No available capital or operating budget?  No problem.
CASE STUDY
Vendor: FileNet
End customer: Westinghouse Litigation
Finance provider: Principal Management Corporation (predecessor firm of Active Capital Funding)
Principal in charge: Mike Wagner

CHALLENGE
The corporate law department of this multinational based in Pittsburgh was faced with severe operational limitations.  In order to replace an outdated installation with more efficient and useful FileNet products, major stumbling blocks had to be overcome:
  • No capital budgeting dollars were available
  • There was no way to access additional operating budget dollars
  • Legacy leases and equipment owned by another lessor complicated the situation.

SOLUTION
FileNet’s sales representative had a willing customer but no means to close the sale. He contacted us to see if we could come up with some magic to get this deal done.  We suggested an operating lease as the best solution.

The end customer had very restrictive budgeting policies including a stringent formula to determine whether or not a transaction qualifies as an operating lease.  They actually used a sophisticated app to make that determination.  Here’s how we got the deal done:
  1. We negotiated the purchase and the early termination of existing leases and disposed of that equipment.
  2. We created a new lease with a term matching the new useful life of the replacement system at the exact monthly cost as the old system. (Because of their restrictive formula, a lease rate plus or minus a few dollars could have rendered this transaction unacceptable.)
By working with the customer and the FileNet sales rep, we were able to fine-tune the monthly payment to meet the required parameters and close the deal right at the customer’s site.

RESULT
A successful $1.8 million sale and a very satisfied vendor, end customer, and sales rep.