Frequently Asked Questions

You've Got Questions - We've Got Answers

 

Just click on the questions below to get the answers you need. And if you don’t see your question here, feel free to email us at contactus@ecologicleasing.com or call us at 703-791-1930 and we’ll be glad to give you more information about our services.

 

1. ABOUT ECOLOGIC & WHAT WE DELIVER


2. ABOUT THE PROBLEMS WE SOLVE FOR CLIENTS

3. ABOUT ECOLOGIC’S FINANCING PROGRAMS

The Answers

 

1. ABOUT ECOLOGIC & WHAT WE DELIVER

So, what does Ecologic Leasing Services do?
Ecologic Leasing Services provides leasing operations, lease accounting, and asset management services on a private-label, outsourced basis. Our experienced operations team, financial network, documented processes, and proven software solutions will give you the confidence you need to succeed by helping you carefully manage your leasing business to your standards while providing the meaningful insights you need to measure performance, make decisions, and advise the executive team.

What are Ecologic’s core capabilities?
1. Experienced people.
2. Deep industry knowledge of leasing operations, equipment finance, lease accounting, and funder relationship management.
3. A scalable technology platform for transaction, asset, portfolio, and funder management.
4. A vast global funder network.

These are our capabilities and our corporate assets, and we use all of them everyday to create value for our clients.

What exactly is “Leasing Operations, Lease Accounting, and Asset Management Outsourcing?”
Leasing Operations, Lease Accounting, and Asset Management Outsourcing unifies essential leasing management functions through consistent processes delivered by a solution provider such as Ecologic. As your outsource partner, we ensure that the processes works, that they interface effectively with other company functions, and that they deliver the intended outcomes. This flexible, powerful approach delivers lease administration and servicing functions and manages all leases and equipment assets across their lifecycles – without the hassles or fixed costs of managing your own leasing operations and technology platform. Our solution provides shrewd financing, and unparalleled compliance, crystal-clear visibility, and expert insights that allows your management to concentrate on corporate performance instead of worrying about leasing operations and asset management.

Please define the “Full-Lifecycle of Leases and Assets”
This means the start-to-finish cycle of either a lease or an asset. With leases, the lifecycle starts with vendor proposals and term sheets, involves the decision to acquire and lease, continues through the process of pricing, documentation, booking, and lease-payment, and ends either with a mid-term event or the scheduled end-of-term, when the lease obligation is extinguished. For assets, the “full-lifecycle” begins with proposals and term sheets from the vendor, the decision to acquire and lease by the lessee, and then proceeds through the safe disposition of the asset by the owner or lessee of the asset.

In what kind of assets does Ecologic have expertise?

  • Material handing equipment, such as forklifts
  • Manufacturing equipment
  • Computing, networking, and storage equipment
  • High-tech equipment
  • Office products
  • Software
  • Agricultural/Farm equipment
  • Distributed generation and alternative energy equipment
  • Enivronmental equipment
  • Industrial vehicles
  • Fleets
  • Airplanes

What ticket sizes does Ecologic support?

  • Small $10,000 - $100,000
  • Medium $100,000 - $2,000,000
  • Large $2,000,000 - $25,000,000
  • Individual lease transactions typically do not exceeded $25 million

What specific lease accounting and tax services does Ecologic offer?

  • Depreciation classification for accounting and tax purposes
  • Lease accounting classification and record keeping for accounting and tax purposes
  • Deferred tax accounting
  • Sales tax determination, calculation, filing, and accounting
  • Property tax determination, calculation, filing, and accounting
  • Please note that Ecologic is not an accounting firm. We work with each of our clients to ensure that policies, processes, and procedures are fully approved and documented and our clients have the proper compensating controls in place for internal compliance purposes.

Please describe Ecologic’s Software Services
We deliver our Software Services using two software services: LeaseAccelerator and PortfolioManager. LeaseAccelerator is used for all of the services that Ecologic provides to Lessees. LeaseAccelerator is used for most of the services that Ecologic provides to Manufacturer, Vendor, and Service Providers. We also use PortfolioManager for those Manufacturers, Vendors, and Service Providers for whom we perform billing, collecting, cash application, accounting and tax services.

LeaseAccelerator all client stakeholders involved in a transaction, delivered on a scalable, secure technology platform. Our clients access LeaseAccelerator for all of the software services that they use, whether it is workflow, transaction management, document management, system interexchange, or reporting. These software services help our clients:

  • Capture all pertinent asset-level details
  • Generate, capture and index all required documents
  • Perform asset-level accounting, tax, and portfolio management
  • Provide Web-based, centralized reporting and analysis – from “big picture” views to asset-level details – to a wide variety of stakeholders
  • Manage the end-to-end lifecycle of the equipment finance supply chain and assets

We leverage our software platform throughout the lease and asset life cycle. Software features include:

  • Automatic routing of documents by email
  • Automated faxback of signed documents
  • Line-item reconciliation across documents from heterogeneous sources
  • Management of assets, leases, customers, business unit, and cost centers – for bottom-up accounting rather than top-down allocations, facilitating compliance and decision-making
  • Complete end-of-term accounting capabilities complemented by our end-of life management services
  • Detailed status tracking, change management, and reporting, including a complete audit trail that allows authorized users to track the person, date, and change
  • Immediate, Web-based access to any document —whether generated by LeaseAccelerator or captured from an external source
  • Hierarchical, role-based security
  • Security at the application, database, and network level
  • Long-term data warehousing and back-up
  • Software services hosted in two replicated hosting facilities in North America
  • Easy integration with enterprise applications to facilitate reconciliation and data integrity


LeaseAccelerator is an automated, web-based service that supports the end-to-end process of lease establishment and asset tracking by facilitating transactions and document flow among the multiple parties.

The system’s workflow, document management and transaction processing capabilities accelerate funder review and acceptance. And it automatically links together documents in the supply chain, making them accessible by schedule or asset.

Ecologic and our clients use LeaseAccelerator to create, send, and track acquisition requests, purchase orders, asset assignment and notification documents, certificates of acceptance, and lease schedules.

PortfolioManager is an asset-based lease accounting and portfolio management system. It provides an automated service for tracking and managing leases, assets, and risk, complete with robust, Web-based reporting capabilities. Ecologic uses PortfolioManager to perform asset-level accounting, including sales and property tax calculations.


2. ABOUT THE PROBLEMS WE SOLVE FOR CLIENTS

What problems did Ecologic’s clients face in leasing operations, lease accounting, and asset management prior to engaging Ecologic?

Our clients have faced an array of challenges before coming to us. Among these have been...

  • Lease management, accounting, and servicing issues getting in the way of larger business strategies
  • Highly decentralized asset management and leasing that made it hard to compile and analyze data for internal and external compliance and reporting purposes
  • Less than ideal terms or pricing, with no market benchmarks or competitive leverage for negotiating
    leasing programs with poor compliance and controls
  • A need for expertise and resources that exceeded the headcount budget
  • Avoiding leasing due to lack of insight into leasing operation performance
  • Ability to manage in-house leasing operations and technology development had grown overly complex, expensive and beyond the scope of existing resources
  • Outgrowing the current technology platform or processes as for tracking and managing the leasing business
  • Executives that wanted strong front-office transaction management
  • Executives that wanted to build a bullet-proof back office accounting capability

Why do clients rely on strategic outsourcing solutions from Ecologic?
The marketplace is crowded with point-solution providers. Our clients rely on Ecologic Leasing Services because we are a single- source with a unique vision and understanding of the role leasing operations and asset management outsourcing can play when attending to the details, driving innovation, transforming your organization, and creating ongoing value.

Here are just a few reasons to consider Ecologic:

  • When you outsource to us, we administer and manage your business processes, provide service according to defined metrics customized to your needs, and continuously improve the processes over time.
  • Our highly-skilled workforce is experienced in lease processing and asset, funder, and portfolio management, and trained to deliver consistent client service that emphasizes value and client success. Our team has deep industry knowledge of equipment finance operations and lease accounting.
  • Our experienced leasing team assumes responsibility for the design, deployment, management and enhancement of your customized outsourcing solution, building in quality and efficiency at every stage of the process.
  • We execute transactions on a scalable, secure technology platform, delivering a robust, asset-based lease accounting solution for portfolio management.
  • We help our clients control baseline costs while keeping up with market innovations.
  • We make leasing operations and asset management simple and affordable; it is much more expensive, difficult, and time-consuming to build these capabilities internally and deploy them in an integrated solution than it is to outsource to Ecologic.

What control or software related problems did Ecologic’s clients face prior to engaging Ecologic?
Among the challenges faced by Ecologic’s clients were...

  • Lack of controls, processes, documentation, data or reporting to meet compliance requirements such as Sarbanes Oaxley (SOX), etc.
  • Manual lease transactions that created unnecessary costs and complexity
  • Redundant data entry that resulted in inconsistent data and increased risks throughout the financial supply chain
  • Multiple, complex and non-version controlled spreadsheets that made it difficult to accurately track, manage and report on leasing operations
  • Lack of centralization and data quality/integrity that resulted in low quality of and lack of confidence in data
  • Poor documentation that made it difficult to locate key data points or specific answers to stakeholder or reporting questions
  • The need for better accounting of lease documents and assets across customers, business units, and cost centers
  • The need for better portfolio management and online reporting for stakeholders across the company

What problems did Ecologic’s clients face in funder management prior to engaging Ecologic?

Funder management challenges included...

  • Need for proof of the lowest capitalization costs and
    most favorable terms
  • Funder monopolization with no competitive funding
  • Funder management issues distracting clients from more strategic work
  • Saturated funder portfolios that caused liquidity concerns
  • Need for better structure, pricing, and service from funders
  • Need for private label, centralized billing and collecting

Why do clients rely on Ecologic’s Funder Management services?
Our clients want the freedom to switch funder relationships; and, unlike banks or leasing companies, Ecologic is funder independent. We help clients build leasing programs under their own brands, with a private-label program that centralizes the leasing data and simplifies leasing operations and asset management.

This empowers our clients to work with multiple funders, compete them continuously, and switch when appropriate.

Through our network of hundreds of funders across North America, we help clients establish strong funding relationships that match up with their business priorities. Our extensive network enables us to ensure our clients that they and their customers are getting the best and most competitive financing opportunities for their needs.

To ensure that our funders perform consistently for our clients, we establish funder relationships carefully, seeking funders who provide our clients with the competitive pricing and terms they want and the attention they need, while monitoring funders to ensure that they adhere to the protocols and standards of the leasing community.

3.ABOUT ECOLOGIC’S FINANCING PROGRAMS

How do the customers of a Service Provider benefit from Ecologic’s Service Agreement Financing Program?

  • Turn-key Solution – equipment, services, and financing bundled together
  • One price makes it easy to compare to alternatives
  • One contract – not multiples – makes it easier to buy
  • Services agreement only – financing is integrated into payments
  • Reduced legal costs and effort
  • Easier, better accounting treatment reduces operating expenses

How do Service Providers benefit from the Service Agreement Financing Program?

  • You can offer a total, turn-key solution for your customers
  • It’s easier to sell an integrated service than as a separate lease
  • It differentiates you from your competitors, who can’t offer this benefit to their customers
  • You have better customer control because they can’t change their equipment without you
  • You can lock in customers and pricing for many years
  • You have access to more credit with better pricing using your customer’s credit rating
  • Revenue recognition = balance sheet neutral vs. sale
  • Better cash, credit and budget management with off-balance sheet financing of customer premise equipment (no need to tie up your cash)
  • The opportunity for additional financing profits
  • Features all of the benefits of traditional vendor leasing programs (see below).

What are the benefits of offering a vendor equipment finance program?

  • Customer’s Needs: Creative financing and leasing structures can be offered to customers that cover a variety of equipment and products with terms strategically designed to enhance the product’s competitive position.
  • Vendor’s Objectives: A wide range of leasing programs can be designed to match the vendor’s sales and accounting objectives, the end-user’s requirements and competition within the product marketplace.
  • Market Expansion: The program enables vendors to reach a larger share of their market by providing purchasers with alternative means of acquiring the product, each designed to meet the purchaser’s specific financial needs.
  • Close Sales Faster: Lease payments can generally be approved quickly as part of your customer's operating budgets. Also, the ability to pre-qualify your customers for credit helps you determine early in the selling cycle what they can afford and if you want them as a customer in the first place, based on their credit.
  • Establish Larger Relationships: Since monthly lease payments are typically lower than loan payments, your customers can afford to acquire larger packages of equipment and services.
  • Administrative Freedom: Enjoy the benefits of a “captive” financing arm with none of the problems associated with funding, servicing and managing a financial services company through our private-label, competitive, wholesale funding model.
  • Expect Easier Credit Approvals, Cheaper Cost of Capital, and Better Terms: The diversified funding capability we have through our relationships with banks, financial institutions and leasing companies, gives us considerable latitude in structuring transactions that would not otherwise meet conventional credit guidelines. The bottom line: we say “yes” more often and deliver superior terms than traditional leasing companies.
  • Extend Profits: By focusing your sales effort on the low monthly payments with equipment leasing, you can help avoid price discounting, thus increasing your profit margins.
  • Pricing Flexibility: Opportunity for the vendor to exercise greater pricing flexibility.
  • Close More Sales: A large percentage of leases do not remain in effect for their entire term since equipment leasing makes it so easy to trade up to new technology. This means future sales for you and more lasting relationships with your customers.
  • Accounting Treatment: Vendor may receive sales accounting treatment.
  • Improved Liquidity: Provided by conversion of vendor’s long-term receivables to cash.
  • Market Control: Vendor can maintain the customer relationship as well as control the secondary equipment market by re-marketing off-leased equipment.

What is a Capital Lease Program?

Capital leases have the following characteristics:

  • installment purchases
  • little or no initial money required to purchase the equipment
  • lessee is owner for tax purposes and entitled to take deductions for depreciation
  • value of equipment is on lessee’s balance sheet

What is an Operating Lease Program?
Operating leases have the following characteristics:

  • The lessor owns the equipment and leases it out for a pre-determined term
  • The lessor takes the tax benefits
  • The lessee writes off the lease payments as a business expense
  • The off-balance sheet treatment for lessee determined by FASB 13 tests. If at its inception a lease meets one or more of the following criteria, the lease shall be classified as a capital lease by the lessee. Otherwise, it shall be classified as an operating lease.

Criteria:

  • The lease transfers ownership of the property to the lessee by the end of the lease term
  • The lease contains a bargain purchase option.
  • The lease term is equal to 75 percent or more of the estimated economic life of the lease property
  • The present value of the rents equals or exceeds 90 percent of the fair value of the leased property

What Are the Advantages of Equipment Financing for Your Customers?

  • Cash, credit and budget management – preserve cash and credit for core business instead of investing cash in depreciating assets
  • The entire cost is financeable: hard and soft costs
  • Debt-to-equity ratios are decreased and current level of financial liabilities reduced - improve measurements like ROE, ROA and reduce equity required to meet leverage targets
  • Flexible payment schedules (eg., seasonal cycles)
  • More advantageous tax treatment (i.e., an expensed operating cost rather than capital investment recoverable over a longer period of time)
  • Shift the risk of technological obsolescence to owner

What Are the Disadvantages of Equipment Financing for Your Customers?

  • Contracts may carry penalties upon cancellation
  • Potential higher real cost of acquisition, after taxes, when payments over the total term are considered
  • No ownership value of the property or equipment at the end of the lease term
  • Cost of removal is usually borne by the lessee if the equipment is not purchased or leased again
  • Loss of certain tax advantages such as accelerated depreciation