This article is intended for Admin and Business Operations teams only.
The guidance below includes actions that should not be performed or communicated by the Sales team, including bank outreach and blended-rate discussions. Admin ownership is required to ensure bank compliance, audit readiness, and accurate booking.
When building any deal, one important item to pay attention to is the MSRP box located at the top of the quoting screen. This box appears in the same row as key financial metrics such as Revenue, Markup %, and Commission. Understanding this box is essential because it tells you two critical pieces of information:
1. The Total MSRP for the Equipment in the Deal
This value represents the manufacturer’s suggested retail price for all hardware included in the quote. You can see this in the pricing view on the equipment tab and it will include both the mainframes and accessories.
2. Your Current Revenue Position Relative to MSRP
The second value shows how much of that MSRP you are currently using within the deal.
Example
If the MSRP box shows:
$14,460 of $30,799
This means:
The equipment currently built into the deal totals $14,460 pricing (Revenue + Expenses).
The total MSRP allowed for that equipment is $30,799.
You are using about 47% of the available MSRP revenue.
This indicates you still have room to increase the equipment price before reaching MSRP.
How Banks View Overbooking
Banks allow us to sell above MSRP, but only up to specific thresholds depending on lease type. Exceeding these limits is what creates an overbooked deal.
PEAC/XFS Overbooking Rules
Lease Type | Maximum Allowed Over MSRP | Threshold Before Deal Becomes Overbooked |
FMV Lease | Up to 125% of MSRP | Above 125% = Overbooked |
$1 Out Lease | Up to 200% of MSRP | Above 200% = Overbooked |
Being “overbooked” simply means:
You’ve priced the deal higher than the bank is willing to fund based on MSRP, and the bank will not book the deal until pricing is modified.
3rd Party Bank-Specific Funding Guidelines
In addition to PEAC/XFS, other lenders may have different funding limits.
These should always be validated when structuring deals outside of PEAC.
Wells Fargo
≤ $100K: Up to 125% MSRP
> $100K: Typically 100% MSRP
Some flexibility may exist depending on the business case
Special Case:
If there is an upgrade or buyout, max funding =
MSRP + quote amount
DLL
Up to 133% MSRP for deals ≤ $100K
100% MSRP for deals > $100K
Assumes no soft costs included
FCB (formerly CIT)
Uses blended rates
Deals under $500K and above 125% MSRP may be considered
Approval is case-by-case
US Bank (USB)
FMV: Up to 125% MSRP
$1 Buyout: Up to 140% MSRP (new equipment)
Used / Refinance Deals:
Approximately 50% of MSRP
What Happens if Sales Goes Over the Threshold?
If you exceed the threshold set by the leasing company you are credit approved, the deal will not book without adjustments. In these cases, you’ll need to modify the pricing structure.
All communication regarding overbooking should be communicated to sales using the PREOChat and tagging the sales rep in the communication.
Below are the most common and effective ways to correct an overbooked deal.
Ways to Correct an Overbooked Deal
1. Update the Lease Type from FMV to $1 Out
Changing the lease type from FMV to $1 Out increases the allowable MSRP threshold.
FMV leases allow up to 125% of MSRP
$1 Out leases allow up to 200% of MSRP
By switching to a $1 Out structure, you may immediately bring the deal back into compliance without changing pricing or margins. This option works best when:
The customer is comfortable owning the equipment at the end of the term
The deal is slightly over the FMV threshold but well below the $1 Out limit
You want a clean fix without reworking pricing components
Always confirm lease structure alignment with the customer before making this change.
**It's important to note that the Disclosure Form is required on $1 out leases where the corporate business address is in CA, FL, GA, KS, NY, UT. If you are selling into these states, please engage your Business Ops Admin.
2. Reallocate Payments from Hardware to Services (No Customer Impact)
Another effective option is to shift a portion of the payment from hardware to services while keeping the total customer payment the same.
Reducing hardware revenue lowers the amount counted against MSRP
Increasing service revenue does not impact MSRP calculations
The customer’s overall cost remains unchanged
This approach is ideal when:
The deal includes both hardware and service components
Hardware is driving the overbooking
You want to preserve customer pricing while correcting the bank issue
Be sure the reallocation aligns with the actual solution being delivered.
3. Lower the Selling Cost to Fit Within the MSRP Allowance
This is the fastest and most straightforward method.
If the selling price exceeds the allowed MSRP threshold, you can reduce the selling cost until it falls within the bank’s limits. This is often the cleanest solution when:
The deal structure is simple
Margins allow for slight adjustments
Time is critical and changes need to be minimal
Lowering selling cost keeps the deal structure intact without adding components or moving assets.
4. Add Low‑Cost, High‑MSRP Accessories
Some accessories:
Cost very little
Carry a disproportionately high MSRP
Adding these items can increase the total MSRP allowance enough to eliminate the overbooking. This option works well when:
Hardware margins are tight
You cannot adjust sales price
Moving devices or restructuring isn’t ideal
5. Move Printers or Devices to Leased Assets
If the deal includes:
HAAS devices
Printers or equipment currently counted as service
…it may be beneficial to move those items into leased assets. This increases the total hardware MSRP and raises the allowable pricing ceiling, which can bring the deal back into compliance without reducing revenue.
6. Admin-Only Option: Engage the Bank for a Blended Rate
In select scenarios, Admin may engage the bank directly to request a blended rate across assets.
This approach:
Allows the bank to average MSRP exposure across multiple components
Can resolve overbooking without repricing or restructuring
Requires bank approval and documented justification
Notification of the new blended rate should be communicated to sales via the PREOChat. Please note, sales should never be provided the raw rates. Please update the rate from the bank in PREO and allow the system to do the uplift.
Critical Notes:
This option is strictly limited to Admin and Business Ops teams
Sales should never position, promise, or discuss blended rates with customers (Keep in mind: Disclosure Requirement Reminder: $1 Out leases require a Disclosure Form when the corporate business address is in CA, FL, GA, KS, NY, or UT. Admin engagement is mandatory for these states)
All communication with the bank must be documented and approved internally
Use this option when traditional remediation paths are not viable and the deal remains strategically important.