PSA: Integrators can get into RMR biz with new project financing program

‘It’s not a lease; it’s like a line of credit'
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Thursday, September 23, 2010

WESTMINSTER, Colo.—PSA Security Network’s Bill Bozeman says a new project financing program, announced Sept. 7, provides a realistic avenue for systems integrators get into the RMR business, as well as other benefits for the integrator and the end user.

“It really allows the integrator to do some substantial-sized projects without a negative impact on his cash flow,” Bozeman said. And, a better cash flow, he said, “allows the systems integrator to get into the managed services business.”

The program is open to all systems integrators who qualify, not just PSA Security members.

PSA Security’s Project Financing Program is the result of a collaboration among PSA, Integrator Support, based here, and Susquehanna Commercial Finance.

“It’s project financing that doesn’t require cash from the integrator. There’s no broker in the middle, so the rate is good for the end user,” Bozeman explained. “And it’s not a lease, the end user owns the equipment from day one, it’s more like a line of credit.” In addition, end users are able to take the tax benefits from depreciation, which is a selling point for the integrator.

The financing can be used for equipment, labor, warranties, maintenance and monitoring. “This is new and different, we will finance the entire project,” Bozeman said. Any project larger than $15,000 is eligible for financing.

The integrator can be paid progressively, based on a percentage of job completion, or “if they finish the job in 30 days, they will be paid in full, upon completion.” In addition, the integrator will be paid in full for one year of monitoring and maintenance upfront. The bank will continue to directly pay the integrator for monitoring and service, annually.

Bozeman emphasized that this does not mean that the bank owns the contract “The integrator owns RMR; they own the contract,” he said, an important consideration when the integrator wants to sell their company.

Bozeman has been beating the RMR-service-model drum for a while now, saying systems integrators need to “jump on the managed service RMR bandwagon.”

The burg guys are good at the RMR model because they do not have to spend tens of thousands of dollars up front on one project the way systems integrators do, Bozeman said. “That’s why there are so few systems integrators in the RMR business. They cannot cashflow that business model,” Bozeman said.

“With this program they can put on as many projects as quickly as they can and have zero impact on cash flow.”