YOUR NEW CUSTOMER FINANCING PLAN
As an alarm dealer and industry financial consultant over the past twenty-five years, I have tried to find a financing program that will meet the needs of dealers who have been searching for a program that does not force them to sell their accounts or risk falling into the insidious trap of deferring the payment of equipment invoices and payroll taxes to try and build some working capital to run their business and still raise a family.
Dealers generally understand the longterm value of building equity by keeping all, or most, of their customers, but understanding is not doing. Working capital is difficult to accumulate unless you have other assets or a family that is able to assist you. Everyone should have a business plan that illustrates how they are capitalized and plan to build long term equity.
If you are considering joining one of the several dealer purchase programs that pay you a ‘high’ multiple for your newly installed accounts, think carefully and spend some time with your business plan. These dealer purchase programs do a good job of building equity and cash flow for themselves. They have you doing the service and replacing their attrition. They take care of themselves, and yes, you get a nice monthly check, but you have to produce every month and when you are ready to “hang-’em-up” all you have left is a pickup and a tool belt.
A solution to this difficult problem is at hand. EQUITY+PLUS is the new financing tool that bridges the cash you need each week with the equity creation that is the promise of tomorrow. Our solution is a short-term loan (36, 42, or 48 mo.) that allows you to pay for the installation of each qualified customer. You will generate immediate cash flow from the customer down payment and the loan advance for your selected term. At the end of that term, each customer will begin paying you directly because each of the customers entering this program continues to belong to you. The terms are simple, the contract processing is quick, and all of the residual cash flow will belong to you.
For whom is this new EQUITY+PLUS financing program designed?
- 1. Dealers who are installing new accounts with low or non-existent installation fees.
- 2. Dealers who understand that selling their alarm contracts does not build equity for the future.
- 3. Dealers who do not have the capital to invest in their businesses.
- 4. Dealers who have a reasonable net creation cost.
- 5. Dealers who understand their responsibility to install systems in a professional manner and to service them in a timely fashion.
- 6. Dealers who thought that their only alternative is to sell accounts to a Dealer Purchase Program.
- 7. Dealers who understand the value of a recurring cash flow cushion to protect themselves when times are slow.
- 8. Dealers who want to build cash flow for retirement, sending kids to college, or to travel to places they can only dream about now.
EQUITY+PLUS Program Highlights:
- 1. The Dealer is borrowing the needed funding and not selling the contracts.
- 2. Customer contracts funded for a loan term of 36, 42, or 48 months or a term that meets your special needs.
- 3. Funding advance multiples are very competitive with traditional loan terms and conditions.
- 4. Funding is targeted to be 48 hours after receipt of completed and verified paperwork.
- 5. Customer credit checks limited to $20 per month to the dealer.
- 6. Internet-based credit approval in minutes by smart phone or tablet.
- 7. Advance funding will reflect prepayment of monitoring costs for the loan term.
- 8. Pass-thru costs, such as Alarm.com, will be added to the monitoring rates to determine the overall monitoring prepayment.
- 9. Dealer monitoring costs and pass-thru’s may be less than rates paid monthly because they are prepaid for the entire term.
- 10. Dealers may use their own signs and stickers to build name recognition and brand their service.
- 11. Customer billing and collections are done by the funder at their expense and in the name of the dealer.
- 12. Qualified customers must be homeowners with 640+ credit ensuring that the dealer will have high quality customers who will stay with them for many years after the financing term.
- 13. Dealer has no financial or operating responsibilities, other than service and aiding collections for the life of the loan.
- 14. Dealer may fund any RMR amount up to a reasonable maximum (which is presently $99) based on cost of the equipment, installation charges, and amount of pass-thru’s.
- 15. Dealer management and supervision of the customer’s needs means lower attrition.
- 16. Dealer receives all leads and referrals received by funder or central station.
- 17. Dealer does not have to sign a UCC-1 document.
- 18. This program is non-exclusive and the dealer may opt out at any time by providing notice to the Funder.
Dealer and Contract requirements for EQUITY+PLUS
- 1. Minimum credit score is 640.
- 2. Credit is run by phone or tablet through an internet facility provided by the funder.
- 3. Dealer is obligated for a $20 credit check access fee each month.
- 4. Contract forms may be dealer or funder forms which include a three-day Right of Rescission notice, monitoring/sales contract and customer authorization for credit card/ACH payments.
- 5. All customer payments must be by credit card or ACH.
- 6. Dealer is responsible and has recourse, as in any loan, for the customer payments.
- 7. Dealer must be fully licensed for the state and locality in which they are doing business.
- 8. Dealer is responsible for any sales taxes due.
- 9. Dealer must hold full title to the alarm contracts without any liens, security interests, or encumbrances.
- 10. The contracts have not been sold prior to offering them to the funder.
- 11. Dealer shall maintain liability insurance, with errors and omissions coverage in a minimum amount of $500,000 per occurrence and $1,000,000 aggregate.
- 12. Loan advances are based on the loan term. A 36 mo. term is a 23x advance, a 42 mo. term is a 26x advance, and a 48 mo. term is a 30x advance to the dealer.
Why we call this program EQUITY+PLUS:
Quite simply, we all get into the security business so we can build for our future while doing something we can be proud of. Protecting our families and communities is very satisfying as a profession, but that is only half of it if we are not also building equity for our future.
Let’s take a quick look at how quickly your equity will build with just 20 installations per month. Our financing program will allow you to compete with bigger companies while providing the capital you need to maintain your cash flows.
20 Contracts per month:
1. Down Payment from the customer……$99.00
2. EQUITY+PLUS financing for 48 months ($50/mo. @ 30 multiple)…… $1500.00
3. Four years (life of customer averages 8 yrs.) of monthly payments…….$2400.00
Total revenue to you over 8 yrs…….$3999.00
4. Now add the market value of the contract at 35 multiple……$1750.00
Total Cash Flow available to you from one contract ……$4749.00
5. If you create 20 contracts per month (net of attrition) for this 8 year period you will have over 1200 accounts that you are billing at $50/mo…….$60,000.00
Plus another 700 customers still in the finance program.
6. In that 8 year period you have created equity in your business of over…..$2,000,000
Call us now at 626-795-9199 so we can put a solution together that will give you the EQUITY+PLUS for your future and cash flow today to prosper in this competitive economy.