In the equipment finance space, the end-of-lease process never the same for any two businesses. Every situation is unique, requiring a different outcome to suit both your needs as a lessor, and the lessee’s. It can be overwhelming to keep track of and manage all of the possible outcomes, especially for large scale contracts. That’s why it is important to have the right tools to support the end-of-lease process, turning it from a challenge to an opportunity for growth, innovation, and profit.
Can you react to any situation?
There are several factors that form the outcome at end-of-lease. The industry that your customers are in, the market and the current conditions, and geography all play a major role in the process. This means your customer will be on a highly personalized journey, and both you and the technology you use will need to be flexible. The equipment finance businesses that will thrive are the ones that have the solutions in place to streamline the end-of-lease process and offer a wide range of options.
One scenario you may encounter often is an early termination. Sometimes, these can be friendly terminations, which offer the chance to extend the contract; for example, your customer may decide to terminate their 5 year contract after 4 years in order to upgrade to newer equipment that better serves their business. Allowing them to do this means you can negotiate another 5 year contract, taking your relationship from 4 years to 9. Alternatively, you may experience a hostile termination, which will cut the contract short and may result in fees or penalties for the lessee. While these are both terminations, they are very different in the way that they are processed.
Or, if termination isn’t the right route, you may want assets to be returned, sold, or refurbished to be used again. Whether these choices are viable for your business depends on the tools that you have, as you will need to calculate settlement values and transition customers onto new agreements.
That’s why it is imperative to use technology that can support and streamline this process, so that you have the best chance of continuing your relationship with your customers in the future while also maximizing the value of your assets.
Empower your customers
Knowledge is power. If your customers have full visibility over their accounts, they may be more likely to plan ahead, which leads to a higher chance of them transitioning onto new contracts. With a self-service portal, customers can instantly calculate and obtain their settlement quotes, without needing manual intervention.
This doesn’t just benefit the lessee, but also your equipment finance business. By using technology that automates the manual process and ensures an accurate calculation every time, you don’t need to worry about any errors. It also speeds up the end-of-lease process, resulting in higher efficiency.
Supporting the circular economy
There is no better opportunity to focus on circular economy values than at end-of-lease. By refurbishing used assets, you can reduce their environmental impact and keep them in the cycle, all while getting the most value out of them possible.
What is the next step?
The end of a lease should not be viewed as the end of an asset’s life, but rather as an opportunity to drive growth and add value to your business. To do this, you need an equipment finance solution that is flexible, powerful, and seamless. With Solifi’s flexible equipment finance solutions, you have all the functionality you need to make the end-of-lease process an opportunity, not a challenge. You can also enjoy advanced accounting and profitability, and automatic extensions of contracts using preconfigured models. No matter what the outcome, Solifi can support you.
Contact us today to learn more about our equipment finance solutions.
