Adapt and Accommodate: Industry Lessors Focus on Long-Term Picture

In conjunction with this month’s State of the Industry focus on leasing, we’ve assembled an august group of standalone financing companies and industry manufacturer leasing arms to provide some behind-the-scenes perspective. They’ll shed insight into the modifications that have been essential to serving reseller partners and end-users during arguably the most unique and challenging business conditions during our lifetime.

Given these pandemic-induced challenges, from supply chain shortages to inflation and now rising interest rates, lenders have needed to reach deep into their creativity fonts to provide terms and conditions that address the needs of the lessee while enabling reseller partners to maintain profitability.

Participating in this roundtable are Jennie Fisher, senior vice president and general manager, GreatAmerica Financial Services; Shannon Stangl, head of regional sales, North America, DLL Office Equipment Global Business Unit; Christopher Chando, vice president finance, Ricoh USA; Bill Melo, vice president of marketing and strategic business development, Toshiba America Business Solutions; Michael Bennie, senior director, dealer and sales channel support, Canon Financial Services; Dan Kehr, senior vice president of revenue, FITTLE | Xerox Financial Services; David Palumbo, national director of technology and office imaging sales, CIT Business Capital (a division of First Citizens Bank); and Nick Capparelli, managing director, LEAF.

How have your leasing programs adapted in the face of pandemic-related issues, from forgiveness requests to supply chain challenges and now inflation?

Fisher: The last few years have certainly brought obstacles, but our strategy has remained unchanged—to listen to our customers and develop timely solutions.

In the early stages of the pandemic, many businesses came to a halt, and pressure on our dealer customer’s cash flow began to mount. We moved quickly to develop extension and deferral programs to ease pressure on our customers and the end-users.

As businesses opened back up, demand for devices was reinvigorated. However, inventory shortages called for temporary equipment solutions. With new equipment in short supply, demand for used equipment grew, driving up costs and placing added pressure on margins and bottom lines.

In response, we exercised more flexibility with our equipment returns, allowing customers more time so they could continue to book and upgrade contracts. In the meantime, dealers could supply end-customers with a mix of both used and new equipment to supplement until backordered devices arrived. As supply chain challenges persist, we continue to provide flexibility to our remarketers in the timing of equipment being received. We have a number of custom finance solutions our customers can take advantage of that help pull business forward, and we’re able to do that because of our independent ownership structure.

We have a number of custom finance solutions our customers can take advantage of that help pull business forward, and we’re able to do that because of our independent ownership structure.

– Jennie Fisher, GreatAmerica Financial Services

Finally, there’s great value in offering a monthly payment when it comes to combatting inflation. This is because it allows end-customers to lock in a price for an extended period: instead of worrying about potential inflationary costs, they’ll know their equipment price will stay consistent throughout the agreement term.

Stangl: We’re incredibly proud of our consistently strong service levels, going 35 years uninterrupted. Much of this can be attributed to keeping strong relationships with our partners and customers and adapting to meet their changing needs. Since 2020, there’s been more focus on ensuring efficient processes while not in a physical office and adopting more digital and automated solutions. There’s also been an emphasis on offering flexibility around new products to meet the new office landscape—especially amid supply chain challenges that are impacting nearly every industry. 

However, this flexibility is balanced with also sticking to tried-and-true elements such as judicious underwriting practices. Rather than underwriting based on current conditions during the pandemic (which can have long-term risks), we kept long-term relationships and goals in mind and avoided making drastic adjustments based on current conditions.

Chando: Ricoh Financial Services has a partnership with U.S. Bank that allows us to provide competitive leasing programs to our dealer community. We work collaboratively to provide information and resources that help our dealers support their customers through the current inflation and global supply chain challenges. We’ve worked together to offer solutions such as payment deferrals, payment restructuring, refinancing, lease extensions and other types of relief. Our goal is to give dealers the tools they need to support their customers as quickly and easily as possible through these difficult times.

We work collaboratively to provide information and resources that help our dealers support their customers through the current inflation and global supply chain challenges.

– Chris Chando, Ricoh USA

Melo: We’re doing what we can to help our customers and resellers during this uncertain time. Toshiba’s also striving to navigate the current challenges surrounding inflation and the supply chain as successfully as possible. We’re doing so in part by flying significant quantities of our e-STUDIO multifunction printers and accessories into the United States. We’re additionally implementing final-stage product manufacturing domestically. Toshiba is also uniquely positioned to avoid some of the supply chain issues by manufacturing toner here in the United States.

Toshiba’s also striving to navigate the current challenges surrounding inflation and the supply chain as successfully as possible. We’re doing so in part by flying significant quantities of our e-STUDIO multifunction printers and accessories into the United States.

– Bill Melo, Toshiba America Business Solutions

Bennie: Our affiliate Canon Financial Services (CFS) works very closely with the dealer network to make sure we address all their needs and concerns when issues arise. To support our dealers and their lessees, CFS has offered payment deferrals and relaxed collection practices to try to lessen end-user economic difficulties. Also, CFS extended expiration dates on aggressive promotions due to limited equipment availability. It also continues to offer competitive lease rates and promotions to help dealers manage the increased equipment costs that resulted from inflation.

CFS extended expiration dates on aggressive promotions due to limited equipment availability. It also continues to offer competitive lease rates and promotions to help dealers manage the increased equipment costs that resulted from inflation.

– Michael Bennie, Canon Financial Services

Kehr: Our priority was to listen and focus on our dealers and their customers’ pain points. We understand that leasing is about relationships for the long term, so we looked for ways to address specific customer situations with sensitivity. We got creative and found ways to address hardship conditions, such as waiving late fees or expanding credit card options. We coordinated teams of experts in enabling partners and customers to structure or defer payment plans, and to help them leverage government support programs for some relief as their businesses emerged and opened back up.

Our 40-year foundation in equipment leasing, combined with our networks of partners and deep relationships with vendors and OEM programs, enables us to expand into new product and technology leasing to support the dealer channel.

– Dan Kehr, FITTLE | Xerox Financial Services

Palumbo: There’s no question that the pandemic and associated shutdowns really hit the office imaging business. But we’re in this for the long haul, and we know that these events presented primarily short-term challenges. So we’ve focused on flexibility as our primary response. If we can help good businesses weather the storm, everybody wins. We have and will continue to develop specific programs to assist dealers in coping with these challenges. For example, we’ve created lease refinance programs for end-users and used-gear programs to help dealers impacted by supply chain issues. We’re all in this business together and getting through this period successfully is in everyone’s best interest.

We have and will continue to develop specific programs to assist dealers in coping with these challenges. For example, we’ve created lease refinance programs for end-users and used-gear programs to help dealers impacted by supply chain issues.

– David Palumbo, CIT Business Capital

Capparelli: Without hesitation, we reached out to customers and vendors to hear their challenges firsthand and work with them to develop custom solutions designed to meet the unique needs of each. Throughout the worst of the pandemic, we were able to support the stability and eventual recovery of their businesses with solutions built just for them. And the changes really were individual to each customer—the only rule we had was that there were no rules.

In our dealer solutions channel, the primary customer is our vendor partner and the lessee is our mutual customer. We went to great lengths to get feedback on the best ways to help these mutual customers weather the pandemic and emerge ready to continue their growth on the other side of it. Being able to get real-time insight from vendor partners on the front lines was immensely helpful in developing solutions to complex, pressing and, in some cases, unprecedented problems.

Obviously, extraordinary times demand extraordinary creativity and ingenuity. That’s what we offered vendor partners scrambling to ensure their customers would continue to receive terms that aligned with the often unprecedented pressure on their cash flow and budgets.

– Nick Capparelli, LEAF

When supply chain and inflation challenges began to impact our vendor partners and customers, we took the same approach, starting with the same questions: “What pain are you experiencing, and how can we assist?”
Based on the responses, we immediately began to review a number of options to help. This included an expansion of our LEAF CapitalAlliance program, which goes beyond equipment financing to offer inventory finance, growth capital, fleet financing, marketing programs, IT integration and strategic advisory capabilities. With this approach, we were able to support our vendor partners and customers across the business on all fronts, blunting the immediate business impact of the pandemic and speeding their recovery.

Talk about the consultative role you’ve played with the dealer community. What’s been the key to ensuring end-users are able to obtain leasing terms?

Kehr: Xerox’s financing business, FITTLE, is dedicated to our dealer partners’ success. You want every value-add available to enhance your sales results in today’s competitive marketplace, including access to full financial services capabilities. Our 40-year foundation in equipment leasing, combined with our networks of partners and deep relationships with vendors and OEM programs, enables us to expand into new product and technology leasing to support the dealer channel. Also, we can leverage our credit depth and strong approval rates to maximize opportunities and deal terms for our partners’ customers.

Bennie: As a captive leasing company for Canon U.S.A., CFS spends a large amount of time consulting with our dealers on issues that impact them in the marketplace. CFS credit policies and procedures produce industry-leading approval rates as well as flexible terms and conditions to ensure the dealers can provide customers with competitive leasing options. This allows them to have tremendous confidence that when they’re proposing leasing terms to their customers, they’ll be able to close and deliver on the equipment transaction.

Palumbo: As a long-term relationship leasing and lending business, we have many clients that we interact with regularly. This gives us unique visibility into the marketplace and enables us to provide existing clients with advice on what’s working and how to manage challenges. At the same time, our industry knowledge also empowers us to customize leasing terms that enable end-customers to get the equipment they need to grow their business and help dealers sell their inventory more quickly.

Melo: Toshiba’s staff and finance partners work collaboratively to structure promotions that best suit our resellers and end-users. Beyond providing affordable terms for our suite of products, we deliver similar financing for third-party equipment.

Capparelli: One of the most valuable aspects of our LEAF CapitalAlliance program is the strategic, consultative advisory capabilities it offers. The office technology dealer community is incredibly resilient and resourceful. It’s had to be, considering all the upheavals it’s had to deal with over the years. But the past couple of years turned the dial right up to 11, so to speak, confronting dealers with a degree of challenge that went beyond what many had ever seen, even those who’ve logged decades in the business. Obviously, extraordinary times demand extraordinary creativity and ingenuity. That’s what we offered vendor partners scrambling to ensure their customers would continue to receive terms that aligned with the often unprecedented pressure on their cash flow and budgets. But we also put that ingenuity to work in supporting cross-selling and other tactics to sustain revenues in the face of enormous marketplace upheaval and accelerated evolution.

Chando: We leverage some best practices from our direct sales organization to bring our dealer community similar options and solutions via our leasing partners. This includes refinancing, designing lower monthly payment plans via refinance and finding creative ways to commence leases when parts are held up due to supply chain issues. We’re committed to offering our dealers ample flexibility on payment terms, collaborating with partners to balance cash flow and inventory delays accordingly. This enables us to help leases to be fully funded even when product parts haven’t yet been delivered due to inventory delays or other unexpected issues.

Regular, open communication with our dealer community has been key to our success in arming our dealers with the resources and information they need to support their customers effectively. We also communicate closely with U.S. Bank and other third-party leasing organizations to ensure everyone is up to date with the latest information and has a clear line of sight to potential challenges.

These efforts are part of our ongoing dealer communications strategy, which includes daily updates from a field perspective and monthly updates from Ricoh leadership. We also provide regular access to training events, marketing opportunities and sales kits to support our dealers with agility and speed as their needs shift and evolve through these challenging times.

Stangl: DLL has long placed high importance on remaining closely connected to our partners and customers and working together to find the right solutions. Over the last couple years especially, keeping dealers in the loop on new assets and trends has been a key part of this approach. We’ve supplied them with market research, data and insights on what’s most pressing and relevant now in the office equipment space—from interest rate changes to supply chain updates. 

The goal is to arm them with the tools to form deeper, more trusted relationships with their customers by keeping them informed. Working together with customers to find the right solution is often key to helping dealers make the sale and grow their businesses.

Working together with customers to find the right solution is often key to helping dealers make the sale and grow their businesses.

– Shannon Stangl, DLL Office Equipment Global Business Unit

Fisher: The challenges our customers experience continue to evolve, and we embrace that. Our objective is to support their opportunities with end-user customers. One example of this is our end-of-term reports provided via our customer portal, which give our customers visibility to upgrade opportunities in their pipeline.

As an independent, we’ve been able to identify flexible solutions to help our dealers secure opportunities, even amid supply chain challenges, while minimizing the impact on margins and cash flow. As it relates, we’ve created financing solutions that enable our dealer customers to keep their customers up and running with existing technology while waiting for backordered equipment to arrive.

Additionally, our flexible programs provided economic assistance and protected monthly pass-through revenues for our dealers.
We brought the right education at the right time. As the pandemic hit, we provided CARES Act and Paycheck Protection Program resources via our website, webinars and blogs.

Our support and partnership have earned us a position as a value-added resource to technology providers navigating through these last few years, and I think our reputation as a trusted advisor has only grown more prevalent as a result.