When a Midwest-based contract research organization sought to improve their competitiveness and enhance operating efficiencies, it became clear that extensive laboratory equipment upgrades would be necessary. Items slated for upgrades included spectrometer systems and barcode scanners, as well as new data management software and supporting hardware.
The total cost for these upgrades tallied at $1.1 million; traditional financing was not an option, due to debt covenant restrictions with their bank. The company considered standard equipment leasing but soon rejected the idea because they wanted to keep the equipment longer than most vendor agreements allowed. Moreover, the headache of entering into separate lease agreements with multiple vendors was unappealing.
First American was able to come in with a 48-month fixed fair market value (FMV) lease package that would meet all of the company’s needs. The lease included a known purchase price at the end of the term, no usage restrictions and attractive finance rates that their vendors were unable to match.
These cost-effective and business-friendly terms meant the company could maintain existing bank relationships and avoid balance sheet implications. Additionally, financing all of the equipment purchases under a single, consolidated lease program meant they could avoid the need (and hassles) of multiple leases from multiple vendors.
Once the upgrade project was streamlined, the company was able to shift its focus back to strategic initiatives. With their laboratories fully equipped with cutting-edge technology, the company embarked on new marketing campaigns to further its reputation for innovation in their industry.