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Assume My Copier Lease....What?

Am kinda of writing as I think, so please excuse me if I jump around somewhat.


Last week I had an email from one of our Print4Pay Members that I'm also connected with on Linkedin.  BTW, the email came via Linkedin, so I should have called it an "inmail"?  


The last thing I want to do is to make this a long blog!  Thus, I replied to the inmail from Rob Mackenzie because of the title "Entrepreneur in Canada seeks your feedback". 


Ok, I read the rest of the inmail which stated,


"I've been a follower of your p4p Hotel blog for several years (I used to be in copier sales). I've recently completed an MBA and started a The idea is an online equipment marketplace for buying, selling, or transferring leases." 


For those of us that have been doing this for a while, we've got firsthand experience with prospects who drop the bomb that they still have 24-36 payments left on their existing lease.  At first your heart sinks, cause you know this is a dead deal and then the next thing you know you're looking for your bag and the quickest way out.  It's a DEAD deal, nada, nothing and the worst thing is that you'll probably never get them when they pay down the lease. That can be attributed to many reasons such as time, change in buyer, change in needs, etc..


I'm in the business of customer service, I need to offer value to my prospects and customers.  Un-Lease fills the void of customers that need to get out of a lease that's either to big or small to meet their needs.  Think of it this way, instead of walking away from that deal that has the 28 payments left, why not tell them, "Understood, we have an excellent program for you. We can help you find a business that will assume your lease, once we find a home for the existing lease we'll move forward with the order for the new equipment, will that work for you"?  BOOM, you got the order!


Thus, I've got an order, although it's not going to move until the old lease is assumed, however, I don't have to discount and I don't have to walk away!!!


I've already spoken with a few Print4Pay Hotel members and everyone thinks this is an awesome service that fills a void in our industry!  I've got additional ideas to help my customers and prospects to move excess inventory, along with that Rob has also instituted a dealer market place (my idea) to help dealers buy, sell and trade equipment.  If you have the time urge to sign up now, the first 100 dealers have a FREE registration and after that there is a sizable fee to get on-board.  Here's the link to get you started un-lease


-=Good Selling=-


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Comments (8)

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Originally Posted by fisher:

How does this square with the fine print on every lease doc I've ever read regarding assignment or transferring the lease by the lessee???  Who goes to jail if the lease doesn't get satisfied????



The assumption process is one that I've seen leasing companies do from time to time. You have to get the blessing of the leasing company first, and credit approval for the new leasee.

@Kitz: Dealer support is also a great question. Currently we approach this on a case-by-case basis. New transfers would go to an affiliated partner in the geographical territory that is qualified to service that equipment. Ultimately, we are building a network of independent dealers not unlike what the direct channel already has access to. This way, independent dealers can leverage the network for new contracts as well, such as when a sale is made to a head office that includes installations in other cities. 


My questions to you guys: would you view a new lease assumption as a new potential customer or as a lost hardware sale? Is the segment of buyers looking for lease assumptions (price sensitive, looking for short-term contracts) a traditionally high-margin segment for you? How do you typically help these customers? 


Our assumption is that it's more valuable to help a high-margin customer upgrade early than it is to make a low-margin sale to a price-sensitive customer in the lower segment. In this way, Un-Lease would allow your low-segment customers to indirectly finance the purchases of your high-margin customers by making it easier for those high value customers to buy repeatedly. 

Thanks for all of your questions and comments! To answer the first question by @AOSGROUP, we've had some success in our local area of Toronto, Canada. The transactions were completed manually before launching the marketplace. The current version of the marketplace was only launched this past January, so you guys are the early adopters. 



Transactions can take the form of either a lease assumption (where one credit-approved client assumes the lease of another as-is), or a split-buyout (where the 'seller' buys out their contract and then sells it to the buyer in one transaction). Leasing professionals I've spoken to have also said that contracts can be modified to account for partial payments and then re-leased. Ultimately, we would like to work with leasing companies to automate this process for our customers as much as possible. 


@Kitz and @Kiwispike you bring up some excellent points. The core idea of Un-Lease is that the seller's lack of satisfactory options (pay full buyout or roll lease into a new contract) is leveraged to get them off the hook for some of their debt while getting the price-sensitive buyer a deal. Therefore, all transaction fees (including moving costs, setup costs, Un-Lease fee) are paid by the seller. 


A seller is asking for more than market rate for a piece of equipment will not be able to find a buyer and will end up paying anyway because they're still responsible for making lease payments. It's up to the seller to decide how much of a hit they're willing to take, and trade that off against how fast they want to sell it. For that reason, I set the expectation with sellers that they will recover 50-60% of their BOP (not including any previous refinancing) after all fees. Almost all sellers have so far accepted that without blinking, because they know that 50-60% is a lot better than nothing. 


Any refinancing or "air" from a previous deal must be squared off by the seller. No buyer will want to shoulder another's debt. That means that Un-Lease cannot help those customers who are underwater from being refinanced several times unless they can come up with a big cash payment. Ultimately, with an efficient marketplace Un-Lease may be able to eliminate the need for refinancing altogether. What do you guys think about refinancing? Would you consider Un-Lease an alternative? 



Originally Posted by Kiwispike:

Tried this recently but haven't found anyone to take it up, issue I have had is often the remaining lease is above the market rates at the time. But its a fantastic concept.

I agree when the market rate is above what you can buy it for, however, but you just never know. Recently we had the Sandy disaster here in NJ.  Many companies moved in for one or two years to help with the rebuilding process.  They would be viable candidates to assume a lease that may have 12-30 payments on it.


Or how about a business that just moves into town and they have no clue as to what their needs will be for a system in two years. Why commit to a 36, 48 or 60 month term?  We see it over and over where a company took a longer term lease and then had to downsize the lease or even upgrade the lease and those companies end of paying through the nose.


Using and promoting Un-Lease can provide added value to your customers and future customers.



Thanx for all of the comments.  Rob will be on soon and add some additional comments for the other threads.



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