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Business Digest Article About North Star Leasing Company

Goldman Finds Leasing Pleasing

by Kimberly H. Danforth

As a boy growing up in Barre within an extended family of clothing retailers, Phil Goldman naturally assumed he, too, would one day run a clothing shop. "I came to the conclusion early on that I wanted to be in a business," says Goldman, recalling the relish with which he absorbed the talk of the "business of business." There was plenty of such conversation in his household: His father ran a clothing shop in Barre for 50 years; his fraternal uncle operated the Style Shop in Burlington for 40 years; his maternal grandfather opened a clothing store in St. Johnsbury in 1905, expanding to open stores in smaller communities; another aunt and uncle ran clothing stores in Montpelier and St. Johnsbury; and yet another uncle ran one in Rutland. Young Goldman’s career inclinations blossomed in this environment. "I wanted," he says, "to play the game of business."

When his father flatly rejected the idea that his son join him in the clothing business, "there was," admits Goldman humbly, "some disappointment." Thus begins the story of Phil Goldman’s journey from rebuffed clothier to the president of one of the largest, Vermont-owned cash-volume companies, North Star Leasing. "We like to think of ourselves as the third or fourth largest bank in the state."

"I’m a kind of driven person and I need to succeed," says Goldman in a tone at once friendly and blunt. His reserved demeanor belies the intensity of his statements. But as his office bulletin board announces: "It’s what you do that counts, not what you say you do." Goldman has done plenty to prove his claim. Straight out of Champlain College, the business major showed up at a local Barre bank with a business plan for launching a clothing business. It impressed the bankers – who nevertheless asked for "dad’s" signature.

His father’s unwillingness to sign did not dampen his drive. Goldman promptly landed a job at Montpelier National Bank. His parents approved. "They thought this was fantastic – steady, a bank…," he explains. "My father recognized there might have been a better way. He worked six to seven days a week. Work was nothing unusual in our household." In all, Goldman reflects, "My father was highly influential; he laid the foundation for my work ethic and thought process."

As a student, Goldman and a buddy relished in speculating about business opportunities in and around Barre. "I would say, ‘I think they could use a bowling alley here…,’ but I never thought of the financial aspect." A stint in banking was a step toward bolstering his financial training.

From there it was Seaboard Finance Co., based in Newport Beach, Calif. where over the next 10 years he rose from management trainee to one of the youngest branch managers in the country, to Regional District Manager for Vermont and New Hampshire where his branches received regular monthly achievement awards. When the realization of relocating to achieve advancement, Goldman’s thoughts returned to his ambition to run his own business. In 1979, with a credit line from a local bank, North Star Leasing Company was born.
Today the phone rings constantly at North Star and when we visited Goldman there came a call from Progressive Technology, Inc. regarding their approved application.
"We had the confidence what they were doing was making sense," says Goldman who, considering himself a "character lender," judges a lease application on the character of the individuals, their business and technical sense. Of Goldman’s three major considerations, "credit, collateral and character," North Star relies on the later. "We don’t do a lot by balance sheet ratios; it’s more by intuition," he explains. "It works for us."

According to Progressive Technologies chief financial officer Kathleen Bligh, it works for her company, too. The manufacturer grew 60 percent in its first year and 30 in the third and fourth. They began by leasing computer and office equipment through North Star and now entrust to this Vermont company costly research and development equipment carrying price tags of between $40,000 and $90,000. The company plans another surge of growth ("100 percent," claims Bligh) next year.

The attraction and commitment to North Star, explains Bligh, is regularly reinforced by the leasing company’s consistently low rates combined with personal attention. "We go out to others (leasing companies) and North Star is across the board the lowest," says Bligh, who is equally impressed by the company’s customer service. While most larger firms would invoice Progressive Technologies for their 10 leases separately, North Star manually invoices the total on the 25th of every month, saving paperwork headaches as well as gaining them capital advantages. Bligh, who shares Goldman’s enthusiasm for business, says she also "appreciates what it means to talk to someone who can make these decisions": Goldman.

For North Star, selling service is critical. "Lots of folks have money for sale," admits Goldman. "There’s no trick to getting it." Therefore, to beat the competition, North Star typically approves leases within hours, a turn-around time most larger companies can’t beat; and North Star pays dealers promptly. Adds Goldman, echoing Bligh’s sentiments, "You can also pick up the phone and talk with the president."

Such focus on service benefits local vendors as well. Shawn Kelley is vice president of Kelley Office Systems Inc. in Williston, which sells copiers, fax machines and digital document storage and retrieval systems. Kelley says he has "leasing companies beating down his door" offering special programs, yet North Star continues to offer his customers the lowest payment with quick approval. "And you never fill out a credit application," says Kelley.

Tim D’Arcy of Market Makers International Computer Centers Inc. in Burlington likes that the leasing company is local. "We can drive the paperwork around the corner," D’Arcy says. He also notes that no "smoke and mirrors" appear in North Star agreements. In the fierce competition for lease commitments, many large firms apparently offer vendors a cut in the form of "cash back" or advertise their leases as an "arm" of a particular product when, in fact, no formal connection exists.

North Star vendors are on point in a tidy leasing triangle that helps all parties equally. for retailers, such as Market Makers and Kelley, leasing offers benefits for their customers, usually "bringing the sale down to a lower number," notes Kelley. Adds D’Arcy, "It’s one more financing alternative that we have."

For many of D’Arcy’s customers, leasing is a convenience. "Our world is so technologically fast growing," he explains, "rather than buying equipment, people are saying ‘I’m going to lease for three years when I have to sell it anyway.’ " For budgeted agencies, such as schools and municipalities, leasing allows obtaining equipment through operating expenses when capital funds are no longer available.

While all this may bring on a yawn for the uninitiated, for Goldman, "It’s the ultimate job." Operating a leasing company allows him a view into various types of businesses – from a fourth-generation, family-run cracker manufacturer in Rutland to a national distributor of tropical drink machines.

Dan Allard, president of MGC Computer Services in Burlington, has known Goldman for many years, having worked with him at McAuliffe. "The guy has great business sense," notes Allard. "Working with him and for him has been an educational experience. He’s extremely organized and keeps his thumb on the pulse of where business is going; he’s keenly aware of market changes," Continues Allard, "He wakes up every morning with an idea of where he is and where he is going. That’s what makes him so successful."

Goldman, who considers his company one of Vermont’s "best kept secrets," adds to his definition of business achievement. He is proud of his company’s ability to provide his employees with a better than average compensation and pleasant work environment where they can grow professionally. He says, "I would consider letting employees go for lack of work a failure."
The number of veterans on North Star’s payroll vouches for his commitment. Kaye Smith in credit/collections has worked with Goldman since 1979. Accounting supervisor Deborah McCabe has logged 14 years. Pearl Fuentes, a relative newcomer at seven years, compliments Goldman’s leadership and fairness. "He listens to what you have to say; he’s concerned about how you feel and wants people to be happy," she says. Fuentes, supervisor of credit and collections at North Star, who drives 65 miles each way between North Star and her home in Marshfield.

Goldman’s travels from young retail hopeful to virtuoso in lease financing began with his father’s insistence that his children pursue a different avenue. Goldman’s siblings absorbed their father’s message early on. One practices law in the Boston area and the other, explains Goldman, "is in the celebrity connection business in L.A., securing speaking engagements for high-profile people."

Phil Goldman didn’t have to leave Vermont to pursue his love of business and created for himself "the ultimate job."