since it provides opportunities to offer advice and assistance with end-of-lease/ financing term decisions such as whether to purchase new or existing equipment. In addition to developing follow-up selling opportunities, it helps build long-term relationships for repeat business.
3. It provides incremental income Providing a financing option can offer
benefits, including facilitating equipment sales and generating additional revenue. In addition to an increase in interest income, additional revenue may be generated if the equipment can be sold for more than its remaining book value at the end of lease.
4. It creates value Offering financing creates value for
your customers by saving them money, getting them better terms, and helping them stay current. One way they save money is through the manufacturer's knowledge of the equipment and ability to resell pre-owned equipment. This may enable the manufacturer to take additional
risks on the residual value, which lowers the customer's monthly payment. Customers may get better terms
when they purchase equipment that might be otherwise delayed because of lack of financing elsewhere, and the manufacturer is willing to provide better financing terms. Additionally, value is created when a customer takes advantage of leasing/financing since it eliminates the risk of them owning equipment that is technologically obsolete.
5. Industry expertise is available to assist you An important consideration about
offering financing is that there is plenty of assistance that can help you determine and establish the captive financing option that's appropriate for your business. The non- profit ELFA has an online "Manufacturer & Vendor Resource Center," which contains strategic, legal, financial and operational topics that manufacturers should consider when developing or enhancing their finance capabilities. The website also contains searchable databases
to find financing partners and service providers to assist you. Increasing knowledge of captive financing among small and medium-sized manufacturers and vendors will pave the way to greater growth opportunities for their businesses and the economy.
William G. Sutton, CAE, is President and CEO of the Equipment Leasing and Finance
Association (ELFA), the trade association that represents
companies in the $628-billion equipment finance sector, which includes financial services companies and manufacturers engaged in financing capital goods. ELFA has been equipping business for success for more than 50 years. For more information, visit www.ELFAOnline.org. © Equipment Leasing and Finance Association 2012. Reprinted with permission.
OPE
OUTDOOR POWER EQUIPMENT NOVEMBER 2012 21
