Frequently at tradeshows, customer visits and online inquiries Managed Service Providers, UC and Cloud Communications Providers and other technology solution providers ask us about whether the customer signs our document and gets and invoice from us. The answer is “yes” but with private label and signature label financing arrangements, we can give the financing piece the look and feel of your branding.
Before we dive in to the pros and cons of private label (or white label) and signature label (or co-branded) financing, and what is best for your Managed Service Provider (MSP), we need to all get on the same page. Private label is when one company offers the products or services of another company under their own brand. In private label, the customer generally doesn’t know about the secondary company at all. Private label is also known as white label and can be used interchangeably.
Our signature program is when the customer is aware of both companies and the products or services are generally co-branded with companies logos. For this reason, signature label is also referred to as co-branded.
When you use financing to offer a Hardware as a Service (HaaS) solution, private label and signature financing appear on the agreements, billing and invoicing. It’s important to pick and determine the best option for your MSP.
Overview of Private Label and Signature Label Financing
Is private label a good fit for you? A lot of MSPs think that having a financing source acting as a silent partner is what they want. However, many times signature financing is the better fit. Either way, both Private Label and Signature Label financing programs must be approved based on how you’ll be going to market.
Many times, signature financing can accomplish everything you are seeking with private label, but MSPs like to include their logo for several reasons.
Why MSPs like to have their logo on documents and invoices.
- The Managed Service Provider has gained the customer’s trust and is concerned adding another company into the picture and giving up control.
- There are fewer questions and more trust when the customer sees the MSPs name on the documents and invoices.
- The agreements and invoices fit in with the other documents the MSP is presenting.
- The MSP has a good reputation and wants to get as much mileage as possible out of their good name.
These are all good reasons to keep the MSP branding and logos on all the documentation, and the great news is all these things are accomplished in both private label and signature financing.
The Differences between Private Label and Signature Label Financing
Private Label Financing
- The customer never knows about GreatAmerica.
- Everything appears to flow through you.
- GreatAmerica acts as the financing arm of the MSP. This means when we call for verification, we portray ourselves as employees of your company.
- All billing is prepared by GreatAmerica and is done in the MSP’s name. The lessee makes their checks payable to you, but they mail them to the GreatAmerica PO box.
Signature Label Financing
- The customer is aware of both the Managed Service Provider and GreatAmerica.
- Co-branded documents and invoices mean the customer sees the MSPs name as well as GreatAmerica.
- We act as GreatAmerica and a vendor to the MSP. When we call for verification we say we are GreatAmerica.
- The invoices are co-branded with the payment going to GreatAmerica.
The Pros and Cons of Private Label Financing
Pros of Private Label Documentation
- GreatAmerica acts as the financing branch of your company and your clients never know the difference.
- Your customer feels like they are only dealing with one company.
Cons of Private Label Documentation
- If you are invoicing the customer for anything else they will get two different invoices which can cause confusion.
- The customer could easily send the payments to the wrong place, causing delays and/or late fees. This can also be a drain on your accounting team resources if they are trying to figure out how to apply funds intended for GreatAmerica.
- Customers tend to be confused when we call on your behalf, and they already know everybody in your company, and we aren’t one of them. Before we start and agreement, we complete a verification call to ensure they don’t have questions about the agreement or invoice. Sometimes we call to verify the installation, and they don’t understand why we are verifying something you just completed hours ago.
- If the agreement has a prefund section where we pay the MSP a portion of the cost upfront, it can look questionable to the customer that the MSP would pay itself for an agreement upfront. This can make the sale more difficult.
The Pros and Cons of Signature Label Financing
Pros of Signature Label Documentation
- There is more transparency in signature financing. The customer knows about both companies.
- You can defer questions to your financing company. Many MSPs using signature will pull us into calls to be the expert on financing questions.
- Signature is a good first step. When getting started with financing, it’s easier to walk before you sprint.
- It is easier for your accounting team to allocate the money.
- It makes sense to the end user. They can understand the need for money at the beginning to pay for the equipment and why you’re bringing in an expert financing source.
Cons of Signature Label Documentation
- If you are going to market as a small, local company and then position a financing option, it could cause some confusion about how you have the resources to provide financing.
- By introducing a third party finance company, you are opening the door for them to interact with your clients. If you aren’t careful about selecting a provider that represents you and your brand in a positive light, they could hurt your reputation as well.
Final Results of Private Label vs Signature Label Financing
Private label financing makes sense for experienced tech companies with multiple financing needs, while signature makes more sense for smaller shops just getting started with financing. If a customer knows everyone at your company and then one of our documentation specialists calls them about billing under private label and says to be a part of your MSP, things might look suspicious.
Whether you go with private label, signature, or even our third option to only use GreatAmerica Financial Services on documents and invoices, we are always happy to have a discussion about what best fits your company’s needs and processes. Contact us to find out what offer your business will qualify for and we’ll help you decide which direction to go.
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