Several analysts have asked us (Verari Financial Services) whether or not the global credit crisis is having any impact on the VFS leasing business. Since VFS is such a new business for Verari, (launched June, 2008), this has been a difficult question to answer - especially considering that our lease growth rates have continued to increase monthly in the last four months. The crisis has definitely impacted most in one way or another, but IT leasing is uniquely positioned to help alleviate the strain created by the reduced availability of credit. Our “gut” has been that since access to credit has tightened and loan rates have gone up --- even for well-managed, publicly traded companies --- that IT lease financing would perhaps grow faster.

This recent Wall Street Journal article from October 27, 2008, supports our hypothesis:

“IBM, which has its own financing arm, says it has seen an "uptick" in the number of customers looking for credit. The Armonk, N.Y., company has responded by launching a new program this month that offers loans at below-market rates with no payment or interest due for 90 days.
Underwriting customer purchases "gives us a competitive advantage," Mark Loughridge, IBM's chief financial officer, said during a call with analysts on Oct. 16. IBM's financing unit had $24.5 billion in loans outstanding at the end of 2007.
Cisco also uses its own cash reserves to drive sales. The networking giant financed more than $4 billion in customers' purchases, or about 10% of sales, in its fiscal year ending July 26. That's up from $2.7 billion the previous year. Oracle tapped its reserves to finance $1.1 billion, or about 15%, of new software sales in the year ended May 31, up from $891 million the previous year.”

In short, IT leasing has become a competitive advantage for more and more businesses that partner with IT lessors capable of providing creative, low-interest leases with flexible payment plans. IT customers get the equipment and current technology they need now in order to compete and serve customers best in their respective industries.

Customers have certainly grown familiar with the convenience of leasing IT equipment over the last 30 years, but now more than ever IT and Finance departments are turning increasingly to IT lessors as their chief IT funding source since they are unable to get competitive loans on their own from distressed banks. So as banks continue to be prudent and cautious lenders to businesses --- perhaps the most since the Great Depression --- the amount of IT assets managed by IT lessors should continue to grow healthily. There is no better time to be leasing IT equipment than today.

I’m very excited to introduce Verari Financial Services (VFS) --- the new lease financing arm of Verari Systems, Inc. I hope that by offering flexible lease financing alternatives to our customers that VFS will help them to more easily cost-justify and begin the data centers and IT projects of the future! Since this is my first blog, I would like to summarize the VFS program offerings.

VFS is providing one-stop, flexible lease financing solutions for all asset classes. VFS leases, for example, can include hardware, software, and professional services, as well as other kinds of property such as data centers and buildings. VFS provides personalized asset management and asset recovery services, including technology refresh and trade-in credit programs, to help customers manage shortening technology cycles. So I want our customers to take advantage of all the integrated benefits of leasing --- everything from predictable, level monthly payments, to cash conservation, to scheduled technology refreshes, to trade-in credits for older IT assets, to the elimination of obsolescence and disposal risks.

We want to help customers meet their changing business demands by allowing for flexible terms and payment options in our leases. If customers need to keep their equipment longer than first expected, for example, VFS leases can be renewed easily with low cost extensions or purchase. Finally, VFS will dispose of equipment in an environmentally responsible and secure manner, complying with local and federal laws.

•         Very competitive lease rates

•         High residual values built into each lease for lower monthly payments

•         Technology refresh program for smoother shifts to new, more powerful and energy-efficient technology and easier disposition of old technology

–        Easy disposition of old technology

–        New technology uses less power & space and is more reliable & faster

–        Saves $ over IT life cycle; improves staff productivity

–        Greenest way to acquire and retire IT assets

•         Trade-in program that helps reduce stranded IT assets

–        Trade-in credit offered on all vendors’ equipment

–        Excellent trade-in values due to strong remarketing arm

•         Lease financing solutions for all kinds of IT projects, such as data center consolidation

•         Disciplined planning for the entire IT asset life cycle, including safe/secure equipment disposal services

•         Personalized IT asset life cycle management services for a long-term partnership

–        Equipment tracking/reporting

–        Secure/safe equipment disposal in accordance with laws