The close association of the communication equipment manufacturer with the leasing usually leads to a more robust value being attributed to the equipment than would be the case from an independent financier. The advantage of this is a more favourable view of the risk in a leasing arrangement and a greater willingness to reflect an equipments residual value in any leasing arrangements (operating leases). A systems provider would be foolish not to exploit these advantages in the payment options offered to end customers.

However in utilising these advantages Systems Providers should ensure they have management systems in place to minimise any potential pitfalls. The most obvious of these is an agreement with the manufacturers’ leasing arm on how equipment upgrades and changes a managed either within or at the end of the leasing period. It is important for account control that such negotiations are not direct between the end user and lessor to the exclusion of the System Provider. It is also likely that a Systems Provider will have a range of equipment types within its’ sales offerings necessitating agreements with more than one lessor. In addition some solutions offered to the end customer may include a high proportion of software and or services. In these cases lessor acting for the manufacturers may be unwilling to fund the transaction requiring the introduction of an independent lessor who specialises in the funding of “soft assets”.

Leasing is a powerful aid to sales for any Systems Provider but to achieve its full potential the programme must be professionally managed. If the leasing volumes are high such as in organisations like BT in-house expertise may be appropriate but for most programmes expert support from a broker or consultant is likely to be the most cost effective.