![\"\"](\"http:\/\/www.enxmag.com\/twii\/wp-content\/uploads\/2017\/05\/16-Jennie-Fisher.jpg\")
Jennie Fisher, GreatAmerica<\/p><\/div>\n
Those advantages of pure-play lessors must be weighed against higher rates. \u201cThe biggest objection we hear is about our rates. We\u2019re competitive, but not the lowest,\u201d said Jennie Fisher, Senior Vice President and General Manager, Office Equipment Group at GreatAmerica Financial Services. She added that dealers that work with GreatAmerica do so because they appreciate the added value the company can bring for the term of the lease.<\/p>\n
That value is embodied in what GreatAmerica calls its Customers for Life principle. \u201cWe have always understood that the protection of our dealers\u2019 customer base is vital,\u201d said Fisher. \u201cOur innovative products, programs, and tools help our dealers achieve their goals and differentiate in their markets. An example is our industry leadership with technology integrations that allow our dealers to run their business more effective and efficient, while remaining in their system of choice.\u201d<\/p>\n
We have always understood that the protection of our dealers\u2019 customer base is vital. \u00a0Jennie Fisher: Great America<\/em><\/p><\/blockquote>\n
Bob Hunter, DLL<\/p><\/div>\n
Bob Hunter, Senior Vice President of Sales, Office Technology for Lessor at DLL, agrees. \u201cThe biggest asset a dealer has is its customer base,\u201d he said. He sees DLL\u2019s role as a partner that can help the dealer attract and retain customers, and it is well positioned to do so because DLL is focused solely on vendor finance, and Hunter\u2019s group only on the office equipment industry. \u201cWe continue to invest in the segment and in long-term relationships with dealers,\u201d he said.<\/p>\n
Those investments are designed to provide total solutions that can accommodate small to large lease deals. Much of DLL\u2019s investment is going into technology. \u201cIt\u2019s about how we connect. That could be APIs [application programming interfaces] that allow different systems to talk to each other or mobile enablement,\u201d said Hunter.<\/p>\n
Fred Carollo, EverBank Commercial Finance<\/p><\/div>\n
Banks tend to have the lowest cost of funds and better fund availability because of their depository nature. That could be a big advantage for dealers who need to price aggressively. The disadvantages of dealing with a bank-owned lessor are the additional regulations. \u201cIt creates some challenges at times from credit underwriting and structuring transactions,\u201d said Fred Carollo, Vice President of Originations, Office Products at EverBank Commercial Finance.<\/p>\n
EverBank started out as an independent and was acquired by a bank, and Carollo believes this allows the company to offer the advantages of both. \u201cAs an independent, we developed a lot of creative financing products that we\u2019ve been able to keep,\u201d he said. \u201cWe now have the benefits of being bank-owned, which include pricing and consistency of having capital.\u201d<\/p>\n
Ralph Petta, ELFA<\/p><\/div>\n
Some manufacturers have their own captive leasing and financing units to support the placement of their products in businesses. \u201cThere\u2019s nobody that knows the asset, the equipment, better than the OEM, and that translates into, in many cases, a lower financing rate. They have such keen knowledge of the secondary markets that they are able to successfully remarket that asset, and they know the customer needs. Having in-house finance capability many times presents an advantage for the captive manufacturer or vendor,\u201d said Ralph Petta, President and CEO of the Equipment Leasing and Finance Association (ELFA).<\/p>\n
Canon Financial Services (CFS) is one example. \u201cAs a captive, our charter is to support and assist with the placement of Canon equipment and to create unique financing options that support the overall health and profit margins of the manufacturer,\u201d said Dominic Janney, Vice President of Sales and Servicing for CFS. \u201cWe understand the complexity of the sales of all our equipment types and work closely with all the sales channels to offer products that will result in the placement of more Canon equipment.\u201d<\/p>\n
Dominic Janney, CFS.<\/p><\/div>\n
He added that all CFS products and promotions are created in collaboration with Canon\u2019s direct and indirect channel partners. \u201dThis open and direct dialogue with our partners presents us with opportunities to expand our products, create unique programs, and allow us to develop quicker and more efficient processes which will ultimately lead to increased sales,\u201d said Janney.<\/p>\n
A few dealers provide their own funding for leases, either exclusively or alongside options from leasing partners. For some, the decision was made out of necessity. \u201cYou have to go back to 2008,\u201d said Mike Sarelson, President and Owner of Commonwealth Digital Office Solutions. \u201cThat\u2019s when the financial crisis hit, and almost everybody was being turned down. We were really scared\u2014all of our machines were financed and we couldn\u2019t get financing. We had no choice. Fortunately, we had the money to do it.\u201d<\/p>\n
That decision has paid off for Commonwealth. Its in-house lease portfolio is now $10 million, although the company still works with other lessors for accounts that don\u2019t meet its criteria for in-house financing. \u201cWe only take 60-month leases and we only take new businesses,\u201d said Sarelson. He added that 60-month leases are preferable to 36-month leases because \u201cThe interest rates are just not high enough for us to bother with.\u201d<\/p>\n
For Commonwealth, the hard part of setting up an in-house leasing unit was the initial investment. The company did not have to hire additional staff. One person handles the paperwork for both in-house and outside leasing, and the sales team works out terms with customers. Commonwealth already had people doing collections and rolled collections for leases into their duties.<\/p>\n
Mike Sarelson,
Commonwealth<\/p><\/div>\nThe Commonwealth sales team plays a big role in the leasing process. \u201cOur sales guys can go directly to the leasing companies,\u201d said Sarelson. \u201cThey can call DLL, Everbank, Wells Fargo, and they can negotiate a cheaper rate. We don\u2019t bump the rate to the customer, and we don\u2019t bump the rate to the salesman. I don\u2019t know if there\u2019s any other dealer that does it like that.\u201d For Sarelson, this approach keeps the monthly lease rate lower for the customer, and it takes pressure off of sales to discount to meet a competitor\u2019s price, which in turn would eat into commissions.<\/p>\n
Even without bumping the rates, he sees plenty of upside in the interest earned from the lease and the tax benefits. \u201cYou get interest plus depreciation on the equipment, so the tax benefits are fabulous. On a $10 million portfolio you can get $500,000 tax free. It\u2019s a great place to put money. When you own your own leasing company, you have the product on both ends. You\u2019re the seller and the buyer, you can\u2019t get hurt. It\u2019s not the best return in the world, but it\u2019s very, very safe.\u201d<\/p>\n
We don\u2019t bump the rate to the customer, and we don\u2019t bump the rate to the salesman. \u00a0Mike Sarelson, Commonwealth<\/em><\/p><\/blockquote>\n
Mike Ullsperger,
Gordon Flesch<\/p><\/div>\nGordon Flesch is one of the largest dealerships in the US, and it has used its own captive leasing unit, GFC Leasing, for 50 of its 60-year history. The reason can be summed up in one word: control. \u201cWe could have used third parties, but we would have had no control over the customer\u2019s experience,\u201d said Mike Ullsperger, Vice President of Leasing at Gordon Flesch. \u201cDoing our own leasing allows us to meet GFC\u2019s and customers\u2019 expectations on invoicing and servicing. We want the leasing experience to be similar to the sales and service experience.\u201d<\/p>\n
Ullsperger said that Gordon Flesch will use a third-party lessor in certain situations, such as when the transaction is extremely price sensitive. \u201cWe have to have a minimum yield,\u201d he said. \u201cWe\u2019ll utilize financial institutions or CFS in these instances, because they have access to lower-cost capital.\u201d<\/p>\n
We want the leasing experience to be similar to the sales and service experience. \u00a0Mike Ullsperger, Gordon Flesch<\/em><\/p><\/blockquote>\n
GFC Leasing currently has about 8,600 leases in its portfolio, and once a lease is in the portfolio, it\u2019s never sold, said Ullsperger. About 75 percent of Gordon Flesch\u2019s customers have leases.
\nAll sales reps at Gordon Flesch go through a training program that stresses the value of GFC Leasing products and teaches the components of leasing, said Ullsperger. This training helps them understand things like how flexible they can be with terms, or when to offer quarterly or monthly payments.<\/p>\nWorking with Lessors<\/strong><\/p>\n
Michael D\u2019Errico,
CIT<\/p><\/div>\nWhen it comes to the core underlying qualities of a strong dealer\/lessor relationship, CIT\u2019s D\u2019Errico summed it up in three words: \u201calignment and trust.\u201d He continued: \u201cTrust meaning capability and integrity. It\u2019s the trust that you\u2019re going to take care of their customers during the three, to four, to five-year term of that lease. The customer will have a positive experience during that and will want to stay with that copier provider for their next equipment deal.\u201d<\/p>\n
You can\u2019t have alignment or trust if the lessor does not understand the dealer both culturally and from a business perspective. \u201cIf you\u2019re talking to a family\u2011owned business and the goal is to pass it along in their family, they want to approach their business in their community a certain way, versus those who are looking to operate for three to four years and then sell the dealership,\u201d said D\u2019Errico. \u201cHow they go to market, what\u2019s important to them on the two examples, are very different. We have to make sure we are aligning what they need from their finance partner with what we offer them.\u201d<\/p>\n
We have to make sure we are aligning what they need from their finance partner with what we offer them. \u00a0Michael D’Errico, CIT<\/em><\/p><\/blockquote>\n
To ensure that alignment, the CIT sales team focuses on the dealers\u2019 goals. \u201c\u2018What are your goals?\u2019 It\u2019s a more thoughtful question. You\u2019re going to learn more about them and that\u2019s a better opportunity to align,\u201d said D\u2019Errico. \u201cIt also gives us insight into what we should be developing, or the things that we do today that match up that they\u2019re not even aware of. If we ask a standard question, we\u2019re going to get a standard answer, and we\u2019ll never get to a more important partnership and resolution that way. But asking more thoughtful questions has worked very well for us.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Dealers have several choices for funding sources: a financial firm that specializes in equipment leasing, a bank, or in-house. Most dealers use a combination of these options as it gives them the greatest flexibility in meeting their customers\u2019 needs, and it sets up a little competition on rates among lessors. Leasing specialists boast a deeper understanding of the channel\u2019s needs, the products it sells, and its market. \u201cWhat we don\u2019t want to be is just a leasing company. We want to understand what [our clients] are trying to do and align with those goals. A high percent of their business is repeat customers, and those customers go back to them based on how the equipment worked, how they performed, and how we performed,\u201d said Michael D\u2019Errico, Office Imaging Commercial Leader at CIT. \u201cWe have to be a part of why that customer goes back. That\u2019s really more a cultural thing.\u201d Being focused allows for operational advantages, too. \u201cWe have our whole servicing in one building, from origination through booking, credit, customer service, collections, end of lease, and everything in between\u2014accounting, financial reporting, marketing,\u201d said D\u2019Errico. \u201dIt makes us consistent in our service and also it makes our whole employee base understand the business, so it drives the culture.\u201d Those advantages of pure-play lessors must be weighed against higher rates. \u201cThe biggest objection we hear is about our rates. We\u2019re competitive, but not the lowest,\u201d said Jennie Fisher, Senior Vice President and General Manager, Office Equipment Group at GreatAmerica Financial Services. She added that dealers that work with GreatAmerica do so because they appreciate the added value the company can bring for the term of the lease. That value is embodied in what GreatAmerica calls its Customers for Life principle. \u201cWe have always understood that the protection of our dealers\u2019 customer base is vital,\u201d said Fisher. \u201cOur innovative products, programs, and tools help our dealers achieve their goals and differentiate in their markets. An example is our industry leadership with technology integrations that allow our dealers to run their business more effective and efficient, while remaining in their system of choice.\u201d We have always understood that the protection of our dealers\u2019 customer base is vital. \u00a0Jennie Fisher: Great America Bob Hunter, Senior Vice President of Sales, Office Technology for Lessor at DLL, agrees. \u201cThe biggest asset a dealer has is its customer base,\u201d he said. He sees DLL\u2019s role as a partner that can help the dealer attract and retain customers, and it is well positioned to do so because DLL is focused solely on vendor finance, and Hunter\u2019s group only on the office equipment industry. \u201cWe continue to invest in the segment and in long-term relationships with dealers,\u201d he said. Those investments are designed to provide total solutions that can accommodate small to large lease deals. Much of DLL\u2019s investment is going into technology. \u201cIt\u2019s about how we connect. That could be APIs [application programming interfaces] that allow different systems to talk to each other or mobile enablement,\u201d said Hunter. Banks tend to have the lowest cost of funds and better fund availability because of their depository nature. That could be a big advantage for dealers who need to price aggressively. The disadvantages of dealing with a bank-owned lessor are the additional regulations. \u201cIt creates some challenges at times from credit underwriting and structuring transactions,\u201d said Fred Carollo, Vice President of Originations, Office Products at EverBank Commercial Finance. EverBank started out as an independent and was acquired by a bank, and Carollo believes this allows the company to offer the advantages of both. \u201cAs an independent, we developed a lot of creative financing products that we\u2019ve been able to keep,\u201d he said. \u201cWe now have the benefits of being bank-owned, which include pricing and consistency of having capital.\u201d Some manufacturers have their own captive leasing and financing units to support the placement of their products in businesses. \u201cThere\u2019s nobody that knows the asset, the equipment, better than the OEM, and that translates into, in many cases, a lower financing rate. They have such keen knowledge of the secondary markets that they are able to successfully remarket that asset, and they know the customer needs. Having in-house finance capability many times presents an advantage for the captive manufacturer or vendor,\u201d said Ralph Petta, President and CEO of the Equipment Leasing and Finance Association (ELFA). Canon Financial Services (CFS) is one example. \u201cAs a captive, our charter is to support and assist with the placement of Canon equipment and to create unique financing options that support the overall health and profit margins of the manufacturer,\u201d said Dominic Janney, Vice President of Sales and Servicing for CFS. \u201cWe understand the complexity of the sales of all our equipment types and work closely with all the sales channels to offer products that will result in the placement of more Canon equipment.\u201d He added that all CFS products and promotions are created in collaboration with Canon\u2019s direct and indirect channel partners. \u201dThis open and direct dialogue with our partners presents us with opportunities to expand our products, create unique programs, and allow us to develop quicker and more efficient processes which will ultimately lead to increased sales,\u201d said Janney. A few dealers provide their own funding for leases, either exclusively or alongside options from leasing partners. For some, the decision was made out of necessity. \u201cYou have to go back to 2008,\u201d said Mike Sarelson, President and Owner of Commonwealth Digital Office Solutions. \u201cThat\u2019s when the financial crisis hit, and almost everybody was being turned down. We were really scared\u2014all of our machines were financed and we couldn\u2019t get financing. We had no choice. Fortunately, we had the money to do it.\u201d That decision has paid off for Commonwealth. Its in-house lease portfolio is now $10 million, although the company still works with other lessors for accounts that don\u2019t meet its criteria for in-house financing. \u201cWe only take 60-month leases and we only take new businesses,\u201d said Sarelson. He added that 60-month leases are preferable […]<\/p>\n","protected":false},"author":115,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1641],"tags":[],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/23956"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/115"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=23956"}],"version-history":[{"count":9,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/23956\/revisions"}],"predecessor-version":[{"id":24152,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/23956\/revisions\/24152"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=23956"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=23956"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=23956"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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