84% of office equipment dealer principals do not include their lease company in their suite of financial service providers.
They include their insurers, revolver banks, credit card companies, accountants, and even their inventory funding relationships with certain manufacturers. But no sign of the “lease company” provider in most cases.
Why? Perhaps this dealer from the Southeast said it best:
“The leasing company is not my provider. They’re a transactional provider to my customer. They don’t provide a financial or financing service to our company.”
That kind of thinking is common according to our survey. But could it unnecessarily limit opportunity for those dealers?
How Transactional Thinking Can Hold Dealers Back
A finance program should be far more than a series of transactions. A program provider should be in the trenches with you building programs to help you differentiate, market, close, and give your customers a reason to come back for more. If you see your current relationship as only a bunch of lease transactions, you are missing perhaps the biggest value a customer finance program could offer.
Helping You Sell Is a Financial Service
Nine of 10 office equipment sales are financed. In other words, your ability to get your products to market and drive revenues is dependent on financial services. And if the revenues don’t roll in, there’s not much need for all those other financial service providers that make the list.
Build a Better Stack
The capital stack usually includes your revolver bank, your ownership equity, and, depending on the size and complexity of your capital needs, private equity, investment banks, and manufacturers, among others. Not including your customer finance program is potentially shutting the door to what could be an important part of your capital stack.
Your customer finance provider is wildly competent at financing technology and fixed assets, yet eight of 10 dealers have never had a conversation with their finance program provider about funding their equipment, fleet, and technology needs.
More Than Customer Financing
Here’s just some of what you can do with the value-added components of the right kind of customer financing program:
- Grow recurring revenues without using your balance sheet
- Build a series of payment promotions
- Elevate your marketing efforts
- Integrate your billing technologies with your lease company for a better customer experience and more efficient operations
- Have an advisory conversation about maximizing the value of your business so as to prepare yourself for an active M&A market
What can the right kind of finance program do for your business? At LEAF, we help office equipment dealers think bigger and offer solutions that reach far beyond customer financing.