UNTRADITIONAL FUNDING SOURCES

This outline was used in a presentation to the attendees at the Application Development Center in Philadelphia on December 8, 1994 by Mark S. Bazrod.

What Are The Basic Functions Of A Leasing Company

  • Fund software/hardware purchases in return for payment over time
  • Take credit risk and software/hardware risk
  • Provide tailored solutions to customers needs
  • Provide a vendor the ability to offer the customer extended payment terms without having to finance the payments

What Is Software Leasing

Software leasing is a sales and marketing tool designed to provide software developers with a lease financing alternative for their customers. The result can be an increase in revenues, a decrease in sales time, and an increase in customer satisfaction levels.

It is also a method of paying for software over time instead of a single upfront payment and the functional equivalent of a loan from the leasing company.

Benefits to Customers

  • Obtain all the products and licenses that are needed now
  • Eliminate or reduce capital budget approval delays
  • 100% financing
  • Preserve bank lines - or eliminate need for a line
  • Consulting, hardware, customization, and training costs can be included in the lease
  • Easy to subsequently add or upgrade hardware, licenses, and consulting
  • Customer owns the license to use the software at the end of the lease
  • Simple documentation
  • For the large company - solution to capital budget delays
  • For the middle-size company - convenience
  • For the small or new company - an excellent source of funds (maybe)

Benefits to Software Developers

  • Shorten the sales cycle
  • Expand your customer base
  • Better satisfy customer needs - tailor the lease to the need
  • Improve your competitive and financial position
  • Gain you a competitive advantage
  • Obtain marketing support from your leasing company
  • Obtain increased revenues through flexible financing plans with upgrade provisions
  • Obtain an extensive financing program with no financial obligations on the part of the partner
  • Avoid obtaining bank lines to carry lease financing
  • Avoid establishing lease billing and financial lease accounting systems

How Do I Determine If a Leasing Program Will Benefit Me

  • Is your average sale greater than $5,000?
  • Do you sell direct to the user?
  • Are your customers of relatively high credit quality?
  • Do your customers normally lease hardware?
  • Do your customers have budget limitations?
  • Do your customers have financing limitations?
  • Is your license transferable?
  • Are your sales greater than $1,000,000?
  • Have you ever leased software or hardware - as a lessor?
  • Have you ever leased software or hardware - as a lessee?
  • Do you have the time to explore leasing with a leasing company?
  • Do you want to explore leasing with a leasing company?

If all or most of the answers are "yes", leasing software may well benefit you and your customers.

© LPI Software Funding Group, Inc.  

593 Cricket Lane, Suite 200     Wayne, PA 19087  

610.687.4434      610.341.6100   sales@lpilease.com
                         February 27, 2006