Southgate Capital finds the right partner
By Kay Falk, for SBT
Luck, expertise and timing all play a role in a successful business launch. For Pete Peckarsky, president of newly formed Southgate Capital, luck brought him and his family to the same dinner table as John Miota and his family at a National Leasing Association convention three years ago.
Peckarsky already possessed leasing expertise. He was then a senior vice president at Russ Darrow Leasing and had more than 20 years of experience. When he was ready to go into business for himself, he remembered that dinner meeting and gave Miota a call.
"I needed a partner," Peckarsky recalls, "John, his son Kevin and I decided we could make a go of a new business if we shared infrastructure with Southgate Leasing Corp., their current business in southwest Milwaukee."
Southgate Leasing Corp. is a full-service lessor of fleet vehicles, automobiles and trucks, to medium and large companies around the country. Services include financing, procurement, warranty and disposal expertise, as well as maintenance and fleet management programs. The company has been in business for 30 years.
The new Southgate Capital does some of the same things from shared offices and with eight shared full-time employees, including the two Miotas and Peckarsky. "It really helps a small business get started when you can share infrastructure like this."
Explaining how the business works, Peckarsky says, "I run Southgate Capital and focus on smaller, more local vehicle fleets of one to 250 units. My ‘sweet spot’ is fleets from 10 to 100. But I also help companies acquire any business equipment, from forklifts to computers. Southgate Capital specializes in equipment leases ranging from $15,000 to $250,000, normally with a low buyout price at the end. It seems to working well, and business is terrific right now. We’ve grown from nothing in October 2002 to more than $3 million in assets."
As for timing, Peckarsky admits it could have been better, despite his good results. "I probably picked the worst economic situation, but I knew if I could find businesses that require good service and need access to capital, I could provide both," he notes.
"Companies are still looking to outsource some services they’re not experts in, especially when they’re downsizing. They do retain their sales and service people in tough times, and these folks are the ones who drive the vehicles and use the equipment we lease."
Southgate Capital maintains a good relationship with the Russ Darrow Group. "At the beginning, we purchased some of its contracts and picked up the Six Flags Amusement Park vehicle fleet," Peckarsky says. "Part of our growth on the equipment side is due to partnering with a local forklift dealer who asked us help its customers obtain capital and leases. When we do the lease, we develop a relationship with a new business customer, and this often leads to other leasing work."
He adds, "There’s a lot of cooperation in the leasing industry, too. Other leasing companies refer businesses to us at times, especially if the capital required is too large for one leasing company to cover."
By using strategic partnerships, adding experienced leasing professionals with a portfolio of established customer relationships and making out-of-state acquisitions, Peckarsky intends to grow Southgate Capital to $30 million in the next three years.
"We’re interested in helping small and larger businesses who have a need for access to capital at reasonable rates and like to deal directly with a decision-maker – me," he says. "We keep the paperwork simple and give customers fast answers. Often banks and other financial institutions can’t respond as quickly because they’re either not comfortable financing equipment, especially used equipment, or they have committees that must review all requests."
July 11, 2003 Small Business Times, Milwaukee
