Siemens Smart Infrastructure Finance PartnerInformation Pack

Smart Infrastructure
Finance Partner
Information Pack
Maximise your opportunities offered
with SFS leasing arrangements.
siemens.co.uk/vendorfinance

Why partner with
Siemens Financial Services?
With Siemens Financial Services (SFS) as your premier financing partner you can increase
your sales, grow your business and improve your profitability. Whether your customers
are small to medium sized businesses or large corporations, Siemens’ innovative financial
products will help you build long term customer relationships.
Your success is our success too. It’s a simple
philosophy based on integrity and our ability
to build long-term service orientated
relationships. That’s why we employ friendly
and dynamic people who understand your
market and the issues you face – driving
sales, improving cash flow, adding value to
each sale and improving customer relations.
What is leasing?
Leasing is a contract between a leasing
company (lessor) and an end user customer
(lessee), giving the lessee the use of
equipment in return for periodical rentals.
It is a well-established tax efficient method
of financing which helps you sell more
effectively by making it easier for your
customers to choose the right equipment.
Having concluded the negotiations with your
customer for the equipment and terms, the
lessor then buys the equipment from you
and rents to your customer (Figure 1). The
lessor retains ownership of the asset in
return for the periodical rentals over an
agreed period, typically the working life
of the equipment.
Figure 1.
Installs equipment
Siemens SI
Partner
Pays for equipment
Periodic rentals
Customer
02

The benefits of leasing
To your company
A leasing arrangement with SFS provides the ability to increase turnover, maintain margins
and improve cash flow. Our offerings have been designed to be used as a powerful sales aid to
support your business activities and should become an integral part of your sales process.
Increased turnover
The most common barrier to closing a deal is price, however with
SFS this is overcome by offering an affordable alternative to capital
expenditure – an SFS leasing agreement. You will be paid for the full
price of the equipment when the contract is activated, and the enduser
rentals are spread throughout the lease period. Thus the
opportunity to increase sales, as measured in both unit volume
and value per unit, is improved.
Enhanced profitability
Cash price negotiations with the customer frequently develop into
discount conversations. Quoting an affordable SFS rental price
avoids the need to succumb to pressures to reduce prices, thereby
maintaining sell price which ultimately delivers greater profitability.
Improved cash flow
By using SFS leasing products you can reduce requests for
credit terms and the resource needed to follow up, enjoy
simple administration and immediate payment.
Customer base
Maximise the potential of your customer base with end
of lease notifications and upgrade opportunities.
SieSmart
Our online tool, SieSmart, allows you to easily integrate finance
into your sales proposition. With training and support from our
dedicated team you will be able to:
• Calculate rentals
• Create and submit proposals
• View your pipeline as an individual or a manager
• Receive instant credit decisions
• Print documentation
• Email documentation to the customer using e-signature
All of this brings speed, accuracy and efficiency to your sales
process which helps reduce the cost of sale.
Smart Infrastructure Partner Information Pack | Siemens Financial Services

The benefits of leasing
To your sales force
Leasing can be a highly effective sales tool when used as part of your sales process.
It can help you to sell more effectively by making it easier for your customers to
choose your equipment. Most customers appreciate that growth and profit are
generated by using the equipment and not by owning it. Therefore, leasing
represents a realistic and affordable alternative to outright purchase as well
as providing the following benefits to your sales activities:
Higher sales value
Leasing helps customers spread the cost of the equipment
acquisition. Selling can therefore be on the basis of the customer
need rather than the size of the customer’s capital budget.
Flexibility to upgrade
The ability to upgrade provides an opportunity for your customer to
change the specification of the equipment in the event their needs
change. This is extremely difficult when equipment has been
purchased outright.
Shortened selling cycles
Research has shown that customers who buy their equipment via
cash only replace their equipment on average every seven years,
however those using lease replace their equipment on average every
3 years which reduces your sales cycle and creates more
opportunities.
Increased commission
Using SFS’s leasing products help your sales force avoid the
need to negotiate discounts, thereby maintaining margin and
improving commission.
An easier close
Quoting an affordable rental payment, as opposed to the full price of
the equipment, avoids the most common objection to a sale: price.
04

To your customer
Thousands of businesses throughout the UK choose to lease equipment through
SFS because of the advantages it offers over other forms of finance:
Conserves working capital
Outright purchase of equipment may restrict business’ resources.
Leasing allows customers to save working capital for other projects
– such as marketing, training and product development.
Upgrade options
Leasing allows businesses to stay ahead of the changes in technology
and respond to competitive activity. Customers can upgrade their
equipment with ease, either during or at the end of the lease, to
accommodate changes in circumstances.
Convenience
The documentation is simple and is taken care of by the partner and
SFS. The finance is arranged to suit the equipment, making the
overall acquisition simple and easy whilst ensuring the term of the
agreement is in line with the useful life of the equipment.
Easier budgeting
As lease payments are fixed, unlike an overdraft or other methods
of funding, this allows for simple and easy budgeting for the
agreed term.
Future credit
Customers electing to lease equipment leave existing lines of
credit intact, which can be used as necessary in the future.
Tax efficiency
100% of the rentals can be deducted from taxable profits which
may reduce the overall cost of renting the equipment.*
*For more information about tax efficiency please contact your accountant.
Smart Infrastructure Partner Information Pack | Siemens Financial Services

Selling the finance facility
Sales negotiations with any customer
interested in buying equipment invariably
focus on two inter-dependent areas:
a) The equipment best suited to the
customer’s requirements.
b) The need for finance to acquire
the equipment.
Only a very small percentage of companies
acquiring capital assets actually do so using
their existing cash reserves, the majority
seek some form of financing arrangement.
Many equipment suppliers are recognising
the importance of leasing as a sales tool that
enables them to sell more. However, the full
potential of leasing can only be realised if
the financing arrangement becomes an
integral part of the sales proposition.
The following section therefore provides
some guidelines as to how this is
best achieved.
Using leasing to overcome objections
Objection – Price
The majority of customers express an
objection to the cost for one of two
different reasons:
a) They think they can’t afford the equipment
because they either don’t have the cash or
there is no provision in the budget.
Solution: If the customer is making a profit
they are likely to be able to afford the
equipment. Manageable lease rentals are
met out of the revenue budget and are
spread throughout the duration of the
agreement. Moreover, in some cases the
savings in time and efficiency resulting from
the use of the equipment will reduce the
actual costs. For those companies paying
corporation tax, the rentals can be deducted
against taxable income which further reduce
the net cost of the equipment.
b) They believe the benefits offered by the
equipment do not match the cost required
to acquire it.
Solution: The customer finds it difficult to
assimilate the cost versus benefit
relationship because the perception is based
upon the total cost of the equipment versus
the short term advantages of ownership.
Presenting the cost as an affordable rental,
paid over the life of the asset, helps promote
an accurate cost versus benefit analysis.
Objection – Value (“It’s not worth it”)
The customer is only considering the initial
outlay rather than comparing the cost and
efficiencies that come with the equipment
together with other costs they may have
within the day to day running of
the business.
Solution: By breaking down the cost,
sometimes into a weekly value, you can
compare to office expenditure – e.g. tea
and coffee supplies.
Handling customer objections
Given the large number of UK businesses
that already use leasing (more than 90% of
the Times Top 100 Companies, 9 of the 10
leading firms of chartered accountants and
some 90% of councils), one of the easiest
ways of overcoming an objection is to preempt
the issue by assuming that your
customer will have to consider how they will
fund the equipment. Therefore, leading with
lease costs would be an accepted assumption
and is very commonplace within the market.
06

Leading with lease
Leasing can be introduced at the very early
stages of the negotiations. The benefits of
using the equipment are related to the rental
price, making it straightforward for the
customer to understand the true cost
justification of acquiring the equipment.
Using leasing to reduce the potential need
to discount
Most potential customers demand discounts
on cash purchases:
• As a matter of course because they lose
nothing if they ask.
• They are seeking “the best” deal for
their organisation.
Leasing helps to overcome this challenge.
Experience shows that customers are far less
likely to ask for a discount on a leasing figure
than a cash price.
Summary
Action 1
Calculate quarterly/
monthly cost
• Be clear with your equipment costs,
terms and rates.
• Make comparisons.
Action 2 Lead with leasing • Always assume there is a leasing need.
Action 3
Overcome objections
Use comparisons to overcome:
• “I can’t afford it”
• “It’s not worth it”
Only a very small percentage of companies
acquiring capital assets actually do so using
their existing cash reserves”
Smart Infrastructure Partner Information Pack | Siemens Financial Services

Administrative procedures
As an approved partner you can benefit from
using SFS’s leasing facilities as a sales tool.
You can introduce leasing as part of your
sales process using the enclosed guidance to
help you. Having a facility with SFS does not
make you an agent and therefore you should
not make any statement, warranty or
representation on our behalf in relation to the
leased equipment, nor should you vary the
standard terms of the documentation or
accept a leasing agreement on our behalf.
Information required
Before a lease is finally agreed the customer
must be approved for credit by SFS. In order
to enable us to undertake this task you must
supply certain information. To ensure a fast
response to leasing proposals this information
is usually given to SFS by our online portal
SieSmart, by email or telephone.
The information required is dependent of the type of customer
and the value of the proposed lease:
For every leasing
proposal SFS requires:
a) The customers full trading style.
b) The customers address, including postcode.
c) Details of the equipment to be financed, including cost.
d) The proposed terms of the lease, i.e. duration, rental,
frequency of payment.
For Limited
Companies and Plc’s
a) Company registration number.
b) If the company is less than three years old, details of parent
company and structure.
For Sole Traders
and Partnerships
(less than 4 partners)
a) Time in business (minimum 3 years).
b) The full name(s) and home address of the sole
trader/partners.
c) Date of birth of all partners.
d) Consent to perform credit search.
e) Depending on the value, we may require
up to date accounts.
Partnerships with
more than 3 partners
a) Time in business (minimum 3 years).
b) Depending on the value, we may require
up to date accounts.
08

The credit approval process
Once SFS has received the relevant
information detailed above, we will
then start the credit vetting process.
We understand speed is a key factor in
today’s service delivery so have designed
automated decision making systems to
support this. Whilst the majority of decisions
are automated and instant, we still offer a
personal touch for the rest. On occasions it
will revert to manual underwriting if it is
deemed necessary for us to review the
application in more detail. You can also
present us with the credit application
via email or telephone. We aim to make
a decision on all credit applications
within 4 hours.
Declined proposals
There may be times when SFS declines a
proposal. In most cases this is because the
customer will be unable to meet its rental
commitments throughout the term of the
lease. In some cases we will be unable to
provide a finance solution for customers,
typically for the following reasons:
a) Adverse information or unsupporting
financial information.
b) Existing customers who are known
to be in arrears.
If SFS does experience difficulties in
reviewing your credit application you will be
informed at the earliest possible opportunity
and kept up to date with the progress.
Naturally, your role in expediting the credit
approval process cannot be overstated.
Smart Infrastructure Partner Information Pack | Siemens Financial Services

Administrative procedures
Completing the documentation
Before a lease can be finalised, the customer
must sign a correctly completed lease
agreement. The agreement only becomes
legally binding once SFS signs it.
A lease agreement is a legally binding
contract and as such it is essential that
it is completed correctly and in full. For
the most part, this is simply a matter of
transferring the information obtained
for credit approval onto the document.
The following checklist should help
ensure that this is undertaken correctly:
a) Check the customer’s legal trading style.
b) Give full details of the equipment to be
leased, including make, model and, where
possible, serial numbers, peripherals,
condition and location of equipment.
c) Complete all the relevant boxes of the
Terms of Hire section. Never ask a
customer to sign a blank agreement.
d)Ensure that the signatory is authorised
to sign a legal agreement.
e)Under the Consumer Credit Act, regulated
customers must be provided with the
‘customer copy’ of the agreement after
it has been signed.
To improve speed and accuracy you can use
our online documentation facility through
SieSmart which will take care of this for you.
Delivering the equipment
Upon delivery of equipment the customer
will either need to sign a Certificate of
Acceptance or in some cases we will
undertake delivery checks.
Invoicing SFS
Following the delivery of the equipment, the
correctly completed documentation and the
invoice for the equipment should be
submitted to SFS. The value of the invoice
should relate directly to the calculation of
the customers rental payments.
Full details of the equipment, the customer
name, delivery address, all model/serial
numbers and whether it is new, refurbished,
re-manufactured or used should be included
on the invoice. SFS will confirm the
equipment has been delivered and then
make a payment via CHAPS or faster
payments. Payment is made on the same day
we receive complete and correct
documentation and invoice.
We understand speed is a key
factor in today’s service delivery
so have designed automated
decision making systems to
support this.”
10

Calculations
Invoice value from the rental Invoice value =
Lease rate from the rental Lease rate =
Rental x 1,000
Lease rate
Rental x 1,000
Equipment cost
Equipment matters
All equipment
All equipment should be clearly documented on the agreement,
together with any peripherals or software. Consumables of any kind
should not be included in the rental.
End of term
At the end of the agreement, it is SFS’ usual practice to sell the
equipment to the company that supplied it. This arrangement also
applies if we receive payment of a settlement figure from a third
party or if, SFS has to terminate the lease.
Please refer to your Trading Agreement for details pertaining to your individual scheme.
Smart Infrastructure Partner Information Pack | Siemens Financial Services

Servicing your customers’ long term
leasing requirements
It is likely that a substantial number of your
customers will already have leased
equipment. You will therefore need to
understand how to replace that equipment
and the necessary procedures for
administering the new agreement.
Opportunities throughout the term of the
agreement when the customer may consider
equipment replacement fall into three
distinct categories:
Changing equipment requirements
Type of change
Calculations
Co-terminus/ add-ons –
adding new equipment to an
existing specification
Add-on rental
equipment
=
Add-on x
Special rate
1,000
Upgrade for SFS customers
exchanging existing equipment
for new equipment
Rental (inclusive
of upgrade figure)
=
(Upgrade figure +
new equipment
cost) x Rate
1,000
Upgrade for non SFS customer –
third party settlements
Rental (inclusive
of settlement
figure)
=
(Settlement figure
+ new equipment
cost) x Rate
1,000
Fixed term agreement
End of agreement opportunities
Minimum term agreement
12

a) Opportunities due to change in the customer’s requirements or increasing maintenance costs.
b) Opportunities that result from the agreement reaching the end of its minimum term.
c) Opportunity to take advantage of new technology or cost savings.
Requirements & Process
• A new agreement must be signed by the customer.
• The value must be at least £1,000.
• Covers the new equipment only.
• Must end at the same time as the original lease.
• SFS will provide the outstanding term of the existing agreement
at the appropriate leasing rate.
• The leasing document is then completed in the usual way.
• This procedure increases the amount of credit, therefore you will need
to ensure the customer is approved for the new amount.
• Ascertain the upgrade figure from SFS or SieSmart (sum of money required to
cancel the existing arrangement).
• Calculate the rental payable and propose the new agreement.
• The customer should be approved and the equipment delivered before
invoicing SFS for the new amount PLUS the upgrade figure.
• Obtain the settlement figure from the third party.
• Calculate the rental payable and propose the new agreement.
• The customer should be approved and the equipment delivered before
invoicing SFS for the new amount PLUS the upgrade figure.
• The equipment must be uplifted.
• Opportunity to discuss future equipment requirements.
• It is likely that, after 3 or more years of use of the original equipment,
the customer’s requirements will have changed.
• You can arrange for SFS to send you notification of those agreements which are reaching
the end of their term (this can also be accessed through SieSmart).
• This information may then be used as a basis for future equipment discussions
with the customer.
Smart Infrastructure Partner Information Pack | Siemens Financial Services

What happens when things go wrong during
the agreement?
Unfortunately, from time to time, problems
can occur. These are most likely to be
associated with payment difficulties or the
performance/functionality of the equipment.
SFS has a dedicated Customer Service Team
which is specially trained to be of assistance
in these situations and will seek to resolve
problems as soon as possible. It is in the
interest of long term customer loyalty that
we work together where appropriate.
In most cases however, SFS will endeavour to
come to an arrangement with the customer
independently. We endorse a sensitive
approach to all customer service functions,
particularly with respect to Consumer Credit
Act regulated agreements. With more than
50 years of experience in the leasing industry
we have designed and introduced processes
which promote payment of overdue accounts
without jeopardising customer relations.
As we rely on you to only introduce
transactions that are enforceable and the
customer is clear about their obligations,
you maybe asked to give SFS assistance,
particularly if the problem relates to a
malfunction of the equipment or some
other misunderstanding regarding the
equipment supply.
As an approved partner you can
benefit from using SFS’s leasing
facilities as a sales tool.”
14

A glossary of commonly used leasing terms
Capital allowances
The amount of depreciation permitted by the UK Inland
Revenue to be offset against a company’s taxable profits.
Finance lease
A finance lease is a way of providing finance – effectively a
leasing company (lessor or owner) buys the asset for the user
(usually called the lessee) and rents it to them for an
agreed period.
Guarantee &
Indemnity
A guarantee of payment of the leasing obligations. Takes effect
in the event lessee fails to pay and is typically offered by an
affiliated company or an individual (e.g. director).
Lease
Lessee
Lessor
Secondary period
Useful life
Contract between a lessee and lessor for hire/rental of
equipment. The lessor retains ownership of the equipment
throughout the duration of the agreement.
The user of the equipment being leased.
The owner of the agreement and equipment being leased to
the customer.
The period in a finance lease which follows the original term.
Duration of time in which equipment has economic value and
can be reasonably used.
Underwriting
The process whereby the lessor decides whether to enter into
the proposed agreement on certain terms.
Writing down
allowances
A depreciation allowance, available on capital asset purchases,
where each year’s allowance is based on a percentage of the
written-down value at the end of the previous year.
Co-terminus
Secondary agreement that runs in parallel with other
agreement(s) – usually with additional equipment.
Smart Infrastructure Partner Information Pack | Siemens Financial Services

Our contact details
Sales persons name:
Contact number:
Email address:
UK Headquarters
Sefton Park
Bells Hill
Stoke Poges
Buckinghamshire SL2 4JS
Tel: +44 (0) 1753 434 000
Fax: +44 (0) 1753 434 499
Manchester Office
Sir William Siemens House
Princess Road
Manchester M20 2UR
Tel: +44 (0) 161 446 6851
Fax: +44 (0) 845 605 3780
info.sfs.uk@siemens.com
www.siemens.co.uk/finance
Siemens Financial Services is a leading provider of innovative finance
solutions to UK businesses and public sector organisations. With more
than 250,000 customers Siemens has arranged finance for 90 of the
current FTSE 100 companies and more than 50% of NHS trusts and
local authorities.
Active in a wide range of markets, Siemens provides solutions ranging
from £1,000 to many millions for a diverse range of financing needs,
including equipment and asset finance, treasury services and working
capital finance. It is independently recognised as a business finance
leader in a number of its core markets.
With offices throughout the UK, Siemens Financial Services has more than
260 employees and is headquartered in Stoke Poges, Buckinghamshire.
Siemens global headquarters is in Munich, Germany.
Siemens Financial Services is a member of
the Finance and Leasing Association.