Atlas Gentech To Bring Leasing Model To Australian Market in 2017
Atlas Gentech’s Simply Leasing finance business, which provides all sorts of office equipment, including security solutions, will be launched into the Australian market after enjoying great success over the ditch.
Simply Leasing is a finance business which started out leasing NZ-based security and electronic equipment distributor Atlas Gentech equipment but now provides financing to Atlas Gentech clients. A re-launch is planned for coming weeks and Atlas Gentech MD, Steve Varney, said the company is considering expanding into Australia this year.
Varney told Heather Wright of Channel Life that leasing isn’t about customers not having the up-front cash anymore – he said there are real benefits for resellers to offer leasing as an option early in the sales conversation.
“A lot of corporates and even government departments and schools, want a total cost of ownership, or a known quantity if you like,” Varney said. “They want an operating model, rather than a capex model. There’s a big trend towards that globally and it’s really taking hold here as well.
“Users have realised that if you buy a photocopier, IT equipment, security equipment or whatever, it’s not an asset – it’s really just something you’re going to have to buy every 5 years.”
For resellers, he says leasing reduces the barrier to a sale in terms of upfront money and having to get capex approvals when selling to large corporates, while also making the customer ‘a bit more sticky’.
When leases expire, Varney said customers tend to just return to the integrator and upgrade the lease again.
“The other advantage is you keep the customer’s system up to date a lot more. When they’re on a lease there is a finite decision to be made at the end of the lease about upgrading.
“When they buy the asset, they tend to sweat it too long, particularly security systems – you can see some diabolical systems and the customer just won’t upgrade them when it’s not on a lease.”
Varney said there’s a big financial incentive for resellers too, with Simply Leasing delivering cash into the hands of resellers within 48 hours of equipment being received by the customer.
“A major corporate could take 60 days to pay, whereas if you’re getting paid in 48 hours, it’s good cashflow.”
However, he says despite the benefits, many resellers don’t mention leasing as an option early on in the conversation, instead leaving it as simply a line on the bottom of an invoice.
While Simply Leasing may have started out as a leasing arm for Atlas Gentech, Varney says demand for the leasing was such that it now does ‘all types of equipment and a mixture within one installation’.
The company will launch its offerings in Australia in the next year, with Varney dubbing Australia “a good market” for Simply Leasing.
According to Varney, there’s plenty of room for growth, with around 50 per cent of all equipment acquisitions in the United States now leased.
“There’s no reason we can’t get to that in the Australia and New Zealand market,” Varney said. ♦