Alleviating Concerns, Leveraging Expertise
In 2017, River Capital Finance was introduced to a building products company that was in need of hardware solutions support. At that time, the company was concerned about the obsolescence of its hardware and the capital that would be required to purchase updated hardware outright. We worked closely with them to create a financing program that took these concerns off the table entirely — connecting them with the devices and support they needed to continue doing what they do best.
Recently, and with their existing contract about to expire, River Capital was pleased to once again have the opportunity to work with the building products company on a new hardware solutions proposal. Thanks to our product and industry expertise, we were once again awarded the opportunity to serve the building products company. Our new 36-month hardware-as-a-service package included vehicle mounts, various handheld devices, servers, software solutions, and a comprehensive maintenance contract.
Benefits of Our Hardware Solutions to the End-User
We were able to structure the financing so that the new package was priced the same as the customer’s previous contract. This was a big win for the company, as they not only received brand-new devices but also software and maintenance to ensure they would have the reporting and technical support needed to maintain efficient use of their new hardware solutions.
Operationally, the fact that they were receiving new hardware was a significant benefit, as the devices offered newer features, functioned more efficiently, and provided better security. On the financial side, the new arrangement benefited the company in that the terms of the deal allowed them to forego buying out the lease, meaning they didn’t end up paying the market value for the equipment they’d used between 2017 and 2020, yet they were still able to get full use out of those devices during that period.
But apart from the operational efficiencies they achieved, perhaps the most significant benefit from having new devices was the fact that, had the building products company opted to purchase hardware rather than finance it, their cash outlay would have stood at around $250,000. By utilizing HaaS from River Capital, they were able to save an incredible amount of capital for more strategic uses as well as save time in getting the budget for such a purchase reviewed and approved. With HaaS, the company also paid no upfront taxes, nor did it have to log any depreciation.
Benefits to the Hardware Reseller
For hardware resellers, successful customer relationships are critical. Thanks to our new financing program, the reseller that the building products company had been working with was happy because the client’s concerns had been addressed and solved. A new solution had been put in place expediently with virtually no interruption to existing operations, and the reseller retained control of the account.
Because the customer’s older devices were beginning to show their age operationally and even financially, the reseller knew that finding a solution and getting it in place quickly needed to be a top priority. With River Capital, the building products company received the right equipment — at the right time and at a great price — to ensure production remained on track (and indeed even improved) without the company having to allocate capital or budget additional cash flow for a new solution.
The reseller also benefited here in that two deals were executed within a five-year term versus just one. Otherwise, the reseller would have had to wait for another renewal or even risked losing the customer to a competitor. Through our partnership with the reseller and work with the client, all relationships were strengthened and all parties benefited.
Benefits to the Hardware Manufacturer
In this deal, the manufacturer benefited because ultimately, all-new hardware was deployed, and the manufacturer maintained a presence in the account. This also meant that the manufacturer avoided “band-aid” repair or support solutions for aging, outdated equipment and that they wouldn’t experience any negative perception from the customer as the first batch of devices began to wear down. The customer received an entirely new hardware solution that elevated their experience with and perception of the manufacturer and strengthened the brand relationship between them.
Work with a Win-Win Partner for Your Next Opportunity
Whether you’re an end user that’s looking to take your hardware solutions to the next level, or you’re a reseller or manufacturer that wants to strengthen relationships with customers for the long-term, place your trust in River Capital Finance. We’ll work with you to create a winning strategy not just for today, but for the months and years to come.
Get in touch with our hardware solutions team today.