Graybar Lights the Way for Troubled Youth

GFS Case Study - Community Education Partners (CEP) image

Community Education Partners (CEP) provides students with a second chance. For more than 10 years, the organization has been a leading provider of alternative education programs to get at-risk students back on track toward high school graduation. Small classrooms, one-on-one teaching, and a sense of community minimizes classroom disruption and encourages learning.

In 2009, CEP acquired three properties to transform into Dropout Prevention and Recovery Program schools in Orange County, in addition to their facilities already in Panama City, Florida and Houston, Texas. The organization worked with local contractor, Bright Future Electric, to renovate the buildings in preparation for incoming students.

Bright Future compiled the plans and consulted with Graybar Sales Representative Matt West to provide energy-efficient lighting in all three locations. Graybar is a leading distributor of high-quality electrical, communications and networking products, and specializes in related supply chain management and logistics services.

When CEP needed extra assistance in completing the lighting renovation of their new schools, Matt suggested Graybar Financial Services® (GFS), the financing subsidiary of Graybar. "I try to bring up GFS on a weekly basis," Matt said. "My customers probably get a little tired of me mentioning GFS, but talking about GFS allows me to find out more about the project and puts me in a better position with my customer."

Matt and GFS Sales Manager Brian Siebert met with Bright Future to discuss possible financing options for CEP. Despite the fact that CEP had construction financing in place, they elected to utilize a creative leasing option through GFS for their new lighting equipment. This structure provided them with the ability to treat the monthly lease payment as an operating expense.

The lease benefited CEP by:

  1. Providing tax savings. For most companies, operating lease payments are 100% tax deductible.
  2. Not requiring the expense to be reflected on their balance sheet as a Capital Expenditure or traditional lease structure.
  3. Allowing the CEP to conserve working capital and keep bank lines of credit intact — critical in this environment.

"GFS assisted us by providing a financing opportunity that was cost effective yet provided us with the operating lease treatment we were looking for," CEP CFO Patrick Min said. "GFS made the credit process very customer friendly and expeditious."

 

Note: GFS does not provide tax advice. Consult a tax advisor for details regarding full tax savings and advantages. The determination of whether a lease qualifies as an Operating Lease is at the customer’s discretion. For more details, please call GFS at 800-241-7408, visit graybar.com/gfs or e-mail [email protected].

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