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A few weeks ago we celebrated our 20th anniversary. My what a ride it
has been. I am quite confident that when I founded Pawnee
Leasing Corporation in July of 1982 that the Pawnee Leasing
Corporation of 2002 was not the vision. But I expect that's
how life is supposed to evolve; twists and turns along the
way that polishes our dreams by making the necessary modifications
along the way.
We began operations in July of 1982 providing computer leasing for an
Apple Computer store in Sterling, Colorado that I had invested
in. The company was capitalized by what I thought was a huge
sum of money (about what we fund now in a typical day) and
we obtained a line of credit from a local bank. You probably
would be interested to know that Jerry Reeves, our present
executive vice president and credit manager, was the loan
officer. We had Bank of America's lease form, Apple Computer's
lease rates and off we went with me as the sole employee.
We bumped along leasing to the store customers, but that had
a limited market and was going to be an eventual losing game
plan.
In 1989 Pawnee and I moved to Fort Collins, Colorado. Happily, we were
able to continue our banking relationship as Jerry Reeves
had been transferred there as well. During the next year or
so we expanded our customer base by going outside of our computer
stores (now 4) to provide leasing to other computer retailers
in northern Colorado. It was a gentleman named Dave Malucky,
a one-man lease brokerage in Denver, though, that provided
us our next chapter by introducing us to the lease broker
market in 1990. That introduction would change the face of
Pawnee forever.
For the next year or so we did a little business with local Colorado
lease brokers while continuing on with our in-house lease
program. As the stores matured, however, it was becoming clear
that our lease program would not be sufficient to service
the needs of our customers. Computer systems were expanding
which meant the cost was as well and the typical $10,000 lease
was now $25,000 and going higher. We had neither the financial
strength nor the knowledge to service our stores. By servicing
the broker community we could more closely match our lease
purchases with our cash flow. By 1991 the stores accounted
for less than 10% of our volume and had faded completely by
1993. Pawnee was committed to the broker market and we have
not looked back since.
Our first significant brush with extinction came in late 1993. Century
Bank had been our only bank and we had a seven figure revolving
line with them, our only significant credit facility. This
was a time in Colorado banking history when the "Minnesota
Twins" arrived on the scene. First Bank and Norwest,
both of Minneapolis, started purchasing many of the banking
assets in Colorado and their actions set off a buying binge
by other national banks that feared missing out on the Colorado
market. Unfortunately for us Century Bank was purchased by
Key Bank and our type of business was no longer welcome with
the new organization. We had 90 days to pay off the note.
I had met Sam Leeper, a senior executive with Affiliated Banks of Colorado
in 1991 when they provided a small line of credit for a leasing
partnership we had formed. By late 1993 his bank had been
purchased by Bank One and they were my plan for survival.
Fortunately for us, the transition from Affiliated to Bank
One had been difficult and longer than anticipated but by
late 1993 Bank One was ready to do business and needed to
make up for some lost time. In less than 45 days Sam and his
team came through with a credit facility to replace Key Bank
and to provide funds for expansion.
We grew with Sam and Bank One into the golden era of specialty finance
where leasing companies were highly sought after and premiums
were high. Every company has capital issues and they are either
solved internally or you sell out to a larger organization
that can provide the external solution. Pawnee needed more
capital to fuel the growth and we had a suitor in early 1997
that could do that. I agreed to a buyout contingent on both
of us performing due diligence. As is so often the case with
founders; as the due diligence progressed I began to question
whether my buyer was the kind of company I really wanted my
employees and me to join. I thought our business model was
superior to theirs. I thought our team was better than theirs.
That kind of thinking was not going to produce harmony and
we had a mutual understanding to terminate the discussions.
No deal and we were back to looking for capital like a coyote
looking for his next meal.
Sam, as our banker, was in the loop of my thinking and the progression
of the buyout discussions. When it became clear that the deal
was going nowhere, I suggested to him that we get together
and talk about him joining us and helping Pawnee find additional
capital. In June of 1997, Sam joined us and introduced Dick
Monfort to Pawnee. We have just completed our fifth year together
and it is a combination that has led to substantial growth
in our portfolio, systems, and our financial sophistication.
So what now? We are going to keep doing what we know how to do, but do
more of it. We are going to continue to serve our broker-partners
by being the kind of partner we want for ourselves. We are
going to continue to support the leasing associations and
encourage others to do the same. We are learning how to do
business more efficiently and passing that knowledge onto
our broker-partners. I don't know what the next 20 years will
bring, but I know it will have challenges where only a nimble,
creative, innovative, and ethical organization can thrive
and prosper. Pawnee Leasing Corporation is committed to being
that kind of partner.
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