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Manufacturer’s Needs and Objectives: Financial
UPFRONT REVENUE/INCOME
Achieve “sales treatment” for equipment leased to end-users
LOW OPERATIONAL RISK
Employ “best-in-class” business processes
Leverage economies of scale
Automate credit decisioning,
Web-enable origination and credit approval
LOW FUNDING COST
Low cost of funds
OFF-BALANCE SHEET FUNDING
Increase debt capacity
Accelerate cash flow
Improve liquidity
MINIMAL USE OF OWN CAPITAL
Achieve high ROIC, ROE
REDUCED CREDIT RISK
Minimize credit risk exposure
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Manufacturer’s Needs and Objectives: Strategic/ Marketing
CUSTOMER RELATIONSHIP
Maintain direct interface and customer intimacy at:
- Front-end: sales, credit underwriting, administration
- Back-end: billing, collection and customer service
PRICING FLEXIBILITY
Use financing incentives to subsidize equipment sales
Use pricing to manage equipment lifecycle: incremental sales, upgrades, renewals, etc.
MORE FINANCING ALTERNATIVES
Offer better and more competitive financing alternatives to end-user customers
EQUIPMENT REMARKETING
Control after-market for the off-the-lease equipment
OWN BRAND
Leverage own market image/brand
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