Tuesday, September 9, 2008

MFPs "14 Benefits of Leasing"

It's always good to review the basics, and to remember the basics when explaining equipment leasing to a client that is new to leasing office equipment. It's also not a bad idea to keep this in your portfolio!

1. Why Lease?
Leasing provides your customer with the use of the equipment for an agreed-upon monthly payment for a fixed term.

2. Tax Benefits:
Your customer can deduct their monthly lease payment as an operating expense. Leasing also helps them avoid the Alternative Minimum Tax (AMT) by reducing their AMT tax liability.

3. Flexibility:
Your customer can structure payments to fit their budget.

4. 100% Cost Coverage:
You can include “soft” costs such as shipping, software and installation right in the lease.

5. Technology Changes:
In three years the technology can and will change for the better. By leasing your customer will be forced to look at the new technology and see how it helps your customers business

6. Conservation of Capital:
If their money isn’t tied up in equipment costs, they are free to spend it on other items such as inventory, advertising or personnel.

7. Easier Cash Flow Forecasting:
Fixed monthly payments help your customer budget money into the future.

8. Fixed Payments:
They can lock-in payments now... and avoid the risk of inflation in the future.

9. Preserves Credit:
Leasing doesn’t tie up your customers line of credit. So you have more capital at your disposal
when you need it!

10. Longer Terms:
Many banks only lend money short-term, usually 12 to 36 months. But leasing lets your customer extend your term up to 72 months!

11. Purchase or Renewal Options:
At the end of your lease, they may choose to purchase your equipment, upgrade to
new equipment or continue to lease at substantial savings. Of course you do not want them to renew but you can write a service contract and keep them until they are ready.

12. Insurance:
Have your customer show proof of insurance at the lease signing or with the first bill and save them $5-$50 each month.

13. Service…Include it in Lease?
There are many opinions on this however there are a few things to consider. At 36 months, which is basically interest free it will not cost any extra to put the monthly service cost in the lease. At 48 or 60 it can cost the customer. Separate yourself from the competition and
break it out on a separate Cost per Copy Agreement. If you still include service in lease be very confident on the anticipated volume.

14. Return on Investment or (ROI):
Do a cost analysis including current machine capabilities, current CPC, supplies on printers, current lease, productivity & options they can have. Do they ever go to Kinko’s or Staples for copies? Show the customer a little savings and they will give you the key to the executive
washroom. If the cost is more stress productivity and keeping people in the office/desks and the new features and benefits.
-=Good Selling=-

1 comment:

Greg Walters said...

Good Sound points - and then some.

For this year, I have had two separate clients PURCHASE an MFP because of the Economic Stimulus Plan and the tax ramifications.

It is good to look into - but the technology issue, three years and the tech is obsolete, is an over riding concern...good post.