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Five Minutes With — Jeff Kuglen - Lease Financing
San Antonio Business Journal (January 2009)

Five Minutes With — Jeff Kuglen - Lease Financing

San Antonio Business Journal (January 2009)

Jeff KuglenIn 2006, Jeff Kuglen bought the South Texas franchise for Wirth Business Credit, a company that offers commercial equipment leasing for small businesses. In these last two years, he has provided approximately $10 million in lease financing to small businesses from Austin to the South Texas border. Wirth Business Credit works with customers and equipment suppliers and provides financing for items ranging from $5,000 to $250,000. Wirth is a subsidiary of Winmark Corp., a publicly traded company.Kuglen recently talked with the Business Journal about equipment leasing and Wirth Business Credit.Q. How did you get into the equipment financing business?A. ... After graduating from college in the mid 1980s I started a confidential document shredding company and a medical waste company. I operated those companies through the 1990s and sold them in 2003. I spent a few years working for a large bank. I then left the bank in 2006 to go back into business for myself and acquired the Wirth Business Credit franchise.Q. Why Wirth Business Credit?A. I was looking for an opportunity that would allow me to leverage my understanding of small business with my understanding of leasing and financing. After doing a fair amount of research, I found the Wirth Business Credit System. ... As a Wirth franchisee, I do all the sales work to generate credit applications and to close transactions. Wirth provides the credit underwriting, lease servicing and back up.Q. How does commercial equipment leasing differ from borrowing the money from a bank?A. Commercial equipment leasing differs from traditional bank financing in a couple of ways. First, leasing offers some tax advantages over traditional financing. Typically leases are treated on your profit and loss statement as a current expense, and so you do not have a situation where you take it into your business as a capital expenditure and then depreciate it as a debt item. However, accelerated depreciation rules have given some tax incentives to outright purchases in some cases. It really depends on several factors, such as how much debt you have on your balance sheet. It’s something businesses should review with their accountants. Also, most leasing will provide 100 percent financing of the equipment purchase often requiring only one or two payments in advance at lease signing.Q. What percentage of your deals actually get funded?A. At Wirth, we approve about two-thirds of the stuff that comes in. ... About 70 percent of my approvals turn into actual business that is booked.Q. How do the interest rates and borrowing terms compare to other methods of borrowing?A. Wirth Business Credit can offer competitive structure ... Most deals go for 36 to 60 months, depending on the value of the transaction. The longest term is 60 months. Depending on the terms of the agreement, sometimes the lessee ends up owning the equipment, sometimes they don’t.Q. What can customers lease?A. The types of equipment I have been leasing over the past year tend to fall into one of the following categories: Construction and utility equipment, printing and copying, signs, and ice making and refrigeration equipment. Most commercial equipment, with very few exceptions, can be leased.Q. How has your market been affected by the credit crunch?A. Since the credit crunch, my market has expanded. Wirth is definitely open for business. We have money available and are looking for transactions to fund. My overall application volume hasn’t increased since the economy has slowed down, but the sources for my referrals have increased.Five Minutes is a regular Special Report feature. For more information, contact Donna J. Tuttle at dtuttle1@bizjournals.com.
In 2006, Jeff Kuglen bought the South Texas franchise for Wirth Business Credit, a company that offers commercial equipment leasing for small businesses. In these last two years, he has provided approximately $10 million in lease financing to small businesses from Austin to the South Texas border. Wirth Business Credit works with customers and equipment suppliers and provides financing for items ranging from $5,000 to $250,000. Wirth is a subsidiary of Winmark Corp., a publicly traded company.Kuglen recently talked with the Business Journal about equipment leasing and Wirth Business Credit.Q. How did you get into the equipment financing business?A. ... After graduating from college in the mid 1980s I started a confidential document shredding company and a medical waste company. I operated those companies through the 1990s and sold them in 2003. I spent a few years working for a large bank. I then left the bank in 2006 to go back into business for myself and acquired the Wirth Business Credit franchise.Q. Why Wirth Business Credit?A. I was looking for an opportunity that would allow me to leverage my understanding of small business with my understanding of leasing and financing. After doing a fair amount of research, I found the Wirth Business Credit System. ... As a Wirth franchisee, I do all the sales work to generate credit applications and to close transactions. Wirth provides the credit underwriting, lease servicing and back up.Q. How does commercial equipment leasing differ from borrowing the money from a bank?A. Commercial equipment leasing differs from traditional bank financing in a couple of ways. First, leasing offers some tax advantages over traditional financing. Typically leases are treated on your profit and loss statement as a current expense, and so you do not have a situation where you take it into your business as a capital expenditure and then depreciate it as a debt item. However, accelerated depreciation rules have given some tax incentives to outright purchases in some cases. It really depends on several factors, such as how much debt you have on your balance sheet. It’s something businesses should review with their accountants. Also, most leasing will provide 100 percent financing of the equipment purchase often requiring only one or two payments in advance at lease signing.Q. What percentage of your deals actually get funded?A. At Wirth, we approve about two-thirds of the stuff that comes in. ... About 70 percent of my approvals turn into actual business that is booked.Q. How do the interest rates and borrowing terms compare to other methods of borrowing?A. Wirth Business Credit can offer competitive structure ... Most deals go for 36 to 60 months, depending on the value of the transaction. The longest term is 60 months. Depending on the terms of the agreement, sometimes the lessee ends up owning the equipment, sometimes they don’t.Q. What can customers lease?A. The types of equipment I have been leasing over the past year tend to fall into one of the following categories: Construction and utility equipment, printing and copying, signs, and ice making and refrigeration equipment. Most commercial equipment, with very few exceptions, can be leased.Q. How has your market been affected by the credit crunch?A. Since the credit crunch, my market has expanded. Wirth is definitely open for business. We have money available and are looking for transactions to fund. My overall application volume hasn’t increased since the economy has slowed down, but the sources for my referrals have increased.Five Minutes is a regular Special Report feature. For more information, contact Donna J. Tuttle at dtuttle1@bizjournals.com.

In 2006, Jeff Kuglen bought the South Texas franchise for Wirth Business Credit, a company that offers commercial equipment leasing for small businesses. In these last two years, he has provided approximately $10 million in lease financing to small businesses from Austin to the South Texas border. Wirth Business Credit works with customers and equipment suppliers and provides financing for items ranging from $5,000 to $250,000. Wirth is a subsidiary of Winmark Corp., a publicly traded company.Kuglen recently talked with the Business Journal about equipment leasing and Wirth Business Credit.

Q. How did you get into the equipment financing business?

A. ... After graduating from college in the mid 1980s I started a confidential document shredding company and a medical waste company. I operated those companies through the 1990s and sold them in 2003. I spent a few years working for a large bank. I then left the bank in 2006 to go back into business for myself and acquired the Wirth Business Credit franchise.

Q. Why Wirth Business Credit?

A. I was looking for an opportunity that would allow me to leverage my understanding of small business with my understanding of leasing and financing. After doing a fair amount of research, I found the Wirth Business Credit System. ... As a Wirth franchisee, I do all the sales work to generate credit applications and to close transactions. Wirth provides the credit underwriting, lease servicing and back up.

Q. How does commercial equipment leasing differ from borrowing the money from a bank?

A. Commercial equipment leasing differs from traditional bank financing in a couple of ways. First, leasing offers some tax advantages over traditional financing. Typically leases are treated on your profit and loss statement as a current expense, and so you do not have a situation where you take it into your business as a capital expenditure and then depreciate it as a debt item. However, accelerated depreciation rules have given some tax incentives to outright purchases in some cases. It really depends on several factors, such as how much debt you have on your balance sheet. It’s something businesses should review with their accountants. Also, most leasing will provide 100 percent financing of the equipment purchase often requiring only one or two payments in advance at lease signing.

Q. What percentage of your deals actually get funded?

A. At Wirth, we approve about two-thirds of the stuff that comes in. ... About 70 percent of my approvals turn into actual business that is booked.

Q. How do the interest rates and borrowing terms compare to other methods of borrowing?

A. Wirth Business Credit can offer competitive structure ... Most deals go for 36 to 60 months, depending on the value of the transaction. The longest term is 60 months. Depending on the terms of the agreement, sometimes the lessee ends up owning the equipment, sometimes they don’t.

Q. What can customers lease?

A. The types of equipment I have been leasing over the past year tend to fall into one of the following categories: Construction and utility equipment, printing and copying, signs, and ice making and refrigeration equipment. Most commercial equipment, with very few exceptions, can be leased.

Q. How has your market been affected by the credit crunch?

A. Since the credit crunch, my market has expanded. Wirth is definitely open for business. We have money available and are looking for transactions to fund. My overall application volume hasn’t increased since the economy has slowed down, but the sources for my referrals have increased.


Five Minutes is a regular Special Report feature. For more information, contact Donna J. Tuttle at dtuttle1@bizjournals.com.