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Lower Lease Rates to Help You Close More Deals
As the end of the calendar year draws closer, sales financing becomes a critical tool for equipment reps looking to achieve sales targets. Prospects that are long on need but short on budget may still be able to complete an order with the help of our programs, making it possible to book additional business more quickly.
There are certain scenarios we tend to see more often at this time of year and, in each case, sales reps are using sales financing creatively to provide a viable solution for their customers. They're helping their clients move forward with positive business improvements and, in the process, booking orders that wouldn't be possible otherwise. One common example is divisions of larger organizations that have capital available, but not enough to purchase the new equipment they've been considering. They risk losing their budget amount if they don't spend it by year-end, and this may make them open to doing a capital lease. We can structure the first payment to use up their remaining budget for this year, and they can allocate budget amounts from next year or the next several years to take care of the remaining lease obligation. This strategy can be a very effective closing tool, particularly in situations where the prospect also faces a price increase in the following year.
Whatever scenario you're facing, our sales financing plans can be used to make your proposals more compelling. Whether it's by showing growing businesses an alternative to using their limited working capital, or comparing monthly payments against anticipated expense reductions to cost-justify your solution. The key is to present a monthly payment option with every proposal, and have a frank conversation with the prospect about how they plan to pay for the solution you're discussing.
Reduced delinquencies and a lower cost of funds have made it possible for us to reduce our rate factors this month. This creates a good excuse to refresh proposals that may have stalled and open a dialogue about budgets with your prospects. Let them know you are sending a revised proposal that includes lower monthly payments. Ask them how they were planning to pay for the equipment you've been discussing and if they already have budget set aside for the purchase. Learn as much as you can about their decision process and try to determine if a creative payment solution might be all that's needed for them to green-light an order.
Feel free to call me and discuss these and other ideas for using sales financing strategies to close more business before the end of the year.
Why Businesses Lease
Reason #7: Leasing Helps With Planned Asset Management
Progressive firms recognize there's a hidden cost to operating older assets beyond their optimal performance lifecycle. Upgrading regularly to more technologically-advanced equipment can increase productivity, reduce operating costs, and help companies maintain a competitive advantage.
Some businesses prefer to lease certain assets because it keeps them at the leading edge of technology for their industry. Each lease is for a defined period and at the end of the term they're forced to choose between keeping the old equipment or upgrading to a newer version. The ability to get the most advanced equipment simply by agreeing to a new lease means there's less temptation to defer an upgrade in favor of conserving working capital.
For companies that lack the time and resources to develop a formal asset management program, Westport's leasing plans provide a structured alternative to help keep them disciplined and assist with long-term budgeting. We also serve as an administrative resource, holding detailed records readily available for each piece of leased equipment.
If the products you're selling are regularly replaced by new and improved models, our leasing plans may be the best solution for many of your clients. It will help them stay current and will also help you build a base of routine repeat customers. We're happy to discuss ways to present this concept, so contact us if you have any questions.
Take Advantage of Section 179 Deductions Available to Your USA Customers
If you're a manufacturer or distributor selling to clients in the USA, then you should be aware that these economic stimulus tax incentives are about to expire. Qualified businesses can still claim up to 100% of the acquisition costs for new equipment as a tax-deductible expense, but only if they add the new equipment before December 31st, 2011. Targeted at smaller enterprises, this incentive program usually generates a flurry of economic activity in the last quarter of the year as companies scramble to use up any remaining allowance. Westport provides special financing structures so clients who wouldn't otherwise have the necessary capital can still participate in this program. This is a great opportunity if you have American customers and, if you're not familiar with all the details, you're welcome to contact us for more information.
October's Smart Sales Tip
Around this time of year, many manufacturers release their price lists for next year's models. If you're expecting price increases on any of your equipment lines in the New Year, use that as incentive for your clients to act now.
It's generally a good idea to notify customers that prices are going up, but you'll gain even more traction when you show them how they might benefit by doing a short-term lease before the new prices come into effect. Our lease plans will allow them to overcome any budget restriction so they can get your equipment sooner. With the upgrade likely to result in operational efficiencies and cost savings, there will be a financial reward for doing so now rather than later. But the real point to make is that the difference between the future price and today's price subsidizes any perceived extra cost for leasing. In effect, acting today pays down the cost to lease. It's a simple strategy that may help you shorten the sales cycle on some of your deals.
