Zephyr’s Expansion Soars With Total Fleet Management

The Leaseback Program

Leasebacks are attractive to companies for a variety of reasons. Companies can:

→ Consolidate their fleet under one funding source, which works well when a fleet works with multiple lenders or has its fleet split between several fleet management companies.
→ Add vehicles when they have credit access concerns.
→ Inject cash into the business by tapping into equity in fleet vehicles.

In this case, leaseback allowed Zephyr to use its “existing fleet as collateral which was optimal from a company-wide, cash-flow perspective,” says Nick Bayer, Vice President of Operations. Bayer, who has led the operations since he joined Zephyr in 2023, adds that a lack of available capital made it arder for Zephyr, a newer company, to purchase vehicles as it grew. The optimal option for the company was a “no debt leaseback,” he adds.

With this option, Enterprise Fleet Management holds vehicle titles for asset-back lending. Since Enterprise holds vehicle titles, Zephyr could establish a new line of credit. “Enterprise has the collateral of the existing fleet, so the company has the cash flow to acquire more companies to grow the business,” he says.

Being an early stage start-up with an aggressive acquisition strategy made it challenging to add five to 10 vehicles every time a deal closed. “Our initial reasoning to leaseback was to reduce the impact to cash flow,” he says.

Zephyr achieved these objectives by utilizing leaseback to cash in on equity and use the money to fuel growth, pay off debt, acquire more businesses, and cover working capital needs.

This enabled the fleet to secure the vehicles it needed while keeping monthly payments low. “We were able to delay the spend on vehicles, but we still have the ability at the end of the lease to purchase it or cycle it out,” he says. “There’s a real benefit to having Enterprise manage and own this without us having that responsibility.”

Zephyr strives to transform the home services industry by uniting HVAC, electrical, and plumbing businesses under a common operating platform.

It does so by adding small- to medium-sized companies across the U.S. to the fold.
The company has maintained a rapid acquisition schedule since incorporating in October 2022, acquiring companies in multiple states since then. And, it is poised to add three more companies in the near future.

As Zephyr continues to acquire new companies across many states, fleet management becomes more burdensome. Bayer must ensure vehicles are available and ready for use in order to maintain a high level of customer service. Technicians rely on these vehicles to reach their service destinations, he explains.

Without a partner in fleet management and leaseback, Bayer says he could not have kept pace with this rapid expansion. This is where Enterprise Fleet Management and its Leaseback program come in.

“After the first acquisition, we realized we needed to add more technician capacity and more vehicles,” he says. “We needed an enterprise-level solution.”

Bayer chose Enterprise Fleet Management because of positive past experiences with their products. He says the company’s ability to respond quickly and provide exceptional customer service has always left a lasting impression.

According to Bayer, handing over fleet management to Enterprise Fleet Management has made his job a lot easier. “We can log into a dashboard and gain a holistic picture of our costs and our billing,” he says.
 

Greater Fleet Efficiency

Bayer states partnering with Enterprise Fleet Management has allowed Zephyr to standardize and increase fleet efficiency.

Through the Leaseback program, Zephyr gained access to Enterprise Fleet Management’s offerings, which Bayer tailored to Zephyr’s specific requirements. This lifted his administrative burdens as he no longer must learn about each state’s license and titling requirements or worry about registering vehicles at the Department of Motor Vehicles.

Bayer explains understanding state regulations was incredibly challenging in the acquisition process and noted sellers sometimes complicated the situation.

“Enterprise Fleet Management helps us identify if a fleet needs to be inspected before we do a title transfer and gets that done ahead of time instead of waiting until the sale has closed,” he says.

As a bonus, when there was a shortage of cargo vans, Enterprise Fleet Management also helped the company acquire new vehicles.

“Enterprise Fleet Management leveraged its local dealership network to get the vehicles we needed,” he says. “This gave us the ability to scale quickly. We share our needs with Enterprise, and they source a vehicle for us from across the nation.” 

He adds the process of vehicle disposal is also faster. Zephyr’s companies can rely on Enterprise Fleet Management to help them dispose of trucks that are not operational or sitting idle. 

“It lets us hit the easy button to acquire or sell vehicles,” he says. “Everything is plug-in-play. When a vehicle shows up, it’s already insured, and we have access to telematics immediately.”