80% of American companies, including 65% of the Fortune 1000,
use leasing to acquire computer hardware and a wide assortment of
other assets. Roughly 32% of all equipment acquisitions are
financed through leasing transactions. Leasing has long been an
accepted part of financing asset acquisitions.
This page is designed to explain the benefits of leasing and
assist you, whether you are a user, vendor or sales
representative, in making an informed judgment as to whether in a
particular transaction leasing makes sense, satisfies your
needs, and provides you with real benefits.
- Budget/P&L Considerations.
Eliminate or reduce capital budget approval delays.
Most lease payments can be kept in the operating budget
so you donít have to go through a potentially
time-consuming capital expenditure approval process.
Improve ROA and ROI measurements.
Off-balance sheet financing (the lease is in the
operating budget) and level payments tend to improve ROA
and ROI measurements and other key financial ratios.
Eliminate upfront costs.
LPI will finance just about everything, so your upfront
expenses should be negligible.
- Cash/Financing Considerations.
Obtain a new source of funds.
Leasing often unlocks additional funding sources which
look at the asset leased and so often does not affect the
availability of your bank lines.
Lessors normally offer 100% financing so there is no down
payment and you preserve your working capital.
Fixed rate financing.
Financing at current rates means you are not adversely
affected by higher interest rates in the future (but you
donít get the benefit of future decreases).
Obtain the flexibility of customized payment.
You normally can obtain a payment structure tailored to
your unique needs.
- Convenience Considerations.
Lease terms and payment structures can be
tailored to meet customer needs.
You can obtain one to seven year leases with level
payments monthly, quarterly, or even annually. And
payments can be easily tailored to specific budget or
cash flow needs. You can even get a lease where you vary
the payments with your future business requirements.
Often simpler and faster than a bank line.
Why? Because most leasing companies tend to be less
institutional than banks - most of the time.
Often better than a bank loan; no compensating
balances, no down payment, fast and convenient.
True most of the time, but not always. Many factors go
into the choice.
Negotiable leasing structures can comply with
Leasing is an inherently flexible tool which can normally
be structured to comply with requirements of your loan
agreements or other arrangements.
The LPI lease is fair and understandable; negotiations are
Fair, readable, non-legalistic documents with no hidden
obligations or payments make life a lot easier for all of
us; negotiations are a lot shorter and you get what you
Easy to subsequently add or upgrade licenses,
equipment, and consulting.
With a one-page lease incorporating a master lease by
reference, a phone call is just about all you need to
lease additional items or upgrades.
- Increase your sales efficiency; Reduce your
Eliminate or reduce
capital budget approval delays.
Capital budgets are a problem in a lot of large
companies, particularly when the pace of change makes long
range planning difficult. Leasing can often convert an
acquisition into an operating expense and shorten the
Offer the convenience of leasing as a sales
Leasing is a major sales tool in many industries.
However, many users are not aware they can lease software
and so donít ask even when it could be very helpful.
Fast turnaround from LPI.
LPI Software Funding Group will respond in 2 hours to
requests for credit approval or lease rates. We are there
to assist you in expediting the sale.
Overcome cost objections.
When the total cost seems too high, payment over time,
particularly when it's tied to the period of benefit,
often can be a win-win solution for everyone.
Build repeat business.
Makes it easy for your customers to keep ordering from
you as their needs grow. The LPI Master Lease Agreement
with one-page add-on leases allows you to offer to users
additional products with minimal financing effort by the
Generate larger individual sales.
When the need is there, but the dollars for total
implementation are not, a lease can serve as a means to
stretch the dollars. And include multi-year maintenance
in the lease.
- Better satisfy customer needs.
the payment for the asset to its period of benefit.
Customers often prefer the payment be related to the
benefit of the asset. Leasing is one way to do it.
Offer both upfront payment and term financing
Your customers have different cash flow and budgetary
needs. Offer them a choice.
Offer a proposal tailored to customerís
Leasing is an inherently flexible tool and payments can
be easily tailored to specific needs. Payments may be
monthly, quarterly, or even annually. LPI can even
provide the customer with a lease where its payments vary
with its current business requirements.
- Expand your Customer Base.
different leasing programs to different type customers.
The early adaptor and the early majority often require
different type leases. And so do large and small
customers. Leasing allows you to more easily accommodate
the different needs and proactively offer solutions.
Make the acquisition of the asset more
Whether itís a car or software, a monthly payment is
always more affordable than 100% payment upfront.
Better satisfy customer needs.
See Section 2 above.
- Improve your competitive and financial
Become an industry
leader by offering leasing.
Industry leadership has many facets; offering leasing is
one. You have an advantage over those who donít
offer leasing and you neutralize the advantage of those
Using LPIís financing programs requires
no financial obligation on your part.
We both invest some time to see if leasing would be
advantageous to you and your customers. If it appears to
be, we start and there are no minimums or financial
obligation on your part.
Reduce your days sales outstanding.
Many financial analysts look at Days Sales Outstanding
(DSO). Using our leasing programs means you are not
carrying long-term receivable and you are decreasing your
SALES REPRESENTATIVE BENEFITS
- Help close the sale.
Leasing helps you overcome budget, cost, cash and
other obstacles. It allows you include other costs (hardware, training,
installation and customization) in the lease and accelerate your
customerís approval and implementation of the project.
- Avoid delay until cash or budgets available.
Capital budgets are a
problem in a lot of large companies, particularly when the pace of
change make long range planning difficult. Leasing can often convert an
acquisition into an operating expense and shorten the approval cycle.
- An immediate sale.
Leasing will allow a user to acquire all needed
seat licenses immediately and get all the benefits of full
implementation across its operations instead of gradually increasing the
utilization to more employees as funds become available.
- Provide a response to price objections.
When the total cost
seems too high, payment over time, particularly when its tied to the
period of benefit, often can be a win-win solution for everyone. If the
customer has limitations on available funds and those funds are not
sufficient to acquire the full extent of the software needed to
implement a new business strategy, then leasing becomes a viable
- Facilitate repeat business.
Leasing makes it easy for your customers to keep
ordering from you as their needs grow. The LPI Master Lease Agreement
with one-page add-on leases allows you to offer to users additional
products with minimal financing effort the user.
- Sell a monthly payment instead of a cash price; avoid
upon the customer and the project, a monthly payment may be a more
appropriate sales approach - particularly if special payment variations
- Upgrades easily available.
Once a master lease is in place, the administrative
process to obtain additions and upgrades is simplified.