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Managed Services Solutions
Our unique program gives service providers the flexibility to market a total solution by offering a process to finance the equipment component of a managed services agreement.
Complete Solutions to Keep Service Providers Competitive
Managed Service Solutions, a part of PNC Equipment Finance, is a recognized leader in the capital markets, building innovative programs designed specifically for the needs of the managed/outsourced service provider. Today's competitive environment requires service providers to seek alternative ways to improve their business to ensure they are aligned with the ever changing business climate. PNC provides a leading solution that helps service providers improve the way they acquire capital, eliminate risk and improve margins.
Customers are looking to service providers to supply, implement and manage complete solutions, including services and equipment, capable of cost-effectively supporting their business goals and changing environment. We have the experience, knowledge and financial strength to help you meet the challenges of staying competitive and resolving capital needs, inherent in marketing a managed service solution. Distinguished by outstanding customer service, we continue to build our reputation by creating a collaborative process that identifies our common goals and customizes the program to the requirements and your needs as a service provider.
Our Track Record
11 Years
Average Tenure of a PNC Vendor Relationship
14+ Billion
Assets Under Management
4th Largest
Bank-Owned Equipment Finance Company
Our Financing Solutions
What We Do
Our unique program gives service providers the flexibility to market a total solution by offering a process to finance the equipment component of a managed services agreement.
The solution leverages the credit strength of the customer to finance the equipment, and in many cases the service provider may receive up-front revenue recognition related to the equipment component as well as other financial and operational benefits.
Today, many providers directly obligate themselves to the equipment debt or pay cash, which can have negative financial effects, such as:
- Difficulty in obtaining the equipment financing
- Reduced liquidity
- Slowing of revenue recognition
- Constraining financial ratios and covenants
- Increasing risk by assuming the debt obligation
- Assuming the long-term credit risk of the customer
- Prolonging ROI
Benefits of the PNC Managed Service Solution Program
- Access to capital to fund the equipment component of a Service Agreement
- Market a complete managed/outsourced solution
- Recognize revenue up-front on infrastructure used in the solution*
- Finance equipment with non-recourse debt[1]
- Eliminate long-term credit risk of the customer
- Improve operational margins and financial ratios
- Improve ROI payback time
- Control of the equipment provides better operational efficiencies
Products and Programs
Compare Traditional Lease Financing versus PNC Managed Service Solutions
Traditional Lease Financing
The lease transaction for the equipment is separate from the service contract and the service provider is obligated to the debt, regardless of any cancellations or breach of the service contract. The lessor would purchase the equipment and the service provider would be the lessee.
PNC Equipment Finance's Managed Service Solutions
The service provider and PNC enter into a financing arrangement. PNC will review the terms between the service provider and the customer and may request additional terms to be included. The service provider is not obligated to the credit risk in the contract, but may have an agreed upon level of obligation if the contract is terminated due to a breach in service.
In order to illustrate the value of PNC Equipment Finance's managed services, a comparison of traditional lease financing versus the MSS solution is provided below.
MSP Bundled Solution Scenario
- $9 million, 36-month MSA with the customer to provide a total outsourced solution
- Equipment cost required in the MSA to support the customer - $3.6 million
- Monthly service fees to the customer - $150,000
- Equipment payment included in the monthly fees to the customer - $100,000
- Total monthly solution fee to the customer - $250,000
Traditional Lease Financing |
PNC Managed Service Solutions |
|---|---|
| Service provider enters into least agreement | Service provider enters into agreements with MSS |
| $150,000 service fee is recognized monthly | $150,000 service fee is recognized monthly |
| Service provider is responsible for debt obligation | Service provider is non-recourse on the debt obligation |
| $3.6MM of equipment sales is recognized over 3 years | $3.6MM of equipment sales is recognized up-front |
| End-user defaults, service provider still pays the debt | End-user defaults, service provider not obligated to debt |
| End-user defaults, service provider has pro-rata equipment sale | End-user defaults, service provider still has 100% sale |
| Service provider breaches contract, service provider pays debt | Service provider breaches contract, re-markets equipment or pays the debt |
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