Mind the Gap
For any business managing cash flow and maintaining an excellent level of working capital in the business is a priority. However, to remain competitive in their industry all companies need to ensure they are using the latest technology. These purchases can prove hugely expensive and cause a business to have to make compromises on the asset/solution due to budgetary restraints. Leasing provides the means to close the gap between the ideal solution and option that could be afforded if the purchase was dependant on pure capital expenditure.
It is widely accepted now that it is the use of the asset that is important not the ownership. In order to grow and develop a business just needs access or the ability to use the latest technology and there is no value to be gained in owning the asset. Why would you want to own an asset that will reduce in value every day, losing money from day one of the purchase? As the billionaire J Paul Getty stated, “If it appreciates, buy it. If it depreciates, lease it.”
There is no need to use capital expenditure to make any asset purchases. It is far better to keep the capital within the business and achieve a greater return on capital employed (ROCE). There is also no need to use credit facilities with your business bank such as overdraft facilities, credit cards and loans. Again, it is far better to save these credit lines for other purposes. All businesses should therefore use leasing to make the asset purchases to help them to thrive, drive growth and allow development.
Benefits of leasing:
- Offset the payments against taxable income saving corporation tax
- Purchase higher specification assets than budget dictates
- Maintain cash flow by avoiding large capital outlays
- Low fixed rate repayments
- Invest in other areas with a return on capital employed
- Manage and upgrade obsolescent assets
- Avoid owning depreciating assets
As a reseller leasing can allow you to close the gap for your customers. Providing flexible financial options for the purchase can mean that all budgetary objections and restraints can be negated, and sales revenue increased.
Our partners who are proactively offering leasing on every quote benefit from:
- Increased sales: proactively offering a leasing option avoids price objections and allows you to up sell additional products and services with minimal increases to the customer repayments.
- Partner Portal: sales people are allocated individual portal logins allowing them to email branded pdf quotes to customers, submit proposals and track their activity.
- Customer retention: leasing improves customer retention with increased control of renewals and upgrades, allowing you to be ahead of your competitors.
- Increased cash flow: invoices are automatically paid within 24 hours removing the risk of bad debt and the need to chase payments.
- Improved customer service: offering leasing as an alternative to cash demonstrates that you are considering your customers business needs assisting in developing long-term relationships.