I can't keep track of the price increases, especially when it comes to fuel and food. Probably the most essential staples of our daily lives.
The Fed is set to push a rate increase of 1% sometime next week. I guess I'm kind of fortunate because that increase will coincide with the end of my month.
I don't have time to reflect about how the rate will affect me. I need to address how the fed increase will increase my sales, and increase my GP. I have a statement up on my wall that reads.
"I'd Rather Manage My Life, Than to Let Life Manage Mine"
Once I had wind of the increase, I put a couple of calls out last week and was finally able to speak to my Lease Guru today. My Guru was in hiding the four months because of a special project that is finally completed. Anyway it was great to connect again.
"With the one percent increase from Fed this month, how will that affect my existing lease rates?", was the question I posed to my Guru. I shot out a number before of .50 cents per thousand before he reached for his calculator. Fifty cents per thousand is .0005, which means if your existing lease rate is .0200, then the new rate factor will be .0205. That means the interest in the new rate factor will cost a client 50 cents for every $1,000 borrowed each month. A deal for $15,000 will cost the client another $7.50 per month. Over the 60 months the cost adds up to $450.00. Okay it's not that bad, but what about if you have ten copiers ready to drop in the next couple of weeks or months? That increase is a cool $4,500 increase.
By the way after my Leasing Guru finished with his calculator he told me the increase in the rate factor will be .00053. which is fifty-three cents per $1,000.
My point is that you (we) need to make our client(s) aware of how much more they will pay of they wait. No one, yes no one wants to pay more. This is a great way to turn a bad think into a good opportunity NOW.
Personally, I've never seen rates that I could remember this high. Keep reminding the clients of these three items.
- Two to Three fed rates hikes to happen this year
- Spell out what the increase will cost them if they wait
- Leasing is a hedge against rising inflation
- Section 179, it's not to early to take advantage of this NOW
- Many MFPs are three to five months on back order (It's almost month number 8 of the year)
Add Another Line To Your Proposal
Add a disclaimer that we can't hold financing quotes for more than 30 days, in fact put a line in about the impending Fed increase and that you will have to re-quote. Many leasing companies have lowered the time on their approval from 90 days to 30 days.