NFS LEASING: OUR STORY

Behind The Business:
Back The Jockey, Not The Horse.

NFS Leasing has approached $1 billion in lease originations since its 2001 inception, working with individuals and businesses with challenged credit and big ideas. With an eye toward the entrepreneurial and a leadership team with over 235 years of combined management experience, NFS Leasing has worked with 5,000 clients and partners across the business spectrum to make an impact in the community. 

NFS Leasing may have executed its first lease in 2007, but the path to becoming the story lender began long before that. To provide opportunities to those with challenged credit, the NFS Leasing team listens to the story behind the spreadsheet.

This is the story of NFS.

$2,000 AND A GARAGE

Long before NFS Leasing began making an impact, before the more than $700,000 in charitable contributions and the hundreds of millions in capital infusion, before the visions realized and the jobs created, NFS was borne from the captive leasing portfolio of NEXL Financial Services.

NEXL Financial Services was the storied credit arm of the New England computer equipment sales and leasing company, NEXL. From 1990-99, NEXL would grow to $100 million in revenue and eventually be sold to public company, MTM Technologies, Inc. in 2004, but NEXL began from much humbler beginnings.

In October of 1989, President of NFS Leasing Cliff Rucker founded New England Computer Sales & Leasing, Inc. Before the era of personal computers and long before smart phones loaded with incredible computing power were a mainstay in our pockets, companies bought networking and computer equipment that could cost upwards of half a million dollars. 

Rucker was fresh out of college and training to his physical and mental limits in the martial arts. While training, he became close with a fellow student working as a field engineer for Digital Equipment Corporation. At the time, Digital was the largest employer in Massachusetts and the second largest computer company in the world. Through their conversations, Rucker had an idea. Why couldn’t they buy used DEC equipment, repair it and resell it? As it turned out, there was immense value in selling refurbished computer equipment.

Rucker and his colleague borrowed $2,000 from his colleague’s wife, rented a Ryder truck, purchased a 100 VT 220 from Reebok for $2,000, repaired it in a Swampscott garage and sold it for $6,000 the very next day. This was to be the only loan NECSL or NEXL would ever require and the potential for growth in their business plan was clear.

While Rucker’s partner was still working at Digital during the day, it fell on Rucker to track down the equipment. While the growth potential of NECSL was obvious to the pair early on, it wasn’t paying the bills just yet. Rucker was sleeping on couches and in his car while working to grow the company and taking on any job he could, from painting houses to tending bar and moving furniture to keep the lights on.

“When we started, I had a necessity to survive,” recalled Rucker. “It wasn’t whether I was confident or not. Failure was not an option. I needed to eat, I needed to survive. I needed to create a life for myself at 24 years old because I didn’t have a fallback plan, I was living in a car. After buying something for $2,000 and selling it the next day for $6,000, it was like, wow, this is insane. We’ve got a little business here.”

Between 1989 and 1992, the company experienced incredible growth and in April of 1992, Rucker decided it was time to rebrand. NECSL became NEXL, Inc. and by now the company had grown from its small roots into a $20 million company employing 25 people.

INTEGRITY IS EVERYTHING

The trust that the team built in those early days remains today. NEXL, its predecessor NECSL as well as NFS Leasing itself were all forged by integrity and trust, solidified by a familial DNA that was as appealing to the team back then as it is today.

Craig Cooper has been with NFS Leasing as the company’s Vice President of Business Development since 2010, but he began working with Cliff at NEXL in the mid-90s as a salesman.

“I think the reason he hired me was that I actually beat him on a deal,” Cooper laughed. “We were going head to head on a deal and I won it. After he found out, he said how’d you beat me? I said, I jumped on a plane and went out and met the customer. I took him out to dinner, got to know the guy, that’s how I won the deal.”

While Cooper would win that particular deal, the equipment in play was purchased from Rucker so, according to the VP of Business Development, Rucker still won in the end.

The pair would soon become colleagues and friends and the concept of one-on-one meetings and phone calls with potential clients remains an important aspect of NFS Leasing’s game plan.

The company that began with a used dumb terminal encased in bubble wrap and a $2,000 loan had 60 employees and $60 million in revenue by 1995 as Rucker and his staff launched the e-commerce site NEXL.com. Between 1997-99, NEXL partitioned into two units, the used equipment sales-focused NEXL and the new managed services provider and technology integrator, NEXL Network Systems. The leadership team needed to grow, as well.

Today, Dean Oliver holds the title of Principal at NFS Leasing, but back at NEXL Inc., Oliver served as President and Chief Operating Officer. Oliver and Rucker met during the early years of NECSL, as the pair were training in martial arts. Both would become instructors. 

Oliver was earning his master’s degree in business and working for a Fortune 500 company at the time. The pair had spoken about teaming up over the years, but it wasn’t until an unexpected spring snowstorm in New England that it became official.

“We had two feet of snow and nothing was going on, I called Cliff up and said, ‘OK, I’m ready,” remembered Oliver. “He said, start tomorrow. I asked what I was going to do and he said, come on down and we’ll figure it out when you get here.”

It was around the same time that NFS Leasing CFO and Chief Credit Officer Mark Blaisdell joined the NEXL team as CFO.

“I’ve been here since the beginning,” said Blaisdell. “I was Cliff’s CFO at NEXL. What pulled me here was working with Cliff, basically. If you go back earlier in my career, I’ve always been a finance person, my degree is in finance, I’ve always been, let’s say, business partner with all of the companies I’ve worked with the CEO, the entrepreneur, the owner of the business. I’ve worked for four different companies in those roles, all in manufacturing for medical or IT.” 

Blaisdell wasn’t alone in seeing the opportunity at the company. Cooper saw those early days of potential as the west-coast native departed California and moved to Boston.

“I told him at the time, I’m not a guy who likes to jump around. If things work out well, you’re going to be seeing my face for a long time,” he explained. “Number one, I saw the ability to make money. Two, Cliff was a man of his word. In the business we were in, there were a lot of used-car salesman type people, a lot of snakes. Cliff has always been a man of his word. He’s always had a good reputation. We connected. We’ve been friends for a long time, our kids grew up together, we vacation together. Our families are very close.”

The trust that the team built in those early days remains today. NEXL, its predecessor NECSL as well as NFS Leasing itself were all forged by integrity and trust, solidified by a familial DNA that was as appealing to the team back then as it is today.

David DePamphilis began his role as Executive Vice President and COO of NFS Leasing six years ago, but his relationship with Rucker and NEXL began long before that, while DePamphilis served as Senior Director of Sales at EMC Global Financial Services. During his 17 year EMC tenure he interacted with numerous challenged credit lenders and found that not all of them met DePamphilis’ standard.

“The integrity level of those individuals was not to my standard,” said DePamphilis. “I found a lot of these folks to be of questionable character. I didn’t want that reputational risk. I was representing EMC. I was introducing this third party to my customers. I had some risk there. I took it very seriously. I would not have come here if it were not for Cliff and working for a brilliant business mind who has a very, very high level of integrity.”

THE DOT-COM BUBBLE

During the mid-90s, the world was experiencing what would come to be known as the dot-com bubble. E-commerce was exploding and, in many cases, businesses were valued solely by how many visitors landed on their site. There was an incredible demand for technology and NEXL had the ability to capitalize on the growth.

By 1999, NEXL had over 200 employees spread out across 10 locations and had earned over $100 million in revenue. Starting in the early spring of 2000, the dot-com bubble began to crash and the tech landscape changed forever.

“Our revenue went down by 70 percent overnight,” recalled Rucker. “I didn’t want to lay anybody off. I was writing mind-boggling checks to keep people employed. Hundreds of thousands of dollars out of my own pocket every month so I didn’t have to lay anybody off.”

From 2001-2003, Rucker and the NEXL team worked tirelessly to build the company back up.

“It was hard. We worked very hard to build it back up.” said Rucker. “It had taken its toll.”

With NEXL back to $80 million in revenue, publicly traded company MTM Technologies, Inc. purchased NEXL Network Systems. MTM acquired NEXL Network Systems as a significant piece of a much larger rollup into what MTM hoped would become a $1 billion dollar systems integrator. Much of the team would remain with MTM following the merger and many more would later move on to NFS Leasing.

“When I sold the business, I wrote a hand-written note with a check to every single employee, whether they had been here a day or 10 years,” said Cliff. “It’s the family DNA. We did this together. Yeah, I got paid well, but I couldn’t have done it without you and it wouldn’t feel right to not share in some capacity, so that’s what I did.”

While much of the NEXL team stayed with MTM after the acquisition, including Rucker and Oliver, their time at MTM would be short-lived.

“Cliff was CEO at the time and I was President and COO and six months to the day after they closed the transaction, they fired both Cliff and I,” recalled Oliver. “It wasn’t a fit. I was told I was too entrepreneurial. I look at something and say, hey, we can do X, Y or Z and make it work. They were more like, don’t make waves.”

The acquisition of NEXL Network Systems to MTM left behind NEXL’s lease portfolio, as MTM saw no value in it. This left the door open for what would become NFS Leasing.

BACK THE JOCKEY, NOT THE HORSE

The team speaks with clients one-on-one to learn the true story behind their needs and challenged credit. This affords them flexibility far beyond traditional financing options and allows the team to make determinations based on factors well beyond the spreadsheets and bottom line.

Following the sale to MTM, Rucker had a unique chance to map a company’s future. In 2006, the planning began and in 2007, NFS Leasing was founded with an initial focus on leasing IT equipment. At the start, the team was just Rucker and Blaisdell. NFS Leasing set out to see finance through an entrepreneurial lens and with their years of business experience, the team could go far beyond their ability to make flexible credit decisions.

“The reason, I think, that NFS was really created was to provide that access to capital to my younger self, 30 years ago,” said Rucker. “To try and find those people like me, who are hard working, well-intentioned, high integrity, but don’t have access to capital. We’ve used leasing as a vehicle for that, because you need equipment.”

The NFS team utilizes their business know-how to both understand challenged credit clients and work toward solutions. To strengthen the core team, Rucker and Blaisdell looked to many of the relationships they had forged during the NEXL years.

“We sold the trade name NEXL, but we changed the name from NEXL Financial Services to NFS and basically just continued,” explained Blaisdell. “They didn’t want that leasing portfolio, so I continued to manage that for Cliff as sort of a hobby or sideline. Once the NEXL/MTM gig ended, Cliff and I said let’s do this full time. I didn’t really come to NFS, it was more of a migration. Within the first year of operation, we began hiring back some NEXL regional managers.”

Much of the early team signed back on, including Dean Oliver, Craig Cooper and Mark Blaisdell. New roles became filled and NFS Leasing was up and running. Throughout the company’s history, working together and trusting your colleagues has been crucial.

“We’re a small enough company that we still think of it as a family environment,” said Emily Silva, Director of Leasing Services at NFS. “There is a lot of camaraderie between all the employees and different departments. We’re all working toward the same goal and work really well collaboratively.” 

In the beginning, the NFS Leasing team used their combined knowledge in business, finance and the tech industry to focus their aim. It didn’t take long before they realized they could comfortably diversify using the same knowledge base they’d been accumulating for years.

“Day one, we targeted the tough credit space,” said Jim Murphy, a Principal at NFS. Murphy had been a part of NEXL since the late 90s and was one of the first to sign on when NFS launched.

“We originally targeted the IT space because that’s what we were comfortable with,” he said. “The basic story at the time was very simple: we’re going to take risks with the gear and if the companies go out of business, or it comes back to us as some sort of default, we’re pretty good at moving IT equipment. We come from a background of being a broker, of selling hardware, of putting solutions together. We feel that if defaults happen, we’ll be able to overcome them with our resale capability. It worked out a little bit that way, but what we really did was just focus on being better adjudicators of credit. We were taking risks and then we realized probably two or three years into it that we need to spread our asset base out across IT.”

From their first lease executed in 2007, NFS Leasing had grown to $100 million in lease originations by 2010. While NFS grew rapidly, it was simultaneously expanding in new directions with a diversifying lease portfolio that grew beyond IT and office equipment into medical, scientific and construction equipment financing and leasing.

“Today, if you’re starting a business, you’re not going to go out and buy a half million dollars worth of networking or computer equipment to put in a closet for you alone,” explained Blaisdell. 

The majority of people making IT investments and starting businesses today do so through the cloud network.

“We have a platform and we try to do the same thing we did with IT,” Blaisdell said. “Understand the collateral, learn the collateral, find out who the players are in the market, find out who the brokers are and how you sell used equipment in those markets. We know the playbook.”

By 2015, their decision to diversify paid off, as the company had reached $500 million in lease originations.

Today, NFS Leasing uses the lessons the core leadership team learned along the way to determine the companies or individuals to work with. The team speaks with clients one-on-one to learn the true story behind their needs and challenged credit. This affords them flexibility far beyond traditional financing options and allows the team to make determinations based on factors well beyond the spreadsheets and bottom line. 

“It’s easy to throw some numbers down on a spreadsheet,” said Chuck Worsham, Vice President of Business Development. Worsham and Rucker’s relationship dates back to 1989, when Worsham was working for a used equipment broker. Worsham was a major factor in opening NFS’s Chicago office.

“Have they really thought the business through?” he said. “Are they passionate about what they’re doing? Are they competitive? Are they confident? Are they tough? You’ve got to be tough in this space. Business is tough. It’s a hell of a lot harder to start a business today than it was 20 years ago. It’s not easy. You talk to them, you feel them out. When you finally say yes to a business, they’re ecstatic that we’re going to be able to help them get up and running. That’s very gratifying.”

The NFS team does their homework. Is there a secondary market? Does the client have a need for NFS Leasing’s specific financing options? Have they surrounded themselves with smart and enthusiastic minds? Most importantly: do they have integrity?

“Integrity is what it’s all about,” said Rucker. “It’s very difficult to make that determination in a phone call, but that’s what we’re trying to do. Things happen in business. It never goes according to the instruction manual. We look for integrity. People who call you back. People who tell the truth. ‘Yes I’m struggling, this is what we’re doing about it, please be patient.’ Part of our value is that we’re not just bankers or lenders or finance people. We’re operators. We’ve started and run successful  businesses. We’ve started them from scratch. We bring a lot to the table in terms of what it takes to be successful.”

A sort of unofficial motto, the NFS team backs the jockey, not the horse. They are looking for clients with similar DNA and an entrepreneurial spirit.

“There was a reason doctors made house calls,” said Murphy. “They wanted to see what kind of food you’re eating, what kind of environment you’re living in. That can tell a lot about why you’re sick. Same with us, we want to see people in their environment. I don’t care if it’s a two office executive suite that you’ve rented out. Show me what you’re doing on a day-to-day basis. Show me the plan.”

CREATING OPPORTUNITIES

The name of the game is backing solid individual entrepreneurs. The fundamental leasing and finance space for NFS Leasing is primarily in medical, tech, scientific and construction equipment, but with their expertise in business, finance and adjudicating credit, they have been able to expand well outside the box and have the capability to work in numerous spaces.

“We like to look at how it benefits the greater good,” said DePamphilis. “Are they helping people? Are they creating jobs? The first and foremost important thing to me is protecting our company. We don’t want to do bad deals. I want to do profitable deals. I don’t want to hurt NFS. Then there is a feel good aspect to the job. Are we helping people? That gets me excited.”

That feel good aspect is what makes the NFS team tick. In the lobby of the Beverly office, there is a massive board overlooking the foyer with hundreds of logos from companies the team has worked with. It is a constant reminder of the opportunities for success NFS has given those with challenged credit.

Today, NFS Leasing has infused almost $1 billion of capital into the economy, worked with 5,000 clients and partners and generated thousands of jobs. Job growth and economic stimulation are afterthoughts. Making impactful decisions is a huge component of what makes the team tick and it’s not hard to find examples that are meaningful to the individuals who make up NFS.

“When you take somebody who is barely squeaking along, renting equipment, paying $100,000 a month and you take their payment from $100,000 in equipment rental to $50,000 in a lease and at the end of three years they’ll own that equipment, you did something good,” said Oliver. “Not only did you do a good thing for them, these guys aren’t just excavators anymore, they’re able to go into real estate development because they were able to save some money. They’re going to create jobs and it’s really nice to see.”

One example that stands out in Rucker’s memory is a 76-bed acute care hospital in rural West Virginia that was near-closure. Current and former mayors of the town alongside a West Virginia legislator put their money together to save the hospital, but they needed $700,000 in funding for patient monitoring equipment or they would be shut down by the state.

“Early on in the phone call, he said look I know you don’t care about the mission or what we’re trying to do and I said, actually, we do. We really do,” said Rucker. “We approved the deal on the phone call for $700k and he sent me a very nice email about what an honor it was. Those are the reasons we’re in business. If this guy had to go through conventional financing options, it might have taken him two months and, in all likelihood, would have been a no.”

The hospital was saved, thanks in no small part to the NFS team. There are many examples like this and many more examples of entrepreneurial minds with big ideas getting the chance to see those ideas come to life. Banks and lenders may balk, but with their combined business knowledge, the NFS team can look past the spreadsheet and understand the individual thought processes behind the proposals. 

Today, the team at NFS holds the same value that launched NECSL and NEXL into success: act with integrity.

“The people that have been fortunate enough to be around for a long time, we all share the same sort of core foundation,” said Cooper. “Family. Work hard. Try to make money and do what’s right. We don’t cut corners. We don’t cheat people. That’s not how we do business. That’s not who we are.”

Through their combined success and business acumen, the NFS team can think outside the box to provide financial options to those who may have never had an opportunity without them. They have the ability to make an impact and that is never lost on the NFS team.

“I am no longer driven by the necessity of survival,” explained Rucker. “That motivated me for the first 20 years of my career. Now I’m motivated by giving other entrepreneurs opportunities by making good, impactful investments and creating lots of opportunities for lots of people.”