equipment for services
DESCRIPTION
PAETEC\'s ultimate win win proposition. Rather its hardware, furnature, software or almost any other major business purchase, our shared profit program will allow your organization to make that purchase with ZERO cash outlay.TRANSCRIPT
Equipment for Services Program
Presented by: <<Insert Your Name Here>>Presented by: <<Insert Your Name Here>><<Insert Today’s Date Here>><<Insert Today’s Date Here>>
If budget wasn’t an issue, what equipment or software would you purchase?
What is EFS?
PAETEC’s PAETEC’s Equipment for Services (EFS)Equipment for Services (EFS) program is a profit sharing mechanism that program is a profit sharing mechanism that provides our customers with a unique method for provides our customers with a unique method for acquiring what they need for their business, with acquiring what they need for their business, with minimal or no capital outlay, while recognizing a minimal or no capital outlay, while recognizing a reduction in current network cost.reduction in current network cost.
Overview
Over $70 million in equipment and software Over $70 million in equipment and software funded through our EFS program funded through our EFS program
70% monthly lease payments are subsidized70% monthly lease payments are subsidized
Average amount financed per customer is Average amount financed per customer is $16 thousand $16 thousand
Options
BundledBundled The Fair Market Value and Dollar Buyout options are availableThe Fair Market Value and Dollar Buyout options are available PAETEC will set up a lease with the finance partner PAETEC will set up a lease with the finance partner PAETEC will perform the billing and collecting function of the lease PAETEC will perform the billing and collecting function of the lease
on the customer’s PAETEC invoice on the customer’s PAETEC invoice Any credit towards the lease will be reflected on the customer’s Any credit towards the lease will be reflected on the customer’s
PAETEC invoice PAETEC invoice Established PAETEC finance partners are the only banks that can be Established PAETEC finance partners are the only banks that can be
used and will pay the vendor directly used and will pay the vendor directly
UnbundledUnbundled PAETEC will apply a monthly credit towards the customer’s invoice PAETEC will apply a monthly credit towards the customer’s invoice
for a purchase – either made with cash up-front or secured external for a purchase – either made with cash up-front or secured external fundingfunding
PAETEC will not be involved in the leasePAETEC will not be involved in the lease
Please Note: For the Bundled and Unbundled options, credit can be applied to already Please Note: For the Bundled and Unbundled options, credit can be applied to already purchased equipment. Credit will vary based on the individual customer's needs.purchased equipment. Credit will vary based on the individual customer's needs.
Clear Invoicing – Bundled
Clear Invoicing – Unbundled
Finance Partners
CIT has grown steadily to become one of the world’s largest CIT has grown steadily to become one of the world’s largest publicly traded, diversified financing services companies (listed on publicly traded, diversified financing services companies (listed on the NYSE). As a leading middle market lender, CIT offers a wide the NYSE). As a leading middle market lender, CIT offers a wide variety of financing solutions from commercial financing and variety of financing solutions from commercial financing and specialized services to consumer financing programs through specialized services to consumer financing programs through intermediaries. intermediaries.
Approximately 6,500 employees worldwideApproximately 6,500 employees worldwide
Managed assets of approximately $50 billionManaged assets of approximately $50 billion
Finance Partners
AEL Financial is part of the Illinois-based Forsythe Group AEL Financial is part of the Illinois-based Forsythe Group of companies. The Forsythe Group includes a diverse of companies. The Forsythe Group includes a diverse portfolio of companies in numerous industries, including portfolio of companies in numerous industries, including banking, financial services, energy services, industrial banking, financial services, energy services, industrial power equipment, sports and entertainment, agriculture, power equipment, sports and entertainment, agriculture, and real estate development. AEL Financial specializes in and real estate development. AEL Financial specializes in the leasing and financing of software and high-technology the leasing and financing of software and high-technology products through its "Total Solution Financing" programs.products through its "Total Solution Financing" programs.
Why does PAETEC offer this program?
Benefits to the CustomerBenefits to the Customer
One-vendor solution (equipment/software, network, finance)One-vendor solution (equipment/software, network, finance)
Cost savingsCost savings
PAETEC subsidy eliminates budget constraintsPAETEC subsidy eliminates budget constraints
State-of-the-art technologyState-of-the-art technology
No riskNo risk
Fixed, competitive rate for life of contractFixed, competitive rate for life of contract
Lease and subsidy on PAETEC invoice (bundled)Lease and subsidy on PAETEC invoice (bundled)
Why does PAETEC offer this program?
Benefits to PAETECBenefits to PAETEC
Market DifferentiatorMarket Differentiator EFS helps set PAETEC apart from competitors
Customer RetentionCustomer Retention The program is designed to allow PAETEC to commit to
additional equipment / software and extend the term of the customer’s contract
Longer Contract TermLonger Contract Term With an extended contract term, the lease payment decreases.
It also allows PAETEC to share more of its profit in the form of a credit towards the customer’s monthly lease payment
Program Structure
Customer Signs Service Agreement with PAETEC with Minimum Monthly Fee
Master Service Agreement PAETEC Pays the Monthly Lease Payment to Leasing Company and Acts as a Billing and Collecting Agent
Pays Vendor Upon Receipt of Delivery and Acceptance Form
Customer Signs Lease with CIT/AEL
Customer Signs Vendor Purchase Agreement
Customer Vendor
PAETEC CIT / AEL
Leasing
Company
EFS Customer: Success Story
Customer Case Study: Hospital
Equipment InformationEquipment Information
Outdated PBXOutdated PBX
Vendor is NEC – planned to continue working with themVendor is NEC – planned to continue working with them
System upgrade is $250,000 and NEC requires progress paymentSystem upgrade is $250,000 and NEC requires progress payment
Customer SituationCustomer Situation
Cash flow bindCash flow bind
Own current systemOwn current system
Customer Case Study: Hospital
Equipment Lease SolutionEquipment Lease Solution
Fair Market Value – this option meets the hospital’s need for future Fair Market Value – this option meets the hospital’s need for future upgrades due to its growth.upgrades due to its growth.
60-month term to lower monthly cost60-month term to lower monthly cost Fair Market Value option keeps the payments lower per month Fair Market Value option keeps the payments lower per month Total lease payment = $5,625Total lease payment = $5,625
Customer Case Study: Hospital
(7) PRI T-1(7) PRI T-1 (8) PRI T-1/ T-1 EUCL(8) PRI T-1/ T-1 EUCL 26,838 minutes/month Domestic Intralata26,838 minutes/month Domestic Intralata 18,918 minutes/month Domestic Intrastate18,918 minutes/month Domestic Intrastate 28,358 minutes/month Domestic Interstate28,358 minutes/month Domestic Interstate 500 minutes O+ calls per month500 minutes O+ calls per month 3,750 O+ minutes per month3,750 O+ minutes per month Local LMS 1,038,643 by minutes – Zone 1Local LMS 1,038,643 by minutes – Zone 1 Local terminating access $2,077.29Local terminating access $2,077.29 (6) T-1 Local Loop(6) T-1 Local Loop Operator Service commission to customer 27% – $675Operator Service commission to customer 27% – $675
Customer Case Study: Hospital
Why did this healthcare provider select PAETEC?Why did this healthcare provider select PAETEC?
PAETEC reduces cost for outbound traffic by 26%PAETEC reduces cost for outbound traffic by 26%
PAETEC reduces cost for Local, Intralata, Intrastate, PAETEC reduces cost for Local, Intralata, Intrastate, and Interstate usage by 25% and Interstate usage by 25%
PAETEC provides a subsidy of $337,500PAETEC provides a subsidy of $337,500
With NEC progress payments, you have to have at least With NEC progress payments, you have to have at least
$100,000 in equipment$100,000 in equipment
Additional EFS Success Stories
Construction CompanyConstruction Company Total EFS Subsidy = $5,392Total EFS Subsidy = $5,392 Contract Term = 36 MonthsContract Term = 36 Months Monthly EFS = $150Monthly EFS = $150 Monthly Usage = $930Monthly Usage = $930
Management Consulting FirmManagement Consulting Firm Total EFS Subsidy = $50,498Total EFS Subsidy = $50,498 Contract Term = 36 MonthsContract Term = 36 Months Monthly EFS = $1,402.72Monthly EFS = $1,402.72 Monthly Usage = $3,873Monthly Usage = $3,873
Travel AgencyTravel Agency Total EFS Subsidy = $14,153Total EFS Subsidy = $14,153 Contract Term = 60 MonthsContract Term = 60 Months Monthly EFS = $236Monthly EFS = $236 Monthly Usage = $971Monthly Usage = $971
Thank YouThank You