The case study below shows an example of how leasing is a fantastic investment option when trying to keep cash flow within the business.
A Difficult Situation
In December 2014 one of our customers was faced with a difficult situation:
- The customer was in need of a CCTV system, the price for the system they needed was £2,500.
- Although the business was cash rich the organisation did not want to spend this amount as one outlay and therefore asked the supplier what system they could get for £1,000.
- Due to the cost the customer was settling for a second-best, cheaper system.
A member of our sales team, Faizal Joyub, happened to be speaking with the supplier of the CCTV system. The supplier explained the situation and Faizal suggested leasing may suit the customer in this situation.
Faizal prepared a lease quote for the £1,000 system which the supplier showed to the customer. After seeing the small monthly payments the customer was intrigued, they could easily afford these payments. Soon after, the customer asked for a lease quote for the original £2,500 CCTV system. Once again, the small monthly rentals were easily manageable.
In the end, the customer asked for a £3,500 lease quote, which included the CCTV system and some additional security equipment. The organisation soon settled on a 5 year lease in which they were able to pay smaller, more manageable payments for the equipment they needed.
The Overall Outcome
Neither the customer nor supplier originally offered or asked for a leasing option and if leasing was not made available to them the customer would have either settled for the second best model or would not have purchased the equipment at all, resulting in a negative outcome for all.
As a result of Faizal’s good financial advice the outcome was a positive one. The customer was able to invest in the CCTV system they wanted in an affordable cost-effective way and the supplier was able to secure a larger sale, increasing revenue for the business.
Our blog ‘The Neglected Question’ focuses on asking for leasing when investing in vital equipment, have a read.