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As an ACFA consultant, you have already assisted your clients in solving their cash flow issues. Now you can take your relationship to the next level by helping them sell more of their product.
A vendor-leasing program will always increase both unit sales and transaction size for your client. In a vendor-leasing program, a leasing company forms a relationship with a vendor (your client) to help him market his product. For that assistance, the vendor agrees to offer a leasing option through that leasing company on every product he sells. A leasing program is as simple as providing your client with the tools to offer a lease payment alternative with every proposal.
Most major leasing companies actively pursue vendors. However, some of these leasing companies require $15,000,000 or $25,000,000 in yearly volume before they will discuss a vendor-leasing program. Clients that have yearly volume in the $4,000,000 to $15,000,000 range are not in the niche interest to larger leasing companies. This arena can be an excellent opportunity for the cash flow consultant to deepen their relationship with a client by introducing that client to a smaller leasing firm that is willing to develop a vendor-leasing program with that client.
You know that your client sells computer hardware and software. If your client makes both cash and lease sales, a vendor-leasing program may work for him. First, you must determine what percentage of his sales are in leasing. If it is more than $1,000,000 a year, you need to determine what kind of leases he is doing. At this point your client may be doing what is known as “one off leases” with several leasing companies or could be using a primary leasing source. With that volume, he could be a prospect for a customized vendor-leasing program.
Here are some examples of successful vendor-lease programs from a leading leasing company:
Equipment Distributor
$8 million annual supplier of high-end automated systems
Sells 30 systems per year
Provides installation, service and support to systems
Began offering a lease/rental program for clients with a stable monthly payment for the systems and service.
Average lease transaction size is $135,000
Commission to vendor — none needed!
Referral fee to cash flow consultant — $500 per transaction
Telephony Interconnect Company
$20 million annual supplier of telephone systems and services
Sells 250 systems per year
Provides installation, maintenance, and support services
Began providing a lease payment quote with every proposal, saw a 23 percent increase in unit sales and an 11 percent increase in transaction size due to offering leasing as a convenience to their buyers.
Average lease transaction size $65,000
Commission to vendor — $700 per transaction
Referral fee to cash flow consultant — $300 per transaction
Automotive Repair Equipment Manufacturer
$200 million annual sales
400 lease transaction per year
Average lease transaction $18,000
Commission to vendor — $180 per transaction
Referral Fee to cash flow consultant $200 per transaction
Now, here are the questions you should ask to pre-qualify your prospect:
Does your current leasing company(s) offer you any marketing materials or marketing partnership programs to help you stimulate sales?
Has your current leasing company(s) developed a “service concept” to help you close more deals quickly?
Would you be willing to speak with a leasing company that can offer you “outside the box” funding solutions, approval of tough deals, and timely funding?
Two nos and a yes are the only responses you need to realize this could be a great prospect for a customized vendor-leasing program.
If your client qualifies, simply contact a leasing company that is willing to set up a program for your client. You can expect to receive an ongoing commission/referral stream from each transaction that closes.
In the leasing business it is not unusual to see a 20 percent increase in sales revenue following the implementation of a well-managed vendor-leasing program. As your client’s sales increase, so will their needs for the other financial services you offer.
Source: American Cash Flow Journal
Author’s Information: Dan Volungis is territory manager for Leasing Partners Capital. He can be reach by phone at 877-525-5550, by fax at 877-525-5551, and by e-mail at dvolungis @leasingpartnerscapital.com. The company’s Web site is www.leasingpartnerscapital.com.

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