What is Diverse Spend and How Can You Incorporate it into Your Equipment Leasing Plan?
What is Diverse Spend?
Diverse spend refers to the amount of money companies spend with Minority-Owned Business Enterprises (MBE).
To help promote diversity and inclusion, many businesses maintain yearly supplier diversity programs by identifying and doing business with a range of diverse companies. In electric utility, telecommunications, tree care, lights and signs, and contractor markets, this is often achieved by leasing equipment.
Also, federal contractors such as utility and governmental agencies often require contractors to spend a certain amount of money with minority-owned companies to be eligible to earn contracts with said utility or agency.
What’s the Advantage of Leasing Relative to Diverse Spend?
Leasing is an easy, efficient way of spending money with an MBE. Leasing provides an opportunity to assess and build relationships with new suppliers, vendors, distributors and other third parties that address a company’s needs. Leasing also creates a dependable stream of diverse spend transactions that is easy to calculate.
Beyond meeting diverse spend goals or obtaining contracts, leasing with an MBE can ultimately benefit the economy and underutilized communities.
According to a 2020 article from the Harvard Business Review titled, “Why You Need a Supplier Diversity Program,” diverse spend “delivers broader societal benefits by generating economic opportunity for disadvantaged communities.”
In addition, the article also mentions a recent report from the National Minority Supplier Diversity Council. The report states, “certified MBEs generate $400 billion in economic output that lead to the creation or preservation of 2.2 million jobs and $49 billion in annual revenue for local, state, and federal tax authorities.”
What Other Ways do Companies Fulfill their Diverse Spend Needs?
There are many ways to spend money with MBE’s, including but not limited to: subcontractors, fuel supply services, parts, etc. Really, anything that makes up part of the supply chain could be sourced through an MBE.
How Can Altec Capital’s Equipment Leasing Help Me Reach My Supplier Diversity Targets?
Altec Capital Services partners with Cadence Leasing to provide a seamless approach to diversity leasing. Cadence Leasing Inc. is a certified Minority and Service-Disabled Veteran business enterprise serving over 30 Fortune 250 Firms for 19 years.
Manda Wiebe, Accounting Manager at MGE Underground, a utility contractor based in Paso Robles, CA, says Altec Capital Services and Cadence Leasing have made it easy for her company to meet their diverse spend goals. “From streamlining paperwork to an online system to answering my team’s many questions, ACS and Cadence Leasing made leasing our equipment a pain-free and even enjoyable experience.”
Wiebe continued, “Beyond just the finance side of things, I am impressed with the level of service Altec Capital provides. The relationships our company has forged with ACS makes me look forward to interacting and doing business with them.”
The Altec Capital/Cadence Alliance has been benefiting numerous clients for several years and is designed to meet the requirements of several areas in our customers’ businesses, including:
- Fleet operations
- Finance
- Strategic sourcing
- Diversity organizations
For more information on how Altec can help your company achieve its supplier diversity goals, call (888) 408-8148, email finance@altec.com, or contact your Altec Capital Account Manager for more details.