When the owners of the automated teller machine manufacturer Triton Systems Inc. started out, they financed their business with personal savings and home equity loans.
"We tried every avenue and talked to plenty of bankers," Triton president Ernest Burdette said. "But a start-up business like ours has no assets, so you end up mortgaging your house and everything you own."
That was back in 1979. Today Long Beach, Miss.-based Triton is the third-largest ATM manufacturer in the country, with most of its 15,000 machines-mostly cash dispensers-in hotels, restaurants, and convenience stores. The company ranked 30th on Inc. magazine's 1997 list of the 500 fastest-growing companies in the country.
Although Triton also sells ATMs to banks, Mr. Burdette said none of his customers have offered to introduce him to their banks' lenders.
"When you talk about ATMs, you talk to people in the bank's operations or marketing side, and they don't try to sell you," he said. "They just think about their job, rather than the overall picture for the bank."
So when Mr. Burdette and his two partners needed financing last year, they turned to the financial adviser they knew best-the Merrill Lynch broker who handled their personal investments.
"There are a lot of places we could have gone, but we picked Merrill Lynch because of our personal relationship," Mr. Burdette said.
Triton's experience illustrates how nonbank competitors attract lucrative customers with personal relationships and creative financing.
Triton's broker in Gulfport, Miss., introduced executives of the ATM company to a division of Merrill Lynch in Chicago that helps growing businesses find venture capital financing. Triton got $17 million in equity financing from Summit Partners, a private venture capital firm in Boston.
Summit executives referred Mr. Burdette to BankBoston for a $28 million credit line. (Mr. Burdette said Triton tries to use the credit line as little as possible and repays it quickly.)
Triton is the type of business customer most bankers want-its sales increased more than 4,000% to $40 million in 1996 from $955,000 in 1992. The company now has 91 employees, up from 13 in 1992.
"As they grow, they'll need more services that we can offer," said Gregory O'Brian, director of corporate banking for BankBoston.
Mr. Burdette said Triton, which maintains deposit accounts with two local banks, is considering an initial public offering to generate additional capital.
Although Merrill Lynch didn't provide the financing for Triton, the brokerage firm received a set percentage of the $17 million Triton obtained and reinforced its relationship with the ATM manufacturer.
Sixty percent of the 44 banks surveyed by the Consumer Bankers Association cited Merrill Lynch as a primary competitor, an increase from 56% in 1996. Merrill Lynch also offers an interest-bearing deposit account that lets businesses invest excess funds.
"We go head-to-head," said Chevis C. Swetman, chairman, president, and chief executive officer of Peoples Bank, Biloxi, Miss., which has $447 million of assets.
Mr. Swetman said Merrill Lynch has attracted two of the bank's other small-business customers in recent years. He said he couldn't offer a credit line as large as the one Triton obtained from BankBoston.
