How to Make Money in the Car Rental Business

How long has it been since you’ve taken a good look at your business? Is it everything you want it to be? Do you have clear goals? Are you working toward those goals, or have you lost your focus in the day-to-day grind?

Ask yourself questions like these, and stay involved in every aspect of your business. Be obsessed with the numbers. Stay focused on what you want your business to be, yet be flexible. Know how well your employees are performing. How well you do these things is directly proportionate to how much money you’ll make. That was the message from Neil Abrams, president of Abrams Consulting Group Inc. in Purchase, N.Y., during his seminar at the 2002 Car Rental Show, “Can Anyone Make Real Money in the Car Rental Business? Yes, You Can, Here’s How…”

“There are great challenges and great opportunities in this industry,” said Abrams. “I’m here to tell you that you can make money in this business even in this economy.”

Abrams offered several moneymaking ideas to a packed room at the Las Vegas Convention Center in October, including:

1. Challenge your business model. Take the time to look at your vehicles, customers, market, rates, technology, the people operating your business, and think about all the possibilities.

“You must evolve with the changing landscape of the marketplace,” said Abrams.

Ask yourself some questions: Does my business model work today? Has it become stagnant? Has my market position eroded? Do I want to build the asset value of the company, then get out? Have a plan and constantly challenge it.

“I know you all work hard and you think you challenge your business. But are you challenging it enough?” asked Abrams.

2. Be obsessed with numbers. “Those companies that are obsessed with numbers have the best shot at success,” said Abrams. Take the time to look at every possible benchmark, including, but certainly not limited to, revenue per user, utilization, average length of rental, reservation build and earnings. Scrutinize your P & Ls. Know what you did this time last month, this time last year, this time three years ago.

3. Know your fleet and your customers. Don’t let the deals drive your decision. Instead, let your customers dictate your fleet. Will your customers be happy with a used car that’s in good shape and has 30,000 to 40,000 miles? Try it out.

What will customers pay? Test a rate class and see. “I’ve got a client that rents PT Cruisers for $70, $80 and $90 a day. The customer perception is that this is an expensive car, a fun car,” said Abrams.

Keep your fleet costs in check or the business will fail. It’s your greatest opportunity to make money and your greatest risk.

Also, have a 12-month fleet plan that is constantly moving out 12 months. Change it to meet the demands of the constantly evolving rental market, travel industry, economic climate and the aftermarket.

4. When acquiring a vehicle, know when, where and how you’re going to dispose of it. If the aftermarket wants bells and whistles and a pretty color, get them. Whatever it is, have a disposal plan.

5. Manage risk. Dedicated people in the risk area will pay for themselves many, many times over. How much time do you spend on subrogation? Do you let your insurance company worry about it? Do you follow up on it? “In theory, good money can be made buying and selling vehicles,” said Abrams. “Then, it can leak out through not pursuing claims.”

6. Don’t neglect sales and marketing. Without sales and marketing, you’re just another rental company. Define what makes your business unique. That’s what you’re merchandising, and you’ve got to make your customers aware of that distinction. Your business’ unique characteristics provide opportunities to draw the customer to you and pay more.

7. Look for marketing alliances. If you’ve got a large hotel next door, propose a deal. Refer customers to the hotel, and have them refer business to you. Put a brochure together that talks about your alliance with the hotel, or put a phone in the hotel that dials your location. Be the rental car agency for the local convention center.

8. Optimize your profitability. How much will your business be worth when you’re ready to cash out? At the end of the day, you’re selling the value of the brand. There is intrinsic value in an established brand with real customers and real revenue. There’s always someone who will see value in your business that you don’t see.

9. Fight for the lowest fleet finance interest rate. Every 1% you save has an enormous impact on your bottom line. Use your sources, friends and colleagues to find it. Meet as many lenders as possible. Once you get that 1%, start looking for the next one.

10. Manage revenue and adjust real-time prices based on your utilization. Companies that do this with passion can squeeze up to an extra 15% to the top line. Look at your availability and your competition’s availability. “I had one client who called his competition and found out they were out of cars for the weekend. He increased his prices by 25%,” said Abrams.

11. Identify your great employees and pay them well. They will pay for themselves many times over. The value of an exceptional employee is so critical to making money in this business. According to Abrams Travel Data Services, the average pay for rental agents is $8 to $9 per hour. Remember, these individuals are renting $20,000 -plus vehicles to strangers.

12. Provide full disclosure to your customers. The customer should acknowledge anything special or unique about your rental agreement. Penalties must be clear to the customer. At the end of the day, it’s your word against the customer’s.

Above all, Abrams said, continue to challenge yourself and challenge your business model. Business is fluid — your operations must be as well.

Comments

  1. Muhammad Tahir Gaba [ April 25, 2013 @ 02:16PM ]

    Axelant pl, keep me informed for more info

  2. deecee [ May 12, 2013 @ 06:58PM ]

    there is a car rental biz in Brooklyn and NYC Urentauto.com they have such cheap prices and brand new cars cheaper than the big competition how can a new guy on the block afford to rent cars so cheap?

  3. Temeno [ July 16, 2013 @ 01:03AM ]

    I came across this website travelauto.com, and found to be interesting review portal, which was listing all ranges of companies and allowing me to get in touch with the car rental service provider. Good thing is I was able to get better deal and good service. Probably I think it's when you deal directly with the company you will get better prices.

  4. Daniel Ndofor [ July 18, 2013 @ 09:12PM ]

    The comments are helpful.

  5. Vinny [ July 29, 2013 @ 10:45PM ]

    Do you have to legally have a location to own a rental car business?
    Can I use 'Pay as you go' insurance as my main rental car insurance?

  6. Ricky W [ August 11, 2013 @ 12:08AM ]

    Seeking investors for start-up rental car business in Palm Springs,CA. Really need vehicles and working capital. Business formation is already establish with business license and LLC business structure. Contact info: ricowill007@gmail.com

  7. Joe. Mccluskey [ September 1, 2013 @ 04:31AM ]

    Trying. To. Start. Business. In. Ireland. Insurance. Is. Problem. Difficult. To. Get. So. I'll. keep. Trying. Joe. Ireland

  8. Alex [ October 15, 2013 @ 06:18AM ]

    Great article! I'm working in a rent a car company in Bulgaria. Is there any statistical information about car hire expectations and revenue in Europe?

  9. rehvivahetus [ November 22, 2013 @ 01:55AM ]

    Is there anything suspicious, when You find a car rental that is noticably more cheap than others. Does it mean, that I also have to loosen up little bit in qualitywise as well?

  10. majid [ November 22, 2013 @ 03:48PM ]

    GREAT ARTICLE, coming soon in Marrakech Morocco, carisma car, i willdo my best to succede.

  11. Deepak singh [ January 7, 2014 @ 08:57AM ]

    nice one absolutely amazing

  12. james kumutari [ January 10, 2014 @ 11:49AM ]

    great article, have learn't alot.

  13. Ricky W [ January 11, 2014 @ 02:18PM ]

    Seeking partner/investor to purchase Lamborghini and Ferrari. Company already establish in Palm Desert/ Palm Springs California. Need partner or investor that understands risks and high rewards. I have clients from UK, Canada and Hollywood celebrities. Contact info: ricowill007@gmail.com or info@celebritycarrental.com

  14. George James [ January 17, 2014 @ 09:01AM ]

    This was a great article. At Upscale Luxury Car Rentals Houston http://www.upscalecarrentals.com, we started to implement some of the things mentioned above.

  15. A MAJEED [ January 25, 2014 @ 11:30AM ]

    i got chance to work in a rent a car. so pls let me know how to work and how to market

    thanks

  16. Prashant Kalhapure [ April 14, 2014 @ 11:43AM ]

    Really a nice guidance. Thanks

  17. Tarek Salem [ May 1, 2014 @ 09:03AM ]

    Thanks for these valuable information. What the best way to make monthly inventory in a rent car company with a huge fleet and many rental locations?

  18. Wilhelmina Pheto [ May 15, 2014 @ 12:07AM ]

    good article and guidance for new beginners like me, regards.

  19. sallu zahid bakshi [ June 7, 2014 @ 03:54AM ]

    great.......... ideas , an idea can change your life

  20. hawa mohammed [ July 23, 2014 @ 03:54AM ]

    good advice....would like more of this because have just started this business.

  21. Elijah Nanse Deilala [ August 3, 2014 @ 05:15PM ]

    It's a very interesting information...I also run a hire car business in Papua New Guinea,it's an island nation north of Australia. My currently is rapidly developing with such big project like LNG and the opportunity of hire cars is in demand. Thank you for those infor and it would great to have some of those cars in my country, it will sure make some good amount of money cause we don't have them here. Especially the GMC van.

  22. Elijah Nanse Deilala [ August 3, 2014 @ 05:16PM ]

    It's a very interesting information...I also run a hire car business in Papua New Guinea,it's an island nation north of Australia. My currently is rapidly developing with such big project like LNG and the opportunity of hire cars is in demand. Thank you for those infor and it would great to have some of those cars in my country, it will sure make some good amount of money cause we don't have them here. Especially the GMC van.

  23. Paul [ August 10, 2014 @ 01:05AM ]

    This article by far Is the best article I've ever read however! "Rule #11. Identify your great employees and pay them well" This will never happen EVER!!! And the ones who are making good money are so high up In the company you almost have to be next In line to owning the business. Do you think any of the top "so called" best of the best rental companies give a rats ass upon the people they hire and make them money? lol NOPE!!!!! Ever read former employee reviews on google? LMFAO!!!! There's a big reason why so many people don't last long working In the rental Industry, Personally I don't blame them. I've been working In the car rental Industry for 12 years and even tho I was making minimum wage, The owner always took care of me with perks I wouldn't ever receive from other rental employers. Unfortunately In January of 2014 the company closed down and I lost my job, I'm still unemployed and the top rental companies won't even give me the time or day. Why? Because they assume they will have to pay me more because of my years of experience In the field. Yet these companies make millions of dollars ever year, What a joke!

  24. Scott [ August 24, 2014 @ 02:10AM ]

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  25. scott [ September 1, 2014 @ 03:07PM ]

    Don't neglect inventory management and scheduling either!

  26. Ali [ November 4, 2014 @ 10:25AM ]

    Very much informative... Please keep me informed further about this business.

  27. Sasha Sarajevo [ November 10, 2014 @ 03:47AM ]

    Respect to all!!

    I saw this article and I hope that someone can help me. I am marketing manager and rental agent in my company in Sarajevo. We are really good company with great fleet and we are loking forward to expand our business. I would like to ask all af you, if you can show me the way to contact some brokers that I can become supplier from Bosnia and Herzegovina. Belive, or not, there is a big number of tourists worldwide who comes to Bosnia, and they need a car for trips etc. Is there a marketing agency that can put me in with that big brokers as cartrawler.com, arguscarhire.com, autoeurope.com etc. I used to send a millions of emails, but never get a respond.

  28. Sasha Sarajevo [ November 10, 2014 @ 03:50AM ]

    If someone can give me some details, I would appriciate if it send on gd_marketing@hotmail.com

    www.gdmarketing.ba

  29. shawn [ November 30, 2014 @ 12:15PM ]

    Hey guys, my name is shawn and I am from toronto, canad. I am really interested in starting a rental agency. I know id have to start off small but the things im stuck on is if I were to lease a car for 12 months what kind of insurance would I need. Would I have to cover the cars or offer clients insurance packages? I am confused at how the fleet insurance works! Please help!

  30. Eric Molope [ December 29, 2014 @ 05:18AM ]

    I am running a Car rental business, business is very slow I need companies who will support by hiring on my company I am using new cars 2013 and 2014 model. as an infant I have only group AB&C. I do have capital of increasing fleet if there is demand. 100 percent black owned business. I am operating in SA, KZN, Durban. 0313329145/ 0844713571.

  31. Adeel [ December 29, 2014 @ 08:37PM ]

    Hey Shawn from Toronto, Canada. Contact me at badeel84@hotmail.com

  32. ritesh thale [ January 12, 2015 @ 09:00PM ]

    please send me company name for the my car is rental basis.

    thanks

  33. mccart [ January 15, 2015 @ 05:59AM ]

    hello

  34. Corruption Free [ January 22, 2015 @ 12:16AM ]

    Let there be a law that the rental on buildings be remain static in a year with no growth in India, Let continuous no growth or zero growth freeze rentals. let the rental decrease by 10% every year in a year of negative growth and let 50% of rental revenue be used for upkeep of the building.

  35. Funke [ January 26, 2015 @ 05:17AM ]

    Please, give me a hint on how to start a car hire business with 5 cars. make in an immediate response, thanks

  36. Andrew [ February 9, 2015 @ 06:00AM ]

    I am a well seasoned expert in the luxury car rental industry in Dubai and specialize in the niche market with over 2o years of experience. I am hoping to start my own business and look for serious investors who are willing to invest. andrew_saman@yahoo.com

  37. rupesh rajput [ March 25, 2015 @ 07:26AM ]

    i put my car on company on rental

  38. JASMINE [ April 18, 2015 @ 08:40AM ]

    update more info

  39. Muhammad Bilal [ April 25, 2015 @ 01:57AM ]

    saw this article and I hope that someone can help me. I am marketing manager and rental agent in my company in Dubai. We are really good company with great fleet and we are loking forward to expand our business. I would like to ask all af you, if you can show me the way to contact some brokers that I can become supplier From Dubai

  40. D.suresh kumar. [ May 2, 2015 @ 03:12AM ]

    I am intrested to give a car for monthley lease

  41. D.suresh kumar. [ May 2, 2015 @ 03:13AM ]

    Lease a car

  42. Peter Matiop [ May 7, 2015 @ 06:27AM ]

    am South Sudanese, who start with one vehicle in 2011 but now having seven vehicles, there is a real best opportunities in this business in my Country and am looking for advisers and alliances companies who we can partner with. the article has give me real courage and how deal with challenges. Please contact me on qacarrentalss@yahoo.com or +211956098000

  43. Sagar jadhav [ June 14, 2015 @ 06:52AM ]

    I want to give my car on rent

  44. kaz [ June 22, 2015 @ 12:49PM ]

    Any one has any ideas what offer to customers beside the usual service.

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  47. Nikhil bhakare [ July 23, 2015 @ 01:44AM ]

    I want to give my private benz on rent

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  49. venkatesan [ August 11, 2015 @ 07:36AM ]

    Meenakshitour&travels

  50. Muhammad Ali Khatian [ August 17, 2015 @ 03:16AM ]

    i have gone through article and comments both seems interesting. We are Adrian Rent A Car LLC with a mid range cars on good price looking forward to have business with all of you

  51. Lady G [ August 21, 2015 @ 10:38PM ]

    i am researching to start a car rental business and happened to read this article...Pretty good information.Thank You.

  52. Dr. E [ August 24, 2015 @ 02:22PM ]

    Advice transcript for your money matters

  53. pradeep [ August 25, 2015 @ 05:43AM ]

    hi

    i am pradeep from Bangalore India ,i am running a car rental business and it is very good, only problem that payment delay due to this i have borrowed money from private lenders and they are very bad people.some one can invest on my business kindly help me and call me on 918792512999 r mail me acerentacar3@gmail.com

  54. Roy [ September 12, 2015 @ 01:25AM ]

    Can you give some information about maintaining current account for the business. I mean tax issues. How do I handle it?

  55. steve gubler [ September 20, 2015 @ 08:16PM ]

    I always wondered when a customer does a one-way only, how does the franchisee get the car back to his location ?

  56. steve gubler [ September 20, 2015 @ 08:16PM ]

    I always wondered when a customer does a one-way only, how does the franchisee get the car back to his location ?

  57. Henry [ October 14, 2015 @ 10:01AM ]

    a lot of the time the location recieving the car will just asorb the car into its fleet, then one way it to a franchise location because it costs the corporate location more money to use a franchise car. Sometimes, but not a lot, the franchise will send someone out to pic the car up. I've only experienced it with very small Canadian locations that one way to border states in the United States.

  58. Accurate [ January 22, 2016 @ 03:37AM ]

    Hi, i have a car hire service in Ghana with very nice vehicles. currently looking for partnership across the globe. Contact me on accurateintel@gmail.com

  59. Bravo Rent A Car [ March 18, 2016 @ 12:58PM ]

    @steve gubler the customer will be told in the rental agreement to left the key to at a authorized hotel,private parking lot or just at another allied car rental. usualy one-way is more expensive

  60. D,J,Deegalla [ June 8, 2016 @ 04:35AM ]

    This very great thing and good opportunities for public

  61. Ian Chang [ January 5, 2017 @ 02:50PM ]

    started out with 5 cars and now have a fleet of 22 and growing..we cater to mainly tourist in Providenciales Turks and Caicos and find that a used vehicle in good condition,from Japan fits in the market..still open for ideas..really like this article

  62. Shantal [ February 20, 2017 @ 01:14AM ]

    Hello, i just started a car rental service in Africa-Cameroon. something i have always be passionate about, i find this article so interesting and helpful as there is more to the industry than i thought, this business is not in Africa and i need partnership getting a fleet of cars.

  63. Max [ March 19, 2017 @ 09:53PM ]

    Great info.
    I am starting a rental car business in Las Vegas, and looking for an experiwnce manager. Contact me at my email
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  64. Sean Michaels [ April 24, 2017 @ 09:51PM ]

    Hello, I'm concerned about the insurance. What type of coverage is needed on the vehicles and which insurance companies are best to use in the US? Houston@sipsofart.com

  65. Kenne [ May 7, 2017 @ 11:27PM ]

    Great article. I have identified my issues going through this article. I have started my rental company in Cameroon with 15 vehicules but didn't went well. I have reduced the fleet to 5 to be more focus. I am looking for possible partners with experience in the business as the market is still very open and non-existing over there.

  66. Steve [ May 24, 2017 @ 04:56PM ]

    Where do I get Business Insurance for my Rental/Lease program

  67. david vinson [ June 14, 2017 @ 04:09PM ]


    What type of coverage is needed on the vehicles and which insurance companies are best to use in the use ?

  68. Ek [ June 14, 2017 @ 08:04PM ]

    Hello kenne do you want to link and talk about partnership in Cameroon .

  69. Ek [ June 14, 2017 @ 08:05PM ]

    Here is my contact . emmanuel@ekprivatechauffeur.com

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    Hello, I am Sandra Alice currently living in USA california, I am a widow at the moment with two kids and i was stuck in a financial situation in June 2015 and i needed to refinance and pay my bills. I tried seeking loans from various loan firms both private and corporate but never with success, and most banks declined my credit. But as God would have it, I was introduced to a Woman of God a private loan lender who gave me a loan of $105,000USD and today am a business owner and my kids are doing well at the moment, if you must contact any firm with reference to securing a loan without collateral , no credit check, no co signer with just 2% interest rate and better repayment plans and schedule, please contact Shelter She doesn’t know that am doing this but am so happy now and i decided to let people know more about her and also i want God to bless her more. You can contact her through his email: (shelterfinances@aol.com)

  84. Andy [ March 31, 2018 @ 12:34PM ]

    Hi Everyone, I'm the owner of the car rental business in Miami Florida (the business location is near the MIA.) I just recently got an opportunity to get into something much bigger and would like to SELL MY CAR RENTAL BUSINESS. If anyone interested please contact me on 347 301 7294. Thanks.

  85. Mr, wellington [ April 2, 2018 @ 06:47AM ]

    Do you need an urgent loan to solve your financial needs? We offer loans ranging from 5,000.00 to 950,000,000.00. Max, we are reliable, powerful, fast and dynamic, with no credit check and offers a 100%guarantee foreign loans during the period of this. We also issued a loan in Euros, Thai Baht, Sterling and Dollar exchange rate is 3% of all loans if you are interested get back to us through. wellingtonbanks11@gmail.com With the following information: Your Name: Country: City:Address: Amount Needed: Duration: Age: Sex: Occupation: Phone No:

  86. Leon Tourish [ April 5, 2018 @ 12:55AM ]


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  87. ali [ April 11, 2018 @ 12:35AM ]

    Hi
    I am looking for an insurance company who can offer insurance for our car rental clients in Toronto, Canada
    any suggestion please email
    mycanada110@gmail.com
    Thanks

  88. Steven Scott [ April 11, 2018 @ 09:24AM ]

    Here comes an Affordable and Legit Loan that will change your life for ever, I am Dr. a certified loan lender, I offer loan to individual and public sector that are in need of financial Assistance in a low interest rate of 2%. Bad credit acceptable,The Terms and Conditions are very simple and considerate.You will never regret anything in this loan transaction because i will make you smile. Email: (stevenscott443@gmail.com) have you been looking for a quick and legit loan online why don't you try Dr. Steven Scott loan company and be free from debts note getting a loan from this company is 100% assured and guaranteed. It will be a great joy to us when you are financially stable Email us via stevenscott443@gmail.com

  89. Teri McCary [ April 11, 2018 @ 05:19PM ]

    Hey,

    I saw a comment and i applied for a loan to my greatest surprise i received my Loan. So fast and easy. If you are in need of a loan you can contact them via email and please let them know you were refereed to them by Teri McCary

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  90. SuiteCapitals@gmail.com [ April 13, 2018 @ 04:13PM ]

    We Offers Financial Consulting To Client, Companies Seeking Debt / Loan Financing And Seeking For Working Capital To Start A New Business Or To Expand Existing Business. Interested Parties Should Contact Us For More Information Through Via E-mail: SuiteCapitals@gmail.com ( SuiteCapitals@post.com )

    We Have Loan Programs Tailored For Any Profile And You've Come To The Right Place To Satisfy Your Business Needs. If Your Company Or You Know Of Any Company With Viable Projects / Proposals That Needs Financing, Kindly Write Us With The Loan Requirement. Please, Contact Us For More Information: SuiteCapitals@gmail.com ( SuiteCapitals@post.com )

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  91. SuiteCapitals@gmail.com [ April 13, 2018 @ 04:14PM ]

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    We Have Loan Programs Tailored For Any Profile And You've Come To The Right Place To Satisfy Your Business Needs. If Your Company Or You Know Of Any Company With Viable Projects / Proposals That Needs Financing, Kindly Write Us With The Loan Requirement. Please, Contact Us For More Information: SuiteCapitals@gmail.com ( SuiteCapitals@post.com )

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  92. Chris [ April 18, 2018 @ 08:23AM ]

    Is anybody familiar with the new app Turo which allows you to rent out your own personal vehicles. It also covers insurance and give you the ability to set your price for daily rental. I currently have two vehicles set up but looking to add 3 more. Despite just starting this week

    If anybody has had some success using the app. Please contact me hccproject1@gmail

  93. Tosin Ajayi [ April 19, 2018 @ 04:05AM ]

    Great write up.
    Starting and managing a fleet business on low capital is my story.
    I like the part that talks about paying your exceptional staff well. They sure know how to keep the business moving.

  94. EllinasFinances@gmail.com [ April 19, 2018 @ 11:42PM ]

    Do You Seek Funds To Pay Off Credits and Debts? { EllinasFinances@gmail.com } Is Here To Put A Stop To Your Financial Problems. We Offer All Kinds Of Loan (Personal Loan, Commercial Loan, etc.) We Give Out Loan With An Interest Rate Of 1.00%. Interested Applicants Should Contact Us Via Email: ((EllinasFinances@gmail.com))

  95. jrs [ April 21, 2018 @ 10:27PM ]

    I have done turo. I have good rating. I let my cars go cost of finance was way too hight looking to get cheapers cars. I did very well with turo perfect loop whole for liability. I want to get a few cars and move up.my current buisness has my chapita tied up. I dont want to wait too long. I need chapital to move with the rentals. I live in las vegas rentals is very good here..

  96. SuiteCapitals@gmail.com [ April 23, 2018 @ 05:12PM ]

    We Offers Financial Consulting To Client, Companies Seeking Debt / Loan Financing And Seeking For Working Capital To Start A New Business Or To Expand Existing Business. Interested Parties Should Contact Us For More Information Through Via E-mail: SuiteCapitals@gmail.com ( SuiteCapitals@post.com )

  97. SuiteCapitals@gmail.com [ April 23, 2018 @ 05:12PM ]

    We Offers Financial Consulting To Client, Companies Seeking Debt / Loan Financing And Seeking For Working Capital To Start A New Business Or To Expand Existing Business. Interested Parties Should Contact Us For More Information Through Via E-mail: SuiteCapitals@gmail.com ( SuiteCapitals@post.com )

  98. SuiteCapitals@gmail.com [ April 23, 2018 @ 05:14PM ]

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  99. SuiteCapitals@gmail.com [ April 23, 2018 @ 05:14PM ]

    We Offers Financial Consulting To Client, Companies Seeking Debt / Loan Financing And Seeking For Working Capital To Start A New Business Or To Expand Existing Business. Interested Parties Should Contact Us For More Information Through Via E-mail: SuiteCapitals@gmail.com ( SuiteCapitals@post.com )

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