Confidentiality Notice
This presentation is for the sole use of the intended recipient(s) only and is subject to commercial
confidentiality. This presentation should not be forwarded to another recipient without the express
permission of the sender. If you have received this presentation in error, please contact the sender
immediately, so that we may resolve the fault. Confidentiality and copyright subsists in all
communications from Lifecycle. No extract may be reproduced, stored in a retrieval system or
transmitted in any form or by any means electronic, photocopying, recording or otherwise - to any
third parties, without prior permission in writing from Lifecycle. Lifecycle is the trading name for
Lifecycle Solution Finance Ltd.
Thank you.
Systems Integrator Finance Programs
Why do Customers Finance Solutions?
Why do Customers Finance Solutions?
End-User Benefits
Solution Affordability
CashflowOptimisation
Tax Relief Incentives
Cash in hand
delivers better returns
“
We’ve kept our cash reserves intact to sustain
our core business.
All our credit facilities are still intact with our bank
and we are free to use our assets for loans
against core business investments.
We have invested in the future of our company
without impacting our financial strength
”P Stafford
Financial Controller
SECURITAS
Why Should Resellers Offer Finance?
Why Should Resellers Offer Finance?
“ the quality of your solution is
irrelevant if it isn’t affordable ”
Why Should Resellers Offer Finance?
Solution Affordability
Optimised Margin
Optimised Revenue &Cashflow
StickyBusiness
• Locks-in customer to solution roadmap
• Engage more customer stakeholders
• Banks future sales via upgrade/refresh
• Removes capital cost comparison
• Enables margins to be retained
• Discounting payment vs %
• Removes capital-cost barriers
• Enables “best” solution
• Total solution can be included
• 100% contract value up-front
• No “waiting” for payment
• Total revenue through accounts
“ customer order sizes
are typically 32% higher
when using finance1 ”
1 BNPPLS Study 2012
Reseller
Benefits
Motivations to Finance
Solution Sold as Cash Purchase Solution Sold on Finance
Competition Like-for-like comparison with competitor Cannot compare against Competitor’s cash price
Negotiation Discounting Retail Price = major impact on margin Discounting Payment Value = minor impact on margin
Cost to Customer Up Front Total solution cost is payable up front Only first monthly/quarterly payment due
Affordability to Customer Maximum capital budget they can find Predictable monthly/quarterly operating expense
Customer Receives Solution Immediately Immediately
Tax Relief Can only depreciate assets Payments can be 100% deductible against tax
Cash in Hand Cash tied-up in depreciating assets Cash can be re-invested elsewhere for greater returns
Reseller Paid for Hard/Software Typically 30~90 days after handover Within 7-days of Handover (Typically within 48hrs)
Reseller Paid for Services Typically 30~90 days after handover Within 7-days of Handover (Typically within 48hrs)
Reseller Paid for Maint./Support Typically only realise revenue quarterly/annually Within 7-days of Handover (Typically within 48hrs)*
Reseller Paid for Cloud/SaaS Typically only realise revenue quarterly/annually Within 7-days of Handover (Typically within 48hrs)*
Reseller Pays Supply-Chain Negative cashflow if delayed payment by Customer Negotiate additional discount for early payment
Customer Loyalty None = harder to sell upgrades/refreshes Tied-in = easier to sell upgrades/refreshes
* Funded Element. Non-Funded element recovered monthly/quarterly over the contract term
How do you Sell Finance Solutions?
How Should Resellers Sell Finance Solutions?
•Always lead with a lease quote (remove all capital cost from your quotes and price-lists)
•Quoting capital cost leads to price-comparisons or “% off List” discounting (costing you margin!)
•Say you “only” deliver your solutions an operating cost (i.e. on lease). Explain benefits of why
•Use ‘savings vs. cash’ to demonstrate effective savings/discounting
Forget Capital Cost
•What operational benefits (income) does your solution bring?
•Map these monthly benefits against the monthly payment value to show ROI
Build an ROI Case
•What operational benefits (savings) does your solution bring?
•Map these monthly benefits against the monthly payment value to show “cost neutrality”
Build a “Cost Neutral” Case
What’s the Process?
Distributed Finance Models
Reseller-Led Model
Supply Chain
Customer
Lifecycle
Customer enters
finance contract
Lifecycle pays the Reseller
the full contract value
Reseller delivers the
solution to the Customer
Reseller pays the
Suppliers for the goods
Reseller
1
2
3
4
The Reseller “owns” the finance cycle.
Payout to Reseller ≤ 7-days of Customer Acceptance.
100% of Contract revenue goes through the Reseller.
Reseller pays Suppliers for goods supplied:
Standard trade-account payment terms.
Potential discount offered for early payment?
Outcomes
Lifecycle Financed Solution Process
Pre-Sales
•Business as Usual.
•Design the solution required and create a BoQ: h/ware, s/ware, services, support, cloud, etc.
Underwriting
•Submit deal proposal to Lifecycle (via website or email).
•Lifecycle Underwriting will confirm acceptance and quotation.
•Customer raises PO/Commitment to you for contract value (e.g. X number of payments of £X value).
Delivery
•Lifecycle issues contract documentation. Customer signs contract.
•Supply, install, test and commission the solution as appropriate.
•Customer signs Acceptance Certificate (BoQ).
Payout
•Lifecycle pays you the due contract value within 7-days (typically within 48-hours).
•Lifecycle can operate as your agent to collect Non-funded elements (e.g. additional services etc.)
Repeat Sales
•Repeat process at end of contract term and/or facilitate upgrades/refreshes.
•Ability to purchase can be facilitated at arms length (typically value of one rental payment).
Financing Extended or Roll-out Projects
• Contract Schedule A
• Value for Phase 1
• BoQ for Phase 1
• Handover Phase 1
• Payout Phase 1
• Rental = A
Project Phase
1
• Contract Schedule B
• Value for Phase 2
• BoQ for Phase 2
• Handover Phase 2
• Payout Phase 2
•Rental = A+B
Project Phase
2
• Contract Schedule C
• Value for Phase 3
• BoQ for Phase 3
• Handover Phase 3
•Payout Phase 3
•Rental = A+B+C
Project Phase
3
Lifecycle Master Contract
Master contract with Customer – project-phases defined as Schedules.
Schedules are paid-out as each project-phase is handed over.
Removes cashflow burden on supplier payments and cost of internal service delivery.
Customer rental value increases as each project-phase is handed over.
Deferred Payment Options
Customer gets solution now – pays later
Defer first payment by 3~6 Months
Leverage future budget releases
Enable time to deliver ROI biz-plans
Enable time to deliver cost-neutral biz-plans
Align payment plan for new builds and fit-outs
Reseller still gets paid up front
*Payment Deferral Option and Deferral Period is subject to status and business case
Lifecycle enables Customers to defer the initial payment for your solution by up to 6-months from handover…
Self-Financing for Demo Systems
Self-Financing NFR Demo Systems
Strengthen Vendor relationships
Accelerate Vendor-accreditations
Obtain better Vendor-discounting
Enable try-before-buy facilities
Differentiator against competition
Value-add service to Customers
Reduce Customer sales-cycles
Refresh in line with Vendor roadmaps
Lifecycle enables Systems Integrators to self-finance Not for Resale Demo Systems.
Remove Cost
Barrier
• No Capital Cost
• Price-per-Month
• Affordability
Build Pipeline
• Defer first payment by 3~6 months to allow time to build sales pipelines
Drive Sales
• On/Offsite Demo
• Try-Before-Buy
• Test Lab Facility
Cost Neutralise
• Sales revenue can be apportioned to cover operating expense of Demo
Why
Typical Engagement with Finance Companies
“Hi. Can you help me on a deal?”
“Sure. Do you meet all our criteria?”
“I don’t know”
“Ok, we’ll get back to you in a week or so”
“Hello…, I haven’t heard anything…”
“Oh, sorry. We can’t help in this case because of XYZ”
“Ok…, any ideas on what we can do?”
“Sure. Do you meet all our criteria?”
“Aaaaarrrrgh!”
Lifecycle don’t just finance ‘Assets’…, we finance ‘Solutions’
Consultancy and Design
Software
Install and Commissioning
Hardware
Training
Maintenance and Support
Cloud and SaaS Subscriptions
Managed Services
BUSINESS PARTNER A virtual extension of your business overnight, without carrying the associated overhead
Understanding your business in depth and developing solutions to support your strategy
Focused on helping you proactively grow your business, not just servicing ad hoc demand
Exceptional customer-service [pre-qualifications, pre-sales consultancy, fast-track underwriting]
TOTAL SOLUTION FUNDER Financing entire solutions – not just product
Hardware + Software + Services + Maintenance & Support + Cloud
Support for funding reseller products and services as part of a “unified solution”
Optional payment deferral to support NFR programs and ROI sales [subject to status]
MULTIPLE UN-BIASED CREDIT LINES Not limited to a single credit-line [as is the case with typical vendor brands – Dell, HP, Cisco, etc.]
No minimum requirement for vendor-specific hardware percentage
Negligible knock-back rate i.e. can fund customers across credit-status spectrum
Single point of access to global project funding resources
LIFECYCLE ALLIANCE PROGRAM Essential tools for building a successful business
Virtual white-labelled Finance Operations Team [Telephone, Email, Video]
White-labelled marketing and business development collateral [pdf brochures, videos, etc.]
Marketing and campaigning assistance
Lifecycle don’t just ‘Provide’,… we ‘Partner’
Lifecycle Alliance
White-label Finance
Team
Helpdesk
EmailTelephone
Video
Free Pre-qualification
Fast-track Underwriting
White-label Biz Dev
Collateral
Marketing Campaign
Support
NFR + Solution Bundling
Good News For You
My sales leads are no longer restricted by capital budget
I can finance my “entire solution” not just the hardware
I can engage more customer stakeholders
Now it’s easy to sell an ROI business case
I can get paid for the full contract up-front
No more pressures on our cashflow
I’ve become “sticky” to my customer
Now I’ve got future repeat-sales in the bag
It’s super easy – Lifecycle are a virtual extension to my business
Good News For Your Vendors
My Reseller is proactive and value-add
My Reseller is empowering itself as a sales channel
My Reseller is removing the capital cost barriers to my products
My Reseller is investing in demo systems to drive business
My Reseller is actively advancing their accreditation
My Reseller is helping to reduce sales cycles
My Reseller is locking my products into Customer roadmaps
Good News For Your Customers
I’ve got no up front capital cost issues
The best-solution is now “affordable”
I get the solution I needed without compromise
Total solution comes as a unified monthly payment
I can pay monthly or pay quarterly
If I have good credit I can defer paying 3~6 months
I can put my cash to better use in my business
I get savings vs Cash Purchase (tax accounting)
My solution gets routine upgrade / refresh
There’s no impact on credit line with my bank
I’ve built a stronger relationship with my supplier
I can align with my Vendor’s roadmap
Proven Value
“
Lifecycle support our business with a program of specialist leasing facilities to
enable operating cost models for our solutions…
Over the past 3-years we have transacted over £5M in business with Lifecycle...
At the current time we are processing approximately £300k of leasing a month
with them on an exclusive basis…
”
Managing Director
NIX
Summary
Offering Lifecycle finance is an essential ‘value-add’ to re-sale (VAR)
Strengthen relationships with your Vendors
o Shows proactive solutions to optimise your performance as a channel
o Investment in NFR demo systems accelerates your accreditation, optimises your discounts and reduces your sales cycles
Strengthen relationships with your Customers
o Clear differentiator against your competition
o Creates solution affordability – get the solution they really need, now
o Delivers cashflow predictability – predictable operating expense for solution life cycle
o Delivers tax relief and demonstrable savings vs. cash
Accelerates your business
o Enables complex and high-value solutions to be sold as an affordable, predicable monthly price
o Typical 32% increase on sales volumes when offering finance
o Optimises your cashflow – contract payout within 7-days (no waiting 30~90 days)
o Enables you to negotiate preferable terms with your supply-chain
o Makes you “sticky” to your Customer – locking out competition
Minimal effort to launch and operate
o Lifecycle can operate as the virtual finance division of your business
o Quote OpEx before CapEx
o Evangelise through existing communication channels
T: +44 844 5000 656E: [email protected]: lifecycle-sf.com
© Lifecycle Solution Finance LTD
Fraser Hamilton | DirectorM: +44 7717 846 990E: [email protected]