Lifecycle provides intelligent funding solutions for AV, IT and Collaboration projects. This presentation looks at how we support Systems Integrators to offer their solutions to customers as a predictable monthly operating expense, rather than as an up-front capital cost.

1. Confidentiality Notice
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Thankyou.

2. Systems Integrator Finance Programs

3. Why do Customers Finance Solutions?

4. Why do Customers Finance Solutions?
End-User Benefits
Solution Affordability
CashflowOptimisation
Tax Relief Incentives
Cash in hand delivers better returns
“ We’ve kept our cash reserves intact to sustain our core business.
Allourcreditfacilitiesarestillintactwithourbankandwearefreetouseourassetsforloansagainstcorebusinessinvestments.
Wehaveinvestedinthefutureofourcompanywithoutimpactingourfinancialstrength
”
P Stafford
Financial Controller
SECURITAS

5. Why Should Resellers Offer Finance?

6. Why Should Resellers Offer Finance?
“the quality of your solution is irrelevant if it isn’t affordable ”

7. Why Should Resellers Offer Finance?
Solution Affordability
Optimised Margin
Optimised Revenue & Cashflow
StickyBusiness
•Locks-in customer to solution roadmap
•Engage more customer stakeholders
•Banks future sales via upgrade/refresh
•Removes capital cost comparison
•Enables margins to be retained
•Discounting payment vs %
•Removes capital-cost barriers
•Enables “best” solution
•Total solution can be included
•100% contract value up-front
•No “waiting” for payment
•Total revenue through accounts
“customer order sizes are typically 32%higher when using finance1”
1BNPPLS Study 2012
Reseller
Benefits

8. Motivations to Finance
Solution Sold as Cash Purchase
Solution Sold on Finance
Competition
Like-for-likecomparison with competitor
Cannot compare against Competitor’s cash price
Negotiation
Discounting Retail Price = major impact on margin
Discounting Payment Value = minor impact on margin
Cost to Customer Up Front
Total solution cost is payable upfront
Onlyfirst monthly/quarterly payment due
Affordability to Customer
Maximum capital budgetthey can find
Predictable monthly/quarterly operating expense
CustomerReceives Solution
Immediately
Immediately
Tax Relief
Canonly depreciate assets
Payments can be 100% deductible against tax
Cash in Hand
Cash tied-upin depreciating assets
Cash can be re-investedelsewhere for greater returns
Reseller Paid for Hard/Software
Typically 30~90 days after handover
Within 7-days of Handover (Typically within48hrs)
Reseller Paid for Services
Typically 30~90 days after handover
Within 7-days of Handover (Typically within48hrs)
Reseller Paid for Maint./Support
Typically only realise revenuequarterly/annually
Within 7-days of Handover (Typically within48hrs)*
Reseller Paid for Cloud/SaaS
Typically only realise revenuequarterly/annually
Within 7-days of Handover (Typically within48hrs)*
ResellerPays Supply-Chain
Negative cashflow if delayed payment by Customer
Negotiate additional discount for earlypayment
Customer Loyalty
None = harder to sell upgrades/refreshes
Tied-in = easier to sellupgrades/refreshes
* Funded Element. Non-Funded element recovered monthly/quarterly over the contract term

9. How do you Sell Finance Solutions?

10. How Should Resellers Sell Finance Solutions?
•Always lead with a lease quote (remove all capital cost from your quotes and price-lists)
•Quoting capital cost leads to price-comparisons or “% off List” discounting (costing you margin!)
•Say you “only” deliver your solutions an operating cost (i.e. on lease). Explain benefits of why
•Use ‘savings vs. cash’ to demonstrate effective savings/discounting
Forget Capital Cost
•What operational benefits (income) does your solution bring?
•Map these monthly benefits against the monthly payment value to show ROI
Build an ROI Case
•What operational benefits (savings) does your solution bring?
•Map these monthly benefits against the monthly payment value to show “cost neutrality”
Build a “Cost Neutral” Case

11. What’s the Process?

12. Distributed Finance Models
Reseller-Led Model
Supply Chain
Customer
Lifecycle
Customer enters finance contract
Lifecycle pays the Reseller the full contract value
Reseller delivers the solution to the Customer
Reseller pays the Suppliers for the goods
Reseller
1
2
3
4
The Reseller “owns” the finance cycle.
Payout to Reseller ≤ 7-days of Customer Acceptance.
100% of Contract revenue goes through the Reseller.
Reseller pays Suppliers for goods supplied:
Standard trade-account payment terms.
Potential discount offered for early payment?
Outcomes

13. Lifecycle Financed Solution Process
Pre-Sales
•Business as Usual.
•Design the solution required and create a BoQ: h/ware, s/ware, services, support, cloud, etc.
Underwriting
•Submit deal proposal to Lifecycle (via website or email).
•Lifecycle Underwriting will confirm acceptance and quotation.
•Customer raises PO/Commitment to you for contract value (e.g. X number of payments of £X value).
Delivery
•Lifecycle issues contract documentation. Customer signs contract.
•Supply, install, test and commission the solution as appropriate.
•Customer signs Acceptance Certificate (BoQ).
Payout
•Lifecycle pays you the due contract value within 7-days (typically within 48-hours).
•Lifecycle can operate as your agent to collect Non-funded elements (e.g. additional services etc.)
Repeat Sales
•Repeat process at end of contract term and/or facilitate upgrades/refreshes.
•Ability to purchase can be facilitated at arms length (typically value of one rental payment).

14. Financing Extended or Roll-out Projects
•Contract Schedule A
•Value for Phase 1
•BoQfor Phase 1
•Handover Phase 1
•Payout Phase 1
•Rental = A
Project Phase 1
•Contract Schedule B
•Value for Phase 2
•BoQfor Phase 2
•Handover Phase 2
•Payout Phase 2
•Rental = A+B
Project Phase 2
•Contract Schedule C
•Value for Phase 3
•BoQfor Phase 3
•Handover Phase 3
•Payout Phase 3
•Rental = A+B+C
Project Phase 3
Lifecycle Master Contract
Master contract with Customer –project-phases defined as Schedules.
Schedules are paid-out as each project-phase is handed over.
Removes cashflow burden on supplier payments and cost of internal service delivery.
Customer rental value increases as each project-phase is handed over.

15. Deferred Payment Options
Customer gets solution now –pays later
Defer first payment by 3~6 Months
Leverage future budget releases
Enable time to deliver ROI biz-plans
Enable time to deliver cost-neutral biz-plans
Align payment plan for new builds and fit-outs
Reseller still gets paid up front
*Payment Deferral Option and Deferral Period is subject to status and business case
Lifecycle enables Customers to defer the initial payment for your solution by up to 6-months from handover…

16. Self-Financing for Demo Systems

17. Self-Financing NFR Demo Systems
Strengthen Vendor relationships
Accelerate Vendor-accreditations
Obtain better Vendor-discounting
Enable try-before-buy facilities
Differentiator against competition
Value-add service to Customers
Reduce Customer sales-cycles
Refresh in line with Vendor roadmaps
Lifecycle enables Systems Integrators to self-finance Not for Resale Demo Systems.
Remove Cost Barrier
•No Capital Cost
•Price-per-Month
•Affordability
Build Pipeline
•Defer first payment by 3~6 months to allow time to build sales pipelines
Drive Sales
•On/Offsite Demo
•Try-Before-Buy
•Test Lab Facility
Cost Neutralise
•Sales revenue can be apportioned to cover operating expense of Demo

18. Why

19. Typical Engagement with Finance Companies
“Hi. Can you help me on a deal?”
“Sure. Do you meet all our criteria?”
“I don’t know”
“Ok, we’ll get back to you in a week or so”
“Hello…, I haven’t heard anything…”
“Oh, sorry. We can’t help in this case because of XYZ”
“Ok…, any ideas on what we can do?”
“Sure. Do you meet all our criteria?”
“Aaaaarrrrgh!”

20. Lifecycle don’t just finance ‘Assets’…, we finance ‘Solutions’
Consultancy and Design
Software
Install and Commissioning
Hardware
Training
Maintenance and Support
Cloud and SaaS Subscriptions
Managed Services

21. BUSINESS PARTNER
A virtual extension of your business overnight, without carrying the associated overhead
Understanding your business in depth and developing solutions to support your strategy
Focused on helping you proactively grow your business, not just servicing ad hoc demand
Exceptional customer-service [pre-qualifications, pre-sales consultancy, fast-track underwriting]
TOTAL SOLUTION FUNDER
Financing entire solutions –not just product
Hardware + Software + Services + Maintenance & Support + Cloud
Support for funding reseller products and services as part of a “unified solution”
Optional payment deferral to support NFR programs and ROI sales [subject to status]
MULTIPLE UN-BIASED CREDIT LINES
Not limited to a single credit-line [as is the case with typical vendor brands –Dell, HP, Cisco, etc.]
No minimum requirement for vendor-specific hardware percentage
Negligible knock-back rate i.e. can fund customers across credit-status spectrum
Single point of access to global project funding resources
LIFECYCLE ALLIANCE PROGRAM
Essential tools for building a successful business
Virtual white-labelled Finance Operations Team [Telephone, Email, Video]
White-labelled marketing and business development collateral [pdf brochures, videos, etc.]
Marketing and campaigning assistance
Lifecycle don’t just ‘Provide’,… we ‘Partner’

22. Lifecycle Alliance
White-label Finance Team
Helpdesk
EmailTelephoneVideo
Free Pre- qualification
Fast-track Underwriting
White-label Biz Dev Collateral
Marketing Campaign Support
NFR + Solution Bundling

23. Good News For You
My sales leads are no longer restricted by capital budget
I can finance my “entire solution” not just the hardware
I can engage more customer stakeholders
Now it’s easy to sell an ROI business case
I can get paid for the full contract up-front
No more pressures on our cashflow
I’ve become “sticky” to my customer
Now I’ve got future repeat-sales in the bag
It’s super easy –Lifecycle are a virtual extension to my business

24. Good News For Your Vendors
My Reseller is proactive and value-add
My Reseller is empowering itself as a sales channel
My Reseller is removing the capital cost barriers to my products
My Reseller is investing in demo systems to drive business
My Reseller is actively advancing their accreditation
My Reseller is helping to reduce sales cycles
My Reseller is locking my products into Customer roadmaps

25. Good News For Your Customers
I’ve got no up front capital cost issues
The best-solution is now “affordable”
I get the solution I needed without compromise
Total solution comes as a unified monthly payment
I can pay monthly or pay quarterly
If I have good credit I can defer paying 3~6 months
I can put my cash to better use in my business
I get savings vs Cash Purchase (tax accounting)
My solution gets routine upgrade / refresh
There’s no impact on credit line with my bank
I’ve built a stronger relationship with my supplier
I can align with my Vendor’s roadmap

26. Proven Value
“ Lifecycle support our business with a program of specialist leasing facilities to enable operating cost models for our solutions…
Over the past 3-years we have transacted over £5M in business with Lifecycle...
At the current time we are processing approximately £300k of leasing a month with them on an exclusive basis…
”
Managing Director
NIX

27. Summary
Offering Lifecycle finance is an essential ‘value-add’ to re-sale (VAR)
Strengthen relationships with your Vendors
oShows proactive solutions to optimise your performance as a channel
oInvestment in NFR demo systems accelerates your accreditation, optimises your discounts and reduces your sales cycles
Strengthen relationships with your Customers
oClear differentiator against your competition
oCreates solution affordability –get the solution they really need, now
oDelivers cashflow predictability –predictable operating expense for solution life cycle
oDelivers tax relief and demonstrable savings vs. cash
Accelerates your business
oEnables complex and high-value solutions to be sold as an affordable, predicable monthly price
oTypical 32% increase on sales volumes when offering finance
oOptimises your cashflow –contract payout within 7-days (no waiting 30~90 days)
oEnables you to negotiate preferable terms with your supply-chain
oMakes you “sticky” to your Customer –locking out competition
Minimal effort to launch and operate
oLifecycle can operate as the virtual finance division of your business
oQuote OpEx before CapEx
oEvangelise through existing communication channels

28. T: +44 844 5000 656
E: enquiry@lifecycle-sf.com
W: lifecycle-sf.com
© Lifecycle Solution Finance LTD
Fraser Hamilton | Director
M: +44 7717 846 990
E: fraser.hamilton@lifecycle-sf.com