Lease Solutions That Soar

T here are many factors that persuade a vendor to pick a relationship with a leasing company, especially pricing and service. Meet one company that is striving to be competitive but is proudest of its service - Golden Eagle Leasing. It brings something extra to the payment-processing equipment-leasing space. What is that something extra? Ask Lisa Lersner, CFO of Golden Eagle, and you'll get the answer.

"You get a person, the right person, a real person that understands and has information right in front of them," Lersner says. "Our customer service and collection staff are assigned certain vendors, so there is consistency, a one-on-one and understanding of the vendors. They're frustrated out there, and with the advantage of having a dedicated rep to take them through the entire process, we make them more comfortable and less stressful."

Who isn't up for less stress?

Lersner doesn't stop there. "From a back-end perspective, our customer reps really treat merchants with respect and integrity," she says. "They understand frustration and will work in a very amicable way. And another unique situation is that our parent and sister company are involved in the same industry. We've got a relationship that brings a great deal to the table."

An understatement, to be sure. Golden Eagle's parent company is none other than Hypercom. Throw in sister company Verizon, and you've got one heck of a flight. Or do you? Might there be too many pilots in the cockpit?

Lersner is ready with the answer once again. "Our operation is a very independent, wholly owned subsidiary," she says. "We do report in to a Hypercom businessperson, but we are independent. They don't dictate who we lease to, what type of equipment we lease or which manufacturer we lease from. We lease VeriFone and a whole slew of point-of-sale products."

Golden Eagle Leasing was founded in 1987 through acquisition of a portfolio in Englewood Cliffs, N.J. Originally branded Golden Eagle Credit Corp., it was acquired in 1991 and became a subsidiary of Sequa Capital. The brand changed again to Sequa Credit but still was operating in the general office leasing arena.

Then in 1995, the business expanded to provide leasing solutions to ISOs in the form of credit card processing terminals and non-bank ATM equipment for their merchants. With this new lease program, Golden Eagle entered the micro-ticket leasing arena and began funding vendors with high volumes of transactions as low as $500. In December 1999, Golden Eagle announced that it was being sold off again. The buyer was Hypercom, and the acquisition, for an initial payment of $18.5 million in cash and $4 million in stock, with additional earn-out payments when certain objectives are met, closed in January 2000. Now based in Connecticut, Golden Eagle markets its leasing services to more than 4,000 equipment vendors throughout the United States.

As a stand-alone business unit, Golden Eagle has focused its efforts in the small-ticket leasing arena.

"As other lessors are in the same position, the credit environment is tighter out there, and all have concerns of today's economy," says Lersner. "We evaluated our business plan, taking those concerns into account. Our overall goal is to provide the highest level of service and reporting to our vendor base."

Golden Eagle works toward that goal by concentrating on a number of items to answer the needs of its vendors, such as customized service and offering rentals in conjunction with lease programs. Golden Eagle seeks to structure its service to meet primary goals while working within existing relationships to enhance its programs.

This commitment to exceptional service is delivered daily by a highly trained, experienced leasing staff, with an average time in the trenches of three to nine years. Golden Eagle has an in-house staff of 60.

"Our staff knows our agenda," says Lersner. "We've put together a structure that everyone is very trained on. Our IT staff is highly trained as well and can meet the recording requests of our vendors with lots of customization in reporting and overall operations."

Golden Eagle's operation encompasses a network of 500 ISOs, banks and processors. In the ISO community, it wants to do business with vendors looking for a long-term partnership who are willing to work together with Golden Eagle to develop a customized, comprehensive leasing program.

"We try to discover as much as we can about each ISO," says Lersner. "It is a fact of doing business today."

Golden Eagle's appeal to ISOs can be found in a number of aspects. One is a rapid turnaround time in terms of credit and documentation.

"Competitors take 24 to 48 hours while some have automated scoring systems in minutes. We are in between, with some applications processed within hours," says Lersner. "A scoring mechanism that delivers to ISOs in minutes is not comprehensive enough. The ISOs are not always getting all the information. We do a complete and comprehensive analysis of each application."

While Golden Eagle does offer online processing, faxes still are the preferred and easiest method by which most vendors apply. "We have found there is a lot more talk of exploration of online submissions," Lersner says, "but the ISOs in the field would need that technology out in the field, and a lot just don't have it."

Pricing is also another appeal to independent agents, and Golden Eagle is confident its prices are very competitive. For the harder-to-place leases, Golden Eagle will take the time to discuss options, such as rental programs, with its vendors. "ISOs have a lower attrition rate with leases versus sales," Lersner says. "We can offer that." Golden Eagle is capable of funding virtually any deal, ranging from a low of about $500 to multimillion-dollar transactions. Decisions are based primarily on the personal credit history of the merchant. Golden Eagle provides third-party leasing through partnerships with equipment vendors, manufacturers, distributors, wireless service providers and other suppliers.

Golden Eagle generally offers its leasing service within three market segments:

- Credit card authorization equipment with vendor partners who use non-bank ATM equipment.

- Micro-ticket with vendor partners who typically include VARs, wireless carriers and providers of relatively inexpensive multi-unit equipment, resulting in lease transactions usually ranging between $500 and $5,000.

- Small ticket with vendor partners who typically include providers and distributors of equipment in selected industries, resulting in lease transactions ranging between $5,001 and $250,000.

Make no mistake, though. Golden Eagle doesn't churn out deals.

"A lot of vendors are experiencing trouble getting financing for hard-to-place deals and programs," says Lersner. "We don't have to go through extensive channels of approval. We are it. If we can work with it, we will. We won't be foolish, though. We are not a cookie-cutter."

Golden Eagle's future deals surely will follow its successful track record.

"We've probably had a heavier focus on ISO-based volume, which we fully intend to continue to expand," Lersner says. "We've been expanding our bank and processor base volume and intend to continue to utilize the synergies that occur through comprehensive solutions. And we will grow our staff as our volume grows."

While growth can be challenging, Golden Eagle recognizes it has the same challenge all businesses are facing today, dealing with the effects of the current economy.

"We've seen a slight reduction in volume from a small number of relationships but nothing very significant," says Lersner. "Our philosophy has remained consistent. Our goal is to meet the needs of our vendors and to provide the best type of support."

It would seem that approach works well for Golden Eagle. According to Lersner, the company works through word of mouth with a lot of business coming from referrals.

Lersner also attributes its successful track record to its years of experience in general office equipment leasing, which provides Golden Eagle with a broader base of knowledge - knowledge that ISOs might not find in other companies.

"Our focus is on service," says Lersner. "Our goal is to be the premier provider, not necessarily the largest."