Finding a Way: Lease Financing + Nonprofit Donations
By Guy Klingler
Why lease? Really and truly: why are customers leasing?
Beyond the typical features and benefits of leasing, it can be helpful to remember that lessors can do much more than provide money. In the best case, lessors solve business problems and help their clients become more successful. Independent leasing and finance companies have a particular advantage in this area because they have the ability to specialize in niche areas and devise funding structures unique to the specifics of each deal.
In one recent instance, a nonprofit university required a creative financing solution. Why? To smooth out cash flows relating to charitable gift receipts, while simultaneously better managing technology refresh cycles -- so they could position themselves as a technology leader in order to attract the best and brightest students and faculty.
The customer was due to receive a seven-figure donation to launch a new specialized chemistry department. The donor pledged to contribute specific amounts, on specific dates, over the course of five years. However, the school needed to make significant upfront IT and laboratory acquisitions. And the school desired to start refreshing its technology infrastructure on a more frequent, predetermined schedule.
In this case, First American Equipment Finance structured a leasing solution that matched the donation timeline. The school leased their laboratory and information technology equipment, utilizing the donation to make the lease payments. This custom structured equipment lease – centered around the customer’s unique business needs and objectives—solved multiple strategic and budgetary challenges for the client.
"Understanding WHY the financing is needed, and the customer's long-term business objectives, is critical,” says Guy Klingler, First American co-founder and Director. "The most satisfying part of our work is helping our customers succeed," Klingler adds.
© 2000-2012 First American Equipment Finance All rights reserved. Member, Equipment
Leasing and Finance
Association, United Association of Equipment Leasing, and American Bankers Association.