1. A brief overview of the entity and its activities, whether that be a state or local government, educational institution, or commercial enterprise.
2. The organization’s core values, such as integrity, accountability, and innovation.
3. The intended purpose of the RFB. For example, the purpose may be a lease to finance the purchase of technology for teachers or the executive team.
4. The window of time in which services are to be offered, such as July 1, 2026, through June 30, 2028, if applicable.
5. Scope of the RFB. For example, the scope may be defined as including laptops, Chromebooks, PCs, printers, and other technology devices. The most effective RFBs allow the customer to award the lease to more than one organization based on the response by category of product(s). The scope should also define if the products to be leased are all Tier 1 manufacturers or might include other Tier suppliers.
6. Objectives of the RFB. These are the keys to getting a measurable result. Language in this section of the RFB asks prospective lessors to provide lease rate factors (LRF) for specific equipment/equipment types and terms as outlined in a table that is part of the RFB.
All lease rate factors should be expressed as annual, semi-annual, quarterly, or monthly payments (in advance) with payments beginning the first of the month after the acceptance of the equipment. Lease rates should be calculated as fair market value (FMV) leases with title remaining with the lessor or dollar buyout (DBO) with title passing to the customer (lessee) at the end of the term.
7. Any creative alternative financing arrangements that will benefit the lessee. Lessors should be asked if all rates are inclusive of fees, taxes, or any additional charges. If so, those charges should be defined. Lessors must provide LRFs that do not require interim rent. Interim rent is defined as rent due from the equipment's acceptance date until the first of the following month. For example, if equipment is accepted on the 15th of the month, the customer (lessee) will not be charged any rent from the 15th until the end of the month.
Leasing is a cycle-based business. A lessor with a long history will, generally speaking, have taken care of their customers.
Should customers need to finance software or services, lessors should be asked to provide an LRF to accommodate that need for specific periods of time (for example, two, three, or four years).
All lease rates quoted should be fixed for the award period. Most RFBs will request that the lease rates be valid for 90 days from the date of award. Generally, lessors cannot hold a lease rate factor beyond that period due to interest rate fluctuations. All responses must state the rate on which the lease rates are based and can only fluctuate in accordance with any rate changes as announced by the U.S. Federal Reserve Bank.
The chosen lessor(s) will be required to use the lessee’s approved and chosen vendors and suppliers. The chosen lessor(s) will be expected to issue purchase orders on a timely basis (2-3 business days) to the customer’s approved and preferred vendors and suppliers for the requested equipment to be procured under the awarded lease terms on behalf of the lessee.
Choosing a Partner
When choosing a leasing partner, the organization should use certain criteria, including:
1. Years in business. Leasing is a cycle-based business. A lessor with a long history will, generally speaking, have taken care of their customers.
2. Industry-based experience. In this case, at least 5 years of serving educational customers.
3. Customer references where the educational institution has gone through at least two full lease cycles with the lessor, since the end of lease is the trickiest part of the leasing process.
Be sure to ask the prospective lessor for their core business values. It sets the stage for a compatible business relationship.