Dealer Communications Client: Savin Corporation Project Name: Dealer Financial Bulletin DFB-023 Description: From 1979-1980 I worked in the Dealer Finance Division of Savin Corporation, which made copiers and other office equipment. Our mission was to help Savin's network of independent dealers better manage their finances. With the help of a Big Eight firm, I developed an accounting manual, including an entire system of accounts, that dealers could adopt to their businesses. I also helped my boss inform dealers about the financing plans that were managed and funded by the corporation, like the following program. Sample Text: SAVIN RENTAL COPIER LOAN PROGRAM (1979) Bulletin No. DFB-023 Rental plans have become an increasingly important source of profit for dealers. However, while more revenue can be generated by a rental than a sale, the payback period of one year or more requires the use of long-term financing. As pointed out in Dealer Financial Bulletin #021, "Rental Financing," without adequate and suitably structured term financing, a rental program will create negative cash flow. Savin is happy to announce a new program that will help dealers obtain term financing for rental copiers by guaranteeing the dealer's loan from a bank. In these days of high interest rates, economic uncertainty, and increased competition for capital, this guarantee will give dealers an extra edge in securing the funds they need at the best possible rates. General Terms and Conditions The Guarantee is available for new Savin copiers only under rental agreements that are non-cancellable for a period of one year or more. A machine will be considered new up to six months from the date of the Savin invoice. The price per machine for the Guarantee is $70 for 700 and 800 Series machines; $100 for the 600. The dealer arranges with a bank of his or her choice to finance the "Placement Cost" of the machine for a period of up to 30 months in the case of 760 and 800 series machines and up to 36 months for 600 machines. The Placement Cost is 115% of the dealer's invoice price and includes the dealer's purchase price plus estimated costs of sales commission, delivery, and installation costs. Savin will not guarantee financing for rentals of more than 10 machines to a single customer of the dealer without prior written approval from our Credit Department. The dealer must pay Savin for all machines purchased under the Guarantee agreement within five days of receiving payment from the bank. If the dealer should default on the agreement: Savin will take back title to the machine(s) and pay the bank the unpaid principal, unpaid interest, and any late charges. If Savin decides to have the machines returned to it, the dealer is expected to return the equipment in good condition, except for ordinary wear and tear. The dealer will prepay all freight charges. To the extent that equipment is not in good condition, as determined by Savin's Technical Service Department, the cost of restoring it will be charged to the dealer. If a machine under the Guarantee is sold, the dealer will pay to the bank the outstanding principal and interest associated with the financing of the sold machine. This would also be true for a copier that is stolen, lost, destroyed, or damaged beyond repair. Savin has the right to audit the status and location of all machines under the Guarantee. The dealer will provide Savin with the information needed to perform such an audit. Procedure: The guarantee is made up of two separate agreements, one between Savin and the dealer and one between Savin and the bank. These agreements and other documents used in the program will be sent to all dealers by a separate mailing. When the dealer obtains the loan guarantee, he or she should send to the Credit Department: A signed copy of the Savin/Dealer agreement, with the initial transaction; and, A copy of the financing agreement with the Bank. Subsequently, monthly reports indicating additions, deletions, and substitutions to the rental equipment subject to the loan guarantee, including serial numbers, should be sent by certified mail to: Credit Department, Savin Corporation, Box 8000, Valhalla, N.Y. 10595. At the time of obtaining the loan guarantee, the dealer's bank should submit: An executed copy of the Savin/Bank agreement and, A copy of the financing agreement with the Dealer. Subsequently, a separate monthly report or a bank approved copy of the dealer's report, indicating additions, deletions, and substitutions to the rental equipment subject to the loan guarantee, with their serial numbers, and the outstanding balance of the loan should be sent by certified mail to: Credit Department, Savin Corporation, Box 8000, Valhalla, N.Y. 10595. In the event of default, the dealer should: Submit to Savin a copy of the letter of notification from his bank; Submit to Savin a copy of the customer's rental agreement with the dealer; Release title to the equipment to Savin by billing the serial number to Savin on a no charge invoice, together with any proceeds from its sale or rental and, At Savin's option, continue to service the equipment at customer's location, or purchase it from Savin, or remarket it and reinstall it, or ship it F.D.B. to the nearest Savin refurbishing center. Assist Savin in obtaining all documents transferring the Bank's right, title and interest in the copiers back to Savin. Any questions about the rental copier loan guarantee agreements, your Regional or Area Manager, the Dealer Finance Department, or Credit Manager.
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