Why leasing pays for CCTV equipment sellers

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Wednesday, October 1, 2003

Everywhere you look today
equipment sellers are offering products for a monthly payment rather than selling the equipment for a lump-sum payment. Several of the reasons are listed below, however, the number one reason a monthly payment is sold is that leasing makes it easier to get the equipment you need today for a low monthly payment.

Let’s review the following hypothetical case scenario:

Joe’s Restaurant needs a new CCTV system which costs about $7,500. If Joe’s leases this over 60 months, his monthly payment will be approximately $170. Do you think Joe’s would prefer to write a check for $170 or $7,500? You better believe he would rather write a check for $170. If you ask for $7,500, Joe’s will negotiate you down to $7,000. Leasing will also provide Joe’s with the following benefits:

- Protect the lifeblood of his business, which is his cash flow. Unlike bank financing, which requires large down payments, equipment leasing only requires one monthly payment in advance.

- Since Joe’s is now leasing the equipment, there will be significant tax savings, which further reduce the actual monthly payment.

- The affordability of leasing will enable Joe’s to buy the equipment they need instead of getting a cheap system that won’t provide the security they need. The monthly savings Joe’s will have from reductions in theft prevention and increased employee productivity will more than offset the monthly lease payment.

- The low monthly lease payment includes coverage for loss and destruction insurance.

- Additionally, unlike an auto lease, Joe’s can acquire the CCTV equipment at the end of the lease for either $1 or 10 percent of the equipment cost, or simply return the CCTV equipment to the leasing company.

As the CCTV equipment seller, you benefit by offering a product that:

- Closes the sale fast by eliminating price objections and is affordable to your customer. The customer is far less likely to negotiate the $170 a month lease payment than he will the $7,500 sticker price.

- You provide your customer another line of credit with your third-party leasing company partnership and the leasing company takes all the collection and credit risk if the customer defaults. How many times have you installed a CCTV system and then tried for 30 or 60 days to get payment from your customer? Leasing eliminates risk by paying you for 100 percent of the equipment at the time of installation and customer’s acceptance of the equipment.

Per the Small Business Association of America, more than 80 percent of small businesses lease equipment, including computers, copiers, office, manufacturing, CCTV and CCTV equipment. Equipment leasing is a $230 billion industry in the United States alone. Offer your customers a CCTV system that really pays for itself by offering leasing – you will sell more equipment and your customers will keep coming back for more CCTV equipment in the future.

Noiel Fontaine is vice president of vendor programs for Golden Eagle Leasing, Ridgefield, Conn. He may be reached at nfontaine@gehyc.com.