Whatever Happened to......


"Hal left the tech field, got into leasing, then got into software,

and now is back in the hills of Prescott, Arizona. A real even tempered,

nicest guy you will ever meet."


       Jim Merrilees




“Just a few words on my good friend, ski partner, golf hack, and sailor,

Hal Hayden...


“Hal Hayden was one of the first people that I met in the leasing industry in

the fall of 1994 and soon became one of the first users of the System 1

Software package under his company Priority Leasing.  I also finally met the

real driving force behind Hal Hayden that next spring and her name is Kathy!



“As a customer, Hal played a very integral part in the early development of

System 1 Software and eventually ended up joining the CapitalStream team

which provided us with a wealth of information and experience as we moved

our products into a new generation.  Even though Hal is no longer with

CapitalStream, we are still working closely with him in several areas. 


“I look at Hal as the epitome of what makes this industry great.  Financing

and Technology are simply by-products of what is important in the leasing

industry.  Relationships, honesty, integrity, values...... when you use

these types of words, you are describing my good friend, Hal Hayden.”


John Kruse

Co-Founder and VP of Customer Development




What Ever Happened to........Hal Hayden


 from IBM sales/software/lease broker/lessor/Sierra Cities/Capital Stream---

     back to what he likes to do best with the woman he loves in the areas

     they like better than anywhere else in the world---Here is his story:


As you know, I am no longer with CapitalStream, although I am still consulting  with them on several projects.  While I enjoyed my experience over the past couple of years working with them, I am very excited to be back in the leasing business now.  Currently my primary focus is to help grow our new company, Business Asset Funding, into a significant player in the small-ticket vendor leasing market.


It feels like familiar ground as I meet with vendors to discuss their needs in a customer finance program and explore niche markets that are currently underserved by the leasing industry.  While it certainly takes more work to uncover these niches and learn the details necessary to service them, it can be very rewarding.  I learned this lesson a number of years ago during my early years in the leasing business when I discovered that we could successfully compete against the big boys if we did our homework and “killed ‘em with service.”


I learned the vendor leasing business early in my career by going into sales for IBM, which was – along with Xerox – one of the best at using leasing as a sales tool.  No proposal for a computer system was allowed to go out without three payment options:  rental, lease and purchase.  After realizing that although I loved the sales game I was not cut out to be an corporate career type, I joined another ex-IBM’er as sales manager of an IBM Value Added Reseller organization.  It was a lot of fun and we made good money as one of their leading VAR’s, but we made the mistake of putting all of our eggs in one basket – the construction industry.  As a single-vertical-market company selling construction management systems, we suffered with the inevitable construction downturn in Texas in the mid-eighties.


One day our local leasing representative walked in the door to see where his usual stack of deals was and I began to quiz him about his end of the business.  Having always been more interested in the financial aspects of a deal than the technology side of it, I soon realized that he was possibly making close to what I was on each deal and yet he had a steady stream coming in from his various vendor clients.  Eureka!  I should be selling money rather than computers!


Very shortly thereafter I became the second salesman for that local three-person leasing company.  I installed a fax machine and a toll-free line and began developing relationships with other VAR’s all over the country that needed help with their customer financing.  Business grew quickly, I was having fun, and the money was great.  Life was good… until I discovered after about a year that my employer was a crook!  A very smart, CPA/MBA crook – sure – but really a crook.  We were on a line with Westinghouse Credit and an EDS-backed program called Network Leasing and he was cheating them both by double pledging paper.  It was obviously time to move on.


I talked with the only other leasing companies in town (two) and determined that neither one shared my vision.  (Another dumb move on my part since a year later Clark Covert, who owned one of them, negotiated with Dell to develop and run its first leasing program.)  Obviously, in order to stay true to my vision, the only option was to start my own leasing company.  Since I had no capital and my wife, Cathie, was on a leave of absence from IBM to go back to school, I sought out an investor/partner to join me.  With him came his CPA and a friend of his that did automobile leasing, and away we went.  Despite being sued by my former employer in a ridiculous attempt to prevent competition (he was finally arrested years later by the FBI), we struggled through the first couple of years and built a nice base of vendor business. 


After buying out my partners, my biggest potential pitfall came when our lead processor walked in one day and asked my what our maternity policy was.  I croaked “just say no” and told Cathie that night that when Michelle went on maternity leave we might be in trouble.  I had not paid much attention to documenting our credit procedures and was afraid the wheels might come off when she was out.  Since Cathie had a couple of months until starting her graduate program in psychology, I asked her to come in as a “consultant and use her extensive IBM administrative experience to put our back room procedures in order.  She finally agreed, and – surprisingly – found that she liked the entrepreneurial environment.  When September arrived she passed on grad school and I had a new partner!


Cathie and are both people that love new experiences.  I think we began to consider getting out of the business we owned and relocating because

(1) we had our particular niche within the leasing business pretty well figured out and it became fairly routine and (2) Austin was becoming a much different place to live than the small city we loved when we moved back there in 1984.  The effects of the technology boom were good for business but bad for quality of life.  I remember the straw that broke the camel's back was when we were out at Lake Travis one weekend on our sailboat in 1994 and could not find any place to anchor out for the night that wasn't filled with loud people in their fast cigarette boats.  It's difficult to watch a wonderful place that you have grown up in become something entirely different.


We spent the better part of two years traveling to places we enjoyed vacationing in the West and looking at these areas as potential places to live.  On our list were Ft. Collins and Crested Butte, Colorado, Helena, Montana and Taos, NM. 


Our company, Priority Leasing, thrived and we had fun.  However, by 1995, we were both ready to experience new things and decided to sell the business.  This turned out to be another great experience for me and soon we had sold the company, the office building, our house, two sailboats and various other “stuff” and we moved to a beautiful small town in the Northern Arizona high country – Prescott.


Although we did not initially consider Arizona because of the heat, a friend heard our criteria and told us that Prescott, where his wife had grown up, was a perfect fit.  We spent a long weekend here and agreed that it felt just right.  The climate suits us; there are four seasons here because we are at 5,800 feet, but the summer afternoons don't get above 95 degrees and the snow in the winter doesn't last more than a few days at a time.  The town has a long history since it was the first territorial capital of Arizona and the people have retained their heritage and culture, while still being open and friendly to newcomers.  And the landscape is truly beautiful; we have huge Ponderosa Pine forest behind our house and look out on the high desert terrain in the valley below. 


While Cathie managed the portfolio we had retained and built a beautiful home, I embarked on a new business venture.


Although I had no intention of working for anybody else after running my own company, Oren Hall offered me an opportunity that was very appealing – to create a new leasing product in a joint venture with his company.  He wanted Heritage Leasing to get into the software finance business and needed someone with my background to develop it.  He had arranged to fund the program through First Sierra, which was at that time still strictly a wholesale funding source.  Oren, Tom Depping and I agreed to a joint venture called Heritage Software Finance and I was back in the business again.  Before I knew it, both Heritage and my joint venture became a part of First Sierra, we did an IPO, and you know the rest of that story.  Lots of fun and excitement initially, but very disappointing when we saw the post-Oren senior management take several wrong turns.


There were many, many sudden moves taken by senior management which made little sense.  It became apparent that Tom Depping and his lieutenants (particularly the investment banker he hired away from Friedman, Billings and Ramsey) were solely focused on making a quick buck by getting the stock price up through a series of PR announcements, not by building and running a solid small ticket organization.  With each large national software vendor program that my group developed, the only interest that Houston had was in when they could issue the press release announcing its signing.  After Oren departed, there was no effort made to assimilate all of the acquisitions into one organization moving in a

unified direction; it was each group for itself.


In the meantime, my friends at System1 / CapitalStream showed me the technology they were developing for web-based origination automation and I decided to spend some time in the technology world again.


After moving here, Cathie took over the management of our portfolio.  By the end of last year, she had worked through the last transaction on the books and worked herself out of a job!  She has become very involved in several environmental education efforts with children - The Highlands Center for Natural History and the Central Arizona Land Trust.  Although she enjoyed her stint in the leasing industry, I don't think she has any interest in re-joining it at this point.  I have begun a new leasing company called Business Asset Funding with a partner here in Prescott ..  We are developing small-ticket programs for vendors in a couple of niche markets that seem to be completely underserved by the industry.  As I mentioned, it is fun to be starting a leasing company again!


So, as you can see, in a sense I’ve come full circle.  I’ve made a lot of great friends in my career in the leasing business and am very happy to be back at it.


Hal Hayden








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