The Nolan Bushnell Story
"When I first met Nolan Bushnell, in 1971, he was throwing out new television cabinets," explains Kit Menkin, founder of American Leasing. "I was cold calling the Koll Business Park on Scott Blvd. in Santa Clara, asking for business. Most of the businesses were new. They were looking for cash to buy equipment. The business park also housed reps. They did not stock equipment, but represented manufacturers. They received leads and made sales calls. They also generated leads. Many of them were looking for financing for their new customers."
Meeting Bushnell marked an early success for American Leasing, as Menkin went on to arrange all of Atari's leasing until its public offering.
"After awhile, I only saw Bushnell to sign papers, he was so busy," he says. "He was working 24 hours a day. It cost him his first wife. He kept growing, and at a constantly accelerating pace. He outgrew six or more locations, always needing the latest equipment. I remember one circuit board machine ordered four months prior to its arrival which Nolan never opened. It was obsolete by the time it got there. Nolan didn't want to put it into production, but he continued to make the lease payments. Never missed a one."
"Back then, there were several new companies making video games," Menkin recalls. "Atari had Pong and the race was on for more features, more bells and whistles. Everyone was getting into coin operated games. Nolan had this idea of a personal computer. He was developing it at the same time we began leasing for two guys starting a company called Apple Computers (I remember them listening to Beatles music as they worked)."
As American Leasing grew, so did its customer base: dry cleaners, restaurants, liquor stores, markets, manufacturers, woodworkers, distributors. Menkin estimates he has seen over 25,000 business financial statements and completed over 16,000 leases, many of them repeat customers.
"I should note that the majority of our leases result in the purchase of equipment," remarks Menkin. According to Menkin, leasing with an option to purchase has been popular for many years. Originally designed for big-ticket items such as mainframe computers, airplanes, railroad cars, and oil tankers, leasing with an option to purchase is now a popular method of acquiring less expensive equipment such as telephones, personal computers, and office furniture. For new businesses this means not only new or used equipment, but often equipment gained as a result of an acquisition.
"Leasing also has many tax benefits," Menkin states, "but keeping cash for working capital is the most important reason for a new business to lease. Cash for payroll, rent, inventory, purchasing, to keep going while revenue is being generated but not in the bank account. The motto of American Leasing for many years has been 'Cashflow Is King'."
According to Menkin, not many leasing companies look favorably upon or consider "new" businesses. He recommends that an individual starting a new business be prepared to provide information similar to that required for a bank application. This means a written business plan. It is also best to have a CPA or professional business consultant translate the business plan into a pro forma (profit and loss cashflow projection).
Individuals should be prepared to submit a current personal financial statement (a form available at a stationary store or bank), along with personal federal income tax returns for the previous three years. Menkin also recommends submittal of a resume or biography.
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