Leasing lends a personal touch

When Robert Ensminger founded ExecuTech Lease Group in May 2010, the payments industry veteran had multiple startups under his belt, including a successful ISO. However, he wasn't satisfied with the state of leasing within the industry, so he set out to engineer a different kind of leasing company.

Ensminger assembled a team of experts in payment processing, cash advance and ATM systems to create a company that leases credit card processing, check processing and imaging, and ATM and POS equipment to merchants via a network of ISOs, member service providers (MSPs) and merchant level salespeople (MLSs).

"We want people to understand that we're not just another robot out in the industry," said ExecuTech President Kyle Moys. "We're one of the companies that when we build a relationship with our clients, we try to make sure that we're available all hours of the day for them."

This strategy appears to be paying off because, just two years after its launch, ExecuTech said it has attracted a growing legion of ISO and MLS partners. One such ISO is Indianapolis-based Advocate Merchant Solutions. AMS founder and Chief Executive Officer William Wise said it takes time to establish a relationship with a lease company in the payments industry and that very few companies offer the flexibility or responsiveness that ExecuTech does.

"There are 15 other companies that we could do business with," Wise said. "I've been selling leasing in this business for 13 years and probably have the best relationship with this lease company than I've ever had with any other lease company."

Pros of leasing

When is the best time to lease? According to Moys, leasing is ideal for business owners seeking to preserve working capital. With lease financing, he said merchants can leverage current technology and equipment without expending large capital reserves, which are both critical in today's cost- and technology-driven retail sector.

Some leasing companies specialize in certain types of equipment, rather than the broader spectrum of product segments. "There are some guys that will only do credit card terminals now," Moys said. "If you want to get a POS system, a credit card terminal or an ATM, we're one of those companies that can do all three."

As a one-stop lease source, ExecuTech works with all major equipment suppliers and reportedly will finance most any system that becomes available. "If there is a new company that is up and coming, I can even get that equipment approved as well," Moys noted. "We can lease anything from $500 up to $100,000, and above that if the opportunity presents itself."

One area that has seen an upsurge in leasing activity is the ATM industry. That's because in 2010, the U.S. Department of Justice issued a final ruling on new accessibility standards for ATMs under the Americans with Disabilities Act, setting a compliance date of March 15, 2012.

"It's huge, because a lot of these guys are having to replace equipment they've had for four or five years," Moys said. With the average cost of an ATM running $2,000 per terminal multiplied over several locations, leasing offers an affordable solution for meeting the new regulatory standards.

Another area where he expects considerable growth in leasing is in chip and PIN and Europay/MasterCard/Visa payment technologies. "Businesses are going to be required to have new equipment with that kind of capability," he said. "With some of the older equipment out there, they may not be able to download the tap-and-go payment systems. That's where leasing comes in."

ExecuTech has seen an uptick in leasing contracts from the franchise community for terminals equipped with the newer technologies. Switching out equipment in 50 or more locations is not uncommon in the franchise industry, and many require multiple terminals for each location, Moys said. While ExecuTech doesn't work exclusively with any equipment provider, it does have an exclusive agreement to lease the Dine Fraud Free pay-at-the-table wireless terminal system. The system can process PIN-based debit or chip and PIN payments and integrates with most restaurant software programs, ExecuTech said.

More leasing options

Moys pointed out that the fair market value (FMV) lease is standard for most lease companies. However, ExecuTech offers two leasing programs based on lease size and merchant preference. Flexible 12- to 60-month payment options are available with all leases; 48 months is predominant in the payments industry, Moys noted.

With ExecuTech's FMV lease, merchants have three choices at the end of the lease period. They can return the equipment to ExecuTech, continue to lease it or purchase the equipment at FMV. The FMV ranges from no less than 20 percent of the aggregate lease payments for a 12-month lease to 10 percent for 48- and 60-month leases.

For merchants, FMV lease benefits are twofold. First, the lease payments are tax deductible; second, merchants can continue to use the equipment until they decide to replace it.

An example of a case in which this type of lease would be most applicable is the lease of a $20,000 POS system: monthly payments of $200 or $300 would represent a substantial merchant tax deduction. This type of lease also offers the highest rate of return for ISOs, Moys added.

ExecuTech claims to be the only lease company that offers a dollar buy-out lease program, which is geared toward larger equipment leases. The Dollar ATM/POS Buy-Out Option gives customers the option to buy-out the equipment for $1 at the end of the lease period. "Some people at the end of that agreement just want to pay a dollar and own the equipment," Moys said.

He added that the simplicity of the dollar buy-out program appeals to both ISOs and merchants. But more importantly, the program can be a key differentiator for ISOs looking for another solution than the standard FMV lease to satisfy the needs of larger merchants, he said.

Bigger picture, greater flexibility

ExecuTech also believes the company distinguishes itself in the way it handles lease application approvals because it takes extra steps beyond just reviewing the typical financial data presented. "We listen to their story," Moys said.

"Hey, this business has been in business for 20 years and maybe the economy's been tough on them and they lost their house, but that doesn't affect the way the business operates. We'll take a look at the whole picture."

Wise concurred, stating that with his clients, ExecuTech is willing to consider additional factors that may contribute toward the approval of a lease or, at least, review questionable credit reports if necessary.

"From every experience we've had with them, whenever there's been a problem, they've always been willing to pick up the phone, explain the situation and really spend the time to talk to us," Wise said. "They've made exceptions for us, added additional equipment that wasn't part of their standard offering, customized their program to fit the way we wanted to have it done."

ExecuTech generally provides lease approvals within 15 minutes, as well as next day automated clearing house (ACH) funding once equipment installation has been verified. "If I have everything finalized today, the next morning the agent, ISO or MSP will have the funds in their account," Moys said.

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