300 a ton a few years ago, “it's not worth it.” He's focused on his residential remodeling job instead.