gearing up - verdict.co.uk€¦ · gearing up ll november 314.indd 1 14/11/2019 17:01:57. 2 |...

COUNTRY FOCUS NEWSFEATURE

Welcome developments in Spain after years of economic stagnation

HMRC to postpone implementation of reverse

VAT charge until 2020

The Leasing Foundation panel talks collaboration

and cultural barriers

LEASING FINANCE AND HOW IT FITS INTO THE PLANT AND MACHINERY SECTOR

Issue 314 / november 2019w w w. l e a s i n g l i f e . c o m

GEARING UP

LL November 314.indd 1 14/11/2019 17:01:57

2 | November 2019 | Leasing Life

contents

NEWS

05 / EDITOR’S LETTER06 / ROUND-UP• 1pm sees annual profits increase 4%

to £8.1m• Women in asset finance discuss

changing face of industry• BNP Paribas to launch UK dealer

stock funding product• IGF: Three-quarters of SMEs expect

growth over next year• HMRC to postpone implementation

of reverse VAT charge• JCB Group signs remarketing contract

with BCA• Santander to exit UK asset finance

market• MIC buys Think Business Finance• Bluestone Leasing launches prepaid

reward card• Close Brothers provides printer

funding• ABN Amro CF agrees £10m

receivables funding package• Hitachi Capital launches flexible SME

payments

13 / PEOPLE MOVES

this monthCOVER STORY

follow LL on twitter@leasinglife

Deputy Editor: Chris Lemmon

+44 (0)20 7936 [email protected]

Reporter: Athena Chrysanthou+44 (0)20 7936 6455

[email protected]

Group Publisher: Ana Gyorkos


Sub-editor: Nick Midgley


Sub-editor: Sophia Bell

Publishing Assistant: Asena Değirmenci


Head of Subscriptions: Alex Aubrey


Director of Events:Ray Giddings


Financial News Publishing, 2012. Registered in the UK No 6931627. ISSN 1351-3826Unauthorised photocopying is illegal. The contents of this publication, either in whole or part, may not be reproduced, stored in a data retrieval system or transmitted by any form or means, electronic, mechanical,

photocopying, recording or otherwise, without the prior permission of the publishers.

For more information on Verdict, visit our website at www.verdict.co.uk.As a subscriber you are automatically entitled to online access to Leasing Life.

For more information, please telephone +44 (0)20 7406 6536 or email [email protected].

London Office: John Carpenter House, John Carpenter Street, London, EC4Y 0AN

Asia Office: 1 Finlayson Green, #09-01, Singapore 049246 Tel: +65 6383 4688, Fax: +65 6383 5433 Email: [email protected]

Customer Services: +44 (0)20 3096 2603 or +44 (0)20 3096 2636, [email protected]

PLANT AND MACHINERY

14

10

LL November 314.indd 2 14/11/2019 17:02:07

www.leasinglife.com | 3

contents

november 2019

20 / SPAINA significant rise in lease activity over the last 12 months has come as a welcome development in Spain, which suffered from years of stagnation following the global financial crisis. Paul Golden reports

COUNTRY FOCUSFEATURES

18 / COLLABORATIONAthena Chrysanthou reports back from the last Leasing Foundation panel discussion in Central London, which focused on collaboration and how to overcome the cultural barriers that can cause friction

14 / PLANT AND MACHINERYPlant and machinery is any equipment essential to the running of a business, although it usually refers to larger equipment. Leasing Life speaks to industry experts about changing attitudes to the sector

20

18 20

LL November 314.indd 3 14/11/2019 17:02:16

Challenge the ProcessEmbrace the Vision

Contact us today [email protected]+44 (0)208 123 5508

www.vipappsconsulting.com

@vipappsconsult vip-apps-consulting-limited

VIP Apps Consulting help companies to optimise business processes for the next generation of leasing and financial services ecosystems.Our diverse multi-lingual asset finance and technology-focused team can unlock your technology vision, deploy the right solutions for your organisation and let you capitalise on the business opportunities that technology innovation brings.Our unique process-driven approach and DELIVER and AMOBI proprietary methodologies deliver greater value and efficient business outcomes, minimising cost and risk.

Leasing

LL November 314.indd 4 14/11/2019 17:02:17


editor’s letter

Get in touch with the deputy editor at: [email protected]

Chris Lemmon, Deputy Editor

At the time of writing, Prime Minister Boris Johnson has returned from Brussels with a revised Brexit withdrawal agreement from the EU.

Johnson sought to push the deal through before the 31 October deadline, before a historic Saturday Parliamentary sitting where MPs voted to delay any final implementation of Brexit until January 2020 at the earliest.

Whether or not Johnson will be able to gain enough support for his withdrawal agreement to be passed remains to be seen.

Industry has reacted negatively to the deal forged by Johnson, with Make UK, the lobby group for the engineering and manufacturing industries, stating that the new agreement fails to provide protection to its members in four key areas: a suitable transition period, regulatory alignment, frictionless trade and access to skilled labour.

Elsewhere, a letter sent to the government by industry representatives warned Johnson that dropping commitments to maintain regulatory alignment with the EU in relevant sectors posed “a serious risk to competitiveness”.

The letter read: “Pan-European regulatory alignment has been a success in our industries, supporting continued

creation and retention of highly skilled manufacturing jobs in the UK. It is important this regulatory alignment should continue after Brexit as a critical element of the UK’s future relationship with the EU.”

The leasing market and beyond will be monitoring the situation closely over the coming weeks, with strategies being drawn up to deal with whatever fallout we may see with the UK’s exit from the union.

AwardsThis month, the leasing world will head to Barcelona for the 15th Leasing Life Conference and Awards on 28 November. The high-profile event will bring together a range of key decision makers in the asset finance, leasing and banking space to explore and discuss industry trends.

Panels of industry experts will assess how Europe’s leasing industry is responding to the value chain opportunity, the role of technology in this transformation, strategy-driven innovation and much more. As day turns to night, attendees will slip into their glad rags for the gala dinner and awards ceremony – celebrating the best of the leasing industry. Do not miss the chance to book your spot! <

Industry watches intently as UK enters Brexit crunch time

Challenge the ProcessEmbrace the Vision

Contact us today [email protected]+44 (0)208 123 5508

www.vipappsconsulting.com

@vipappsconsult vip-apps-consulting-limited

VIP Apps Consulting help companies to optimise business processes for the next generation of leasing and financial services ecosystems.Our diverse multi-lingual asset finance and technology-focused team can unlock your technology vision, deploy the right solutions for your organisation and let you capitalise on the business opportunities that technology innovation brings.Our unique process-driven approach and DELIVER and AMOBI proprietary methodologies deliver greater value and efficient business outcomes, minimising cost and risk.

Leasing

LL November 314.indd 5 14/11/2019 17:02:18


News | round-up

the month in view1pm sees annual profits increase 4% to £8.1m

AIM-listed independent finance provider 1pm has seen profits for the year ending 31 May 2019 increase by 4% year on year to £8.1m (€9.42m). Revenues increased 6% to £31.8m, up from £30m in 2018.

1pm said the figures were in line with market expectations, and the results had been driven from its “hybrid” funding model, enabling it to both write business on its own book and to broke-on to third-party funders. It said deals written on its own book from internal cross-selling of the group’s products during the year were £4.8m (2018: £1.9m), an increase of 2.5 times.

The total dividend for 2019 (combined interim paid and final proposed) of £0.0084 per share was up by 29% from £0.0065 per share in 2018. The business added that 50%

of revenue for the current year to 31 May 2020 had already been secured as “unearned income”.

On current trading and prospects for the business, chief executive officer Ian Smith said: “In what have remained uncertain pre-vailing business conditions, we are delighted to be reporting continued year-on-year growth in revenue and underlying profits.

“The results for the year ended 31 May 2019 demonstrate the strength of our market position, our multi-product offering and our flexible operating model. The group is well positioned to deliver further strategic growth in order to increase shareholder value over the next five years.”

1pm said its write-off levels were consistent, with net recoveries from previously writ-

ten-off receivables, and write-offs in the year amounted to £0.6m, representing approx-imately 1% of the year-end own book net portfolio, unchanged from 2018.

Bad debt provisioning increased, with a balance sheet provision held at 31 May 2019 of 1.9% of the net lending portfolio, up from 1.5% in 2018. Additionally, acquisitions performed in line with management expec-tations, with the full realisation of earn-out consideration for two more acquired entities – Positive Cashflow Finance and Bradgate Business Finance – during the year.

Non-executive chair John Newman said: “I am pleased to report that the group has delivered a further year of robust performance and growth. The financial year was a period of development for the group, with the businesses previously acquired as part of the group’s ‘buy and build’ strategy focused on operational performance and on delivering organic growth.”

He added: “The achievement of a number of earn-out targets has demonstrated the success of the strategy and the continuing commitment of the local management teams. The focus of our strategy is for our group to be a well-diversified and risk-mitigated alter-native finance provider, recognised as having a comprehensive range of business finance products to offer to an expanding base of UK SMEs and consumers.” <

Women in asset finance discuss changing face of industryMore than 30 senior female executives from high-profile asset finance and alternative lending firms have met to discuss changing the profile of the industry.

Supported by Simply, Lombard and Cloud Lending, and hosted by the Leasing Foundation Innovation Initiative at the Trading House, the purpose of the event was to “facilitate useful connections and recognise the strength in a collective organisation”.

Simply chief operating officer Ylva Oertengren said: “This is what power and energy looks like. Everyone here is part of leading the change across our industry and it is truly inspiring to be involved with it.

But there is more to be done. This event isn’t about diversity for diversity’s sake – it’s been long recognised that there is an unbreakable link between diversity, in all forms, and innovation. As that boosts the economy at large, we need to drive the movement to change the profile of the finance industry. By doing so, we will be able to better support our SME customers and those entering the sector.”

All guests were encouraged to bring a female colleague who is either beginning a career in the industry or working to pave the way for others.

At the most recent Leasing Foundation panel discussion, topics covered included marketing, the customer experience and

staying ahead of the curve. The event was the latest in a series of Central London-held breakfast discussions, also focused on customer interactions and how commercial enterprises need to move and adapt to the times in order to survive and thrive.

The panel comprised India Pollard, product marketing associate at challenger Monzo Bank, Sridhar Iyengar, managing director for Europe at software provider Zoho, Richard Manthorpe, product director at telecommunications firm Redwood Technologies, and Alex Marsh, senior commercial director at P2P lender Klarna. The event was moderated by Andy Trimmer, head of technology at Simply Asset Finance. <

LL November 314.indd 6 14/11/2019 17:02:20


News | round-up

BNP Paribas to launch UK dealer stock funding product

Two divisions of the BNP Paribas Group have collaborated to launch a stock funding product for UK motor dealers.

The new offering from BNP Paribas Personal Finance and car leasing specialist Arval enables dealers to spread 100% of the purchasing cost, including fees, over phased repayments of up to 120 days. Dealerships will be able to purchase and finance used stock in one transaction through Arval’s online sales platform, MotorTrade.

The aim of the product is to make it easier for dealerships to increase stock levels, manage cashflow and plan expenditure levels.

Funding is applied to the account automatically for vehicles bought through the stock funding option. All information relating to the purchase, such as invoices, statements and payment schedules, is available to view on any connected device through an online account. The MotorTrade platform gives dealers access to around

45,000 ex-lease vehicles each year from various manufacturers.

Andrew Brameld, managing director at BNP Paribas Personal Finance’s motor finance business in the UK, said: “We’re delighted to be partnering with Arval to deliver this industry-leading stock finance solution to motor dealers across the UK.

“Here at BNP Paribas Personal Finance, we have extensive experience in delivering quality, affordable financing options, and we’re sure dealers will find this to be a useful tool as they manage and finance their stock levels.”

Gary Burns, remarketing director at Arval UK, added: “Arval MotorTrade has grown rapidly to become the go-to platform for retailers who are looking to purchase high-quality used stock for their forecourts.

“This partnership further enhances our MotorTrade proposition, making it even easier for buyers to access the stock they need while giving them the confidence that they have a finance plan in place they know they can trust.”<

IGF: Three-quarters of SMEs expect growth over next yearGrowth and funding ambitions have strength-ened among SMEs over the course of 2019, according to a report by Independent Growth Finance (IGF).

Of those seeking to raise funds to support growth, the average amount has also increased by 22%, or £250,000 (€291,000). However, the number of UK SMEs expressing concern about Brexit has risen to 93%. In the North West of the country, 41% of businesses cite Brexit as their main concern.

Of the 500 UK business leaders surveyed, 85% were open to switching their funding provider in exchange for more flexibility (35%), while sector-specific expertise (32%) and 48-hour decision-making (26%) were also significant factors identified.

John Onslow, chief executive officer at IGF, said: “It’s incredibly encouraging to see so many SMEs focused on the future. Making decisions that are best for them and their employees in an unpredictable landscape. This includes a greater willingness to switch fund-ing providers to get the flexible funding they need, when they need it. We’re not surprised that our research shows three of the top five funding sources are alternative finance.”

Kerrie Murray, chief financial officer at Pryme Group, a provider of integrated man-

ufacturing solutions, added: “We work with key partners in the alternative finance space so we can be nimbler.

“Independent Growth Finance is our big-gest lender, which makes the decision-making process simpler and less time consuming. It also allows us to be confident that our budget and plans provide sufficient flexibility to react to external developments if and when they unfold,” Murray continued.

Almost half (45%) of UK businesses are looking to invest in technology, while a quarter (27%) focus on product development; however, only 16% were looking for funding for international expansion.

In July, IGF achieved £100m client funds in use through the funding of UK SMEs. The company’s audited 2018-19 accounts showed a 39% growth in funding provision, as com-pared to the 2017-18 financial year. <

LL November 314.indd 7 14/11/2019 17:02:22


JCB Group signs remarketing contract with BCAKent and Sussex-based motor dealer JCB Group has agreed a two-year remarketing deal with vehicle marketplace BCA.

The partnership will enable up to 3,000 vehicles to be sold annually at BCA Blackbushe in regular sales every Friday, with the first sale scheduled for 11 October 2019.

JCB Group holds franchises for Volkswagen cars and vans, Mercedes vans, Honda, Kia, Mitsubishi, Seat, Skoda and SsangYong in Kent and Sussex. It employs over 500 staff throughout its network.

JCB Group managing director Jonathan Bischoff commented: “BCA shares our commitment to innovation and has the scale to support our ambitious growth plans for our used programme.

“The team at Blackbushe bring a wealth of experience to ensure the maximum buying power is generated for every JCB Group sale, both in the auction lane and through BCA Live Online.”

BCA has ramped up its investment in technology to improve the buyer experience. The BCA Buyer app has seen a series of upgrades in 2019, and offers mobile access to bid on the largest range of used vehicles in the UK with the ability to search and track stock in real time.

Adam Lish, head of new business – dealer UK at BCA said: “JCB Group is an ambitious motor retailer, and we look forward to working together in close partnership to support its used-car programme and wider growth plans.” <

News | round-up

HMRC to postpone implementation of reverse VAT chargeUK tax body HMRC is to delay the introduction of the reverse VAT charge for construction services until October 2020.

The domestic reverse charge for construction services was due to be implemented from 1 October 2019. Originally confirmed by the government in the Autumn Budget of 2017, with HMRC guidance published in November 2018, the reverse VAT charge is intended to reduce the scope for VAT fraud in the construction industry. The reverse charge moves responsibility for accounting for VAT on any construction supplies to the customer rather than the UK supplier.

David Redfern, tax preparation specialist and managing director at DSR Tax Claims, said: “The introduction of the reverse charge was given such a long lead-in due to the recognition by HMRC that it would have a negative impact on cash flow for many construction businesses, as well as the impact on accounting systems to account for VAT correctly.

“However, HMRC seems to have been unprepared for how great that negative impact would be, particularly as the construction industry struggles in such an unsteady economic climate. The decision to delay for a further year is to be welcomed by all who would have been adversely affected by the reverse charge.”

When making the decision to delay the reverse VAT charge, HMRC pointed to concerns raised by representatives of the construction industry that many

businesses were not ready to implement the change from next month. HMRC also cited concerns around a potential clash with Brexit as a contributory factor in the delay.

“HMRC has stated that it will use the delay to provide additional resources to ensure that the industry is aware of the change and can cope with it. Additionally, it has said it will focus on tackling existing VAT fraud in the industry which appears to be a pragmatic approach, balancing as it does the need to tackle VAT fraud within the industry without harming the industry as a whole. It does need to ensure, nevertheless, that the construction

services industry is not subject to further disruption at such a fragile time for the economy as a whole”, added Redfern.

In September, business groups wrote to Chancellor Sajid Javid expressing concerns with plans to prioritise repayments to HMRC over other creditors in insolvencies. Under legislation included in the draft Finance Bill, the UK government is planning that, from 6 April 2020, certain tax debts owed by an insolvent company – including VAT, PAYE, and employee NICs – will be repaid to HMRC in priority to debts owed to floating charge holders and unsecured creditors, including a company’s pension scheme and its suppliers. <

LL November 314.indd 8 14/11/2019 17:02:28


News | round-up

The leading provider of UK & International Executive SearchAsset Finance and Equipment Leasing

Vendor | Captive | Sales Aid | Direct | Structured Finance

Discover how we can help achieve your career objectives

®

looking for a

of scenery?change

www.newleafsearch.com+44 (0) 203 740 7222

Santander to exit UK asset finance marketSantander UK will stop writing new asset finance business in the UK from the end of 2019. According to reports in The Sunday Times, sources close to the bank said that low interest rates, UK regulation and Santander’s position behind the ‘Big Four’ had made competition difficult.

Tim Hinton, head of corporate and commercial banking at Santander, said: “The banking industry is changing at a rapid pace, and to ensure that we can continue to grow and improve our business, as well as meet the growing needs of our core customers, we made some changes to our operating structure and focus earlier this year.

“Having reviewed our priorities, we concluded that now is not the right time for us to invest further in our small asset finance offering, which comprises less than 5% of our lending to corporates and SMEs.”

Hinton added: “We remain committed to continuing to support our corporate and commercial clients through our wide range of products and services.”

In June, The Daily Telegraph reported that Santander intended to cut costs by €1.2bn

globally, meaning it would close around 1,150 retail banking branches, potentially affecting more than 3,700 jobs.

The lender added that the restructure would affect its corporate and commercial banking division, with the report stating it would consult 330 staff about redundancy while creating 130 new roles.

Santander’s asset finance business in the UK is currently estimated to be worth around £800m (€931m). The bank said it would continue to support core clients through the provision of different types of lending, and would reduce its existing asset finance portfo-lio over time.

Santander UK had also entered the funding competition for the £775m Banking Compe-tition Remedies programme for the distribu-tion of RBS funds.

In June this year, Premier UK Events, an event production company based in Leices-tershire, secured a £460,000 funding package from Santander Business Banking to purchase a hi-tech LED video wall. The funding from Santander Business Banking included a £300,000 asset finance line.

In April, Santander Business Banking provided £50,000 asset finance funding to Axminster-based Axe Skip Hire for a 7.5 tonne DAF truck. <

LL November 314.indd 9 14/11/2019 17:02:31


News | round-up

MIC buys Think Business FinanceMake it Cheaper (MIC), a portfolio company of investment firm ECI, has announced the acquisition of SME lender Think Business Finance.

Headquartered in Chelmsford, Essex, Think Business Finance’s aim is to help businesses borrow money more easily through matching and tendering platforms and expert lending managers.

Think Business Finance is involved in sectors including commercial property, asset-based finance, invoice finance, unsecured and short and medium-term funding.

Think Business Finance is MIC’s fourth bolt-on acquisition since ECI invested in the company in 2017. Think Business Finance was founded and is managed by Jamie and Ian Stewart, who will be staying on to run the business. Established in 1976, ECI typically invests £25-100m of equity in deals valued up to £200m.

MIC chief executive officer Paul Galligan said: “At MIC we are building the leading platform for businesses to lower their costs on all their business essentials. Whether it’s energy, broadband or insurance, switching is a proven way of lowering bills.

“By partnering with Think Business Finance, we can now offer our customers even more ways to save time and money. This is our fourth bolt-on since partnering

with ECI, and we look forward to expanding our offering as we continue to grow the business.”

Jamie Stewart, chief executive officer at Think Business Finance, commented: “We are excited to partner with MIC. Joining forces will enhance our product offering, helping our customers save even more, while at the same time MIC will be able to provide our customers with more solutions

to help them run their businesses more efficiently.”

ECI partner Richard Chapman said: “MIC is already generating excellent organic growth, and today’s platform deal will help the company serve even more SMEs than before. We look forward to supporting MIC as it becomes the UK’s number one switching provider for ambitious, entrepreneurial businesses.” <

To power your business call us today

01784 227322hitachicapital.co.uk/business-finance

With award winning service and over 30 years of expertise, Hitachi Capital Business Finance provides a flexible range of asset finance solutions – powering businesses of all sizes, across sectors and specialities.

• Asset Finance • Block Discounting

• Stocking • Invoice Finance

Together, powering UK businesses to grow

Finance is provided by Hitachi Capital (UK) PLC. Authorised and regulated by the Financial Conduct Authority. For business purposes only. Full terms and conditions apply.

Bluestone Leasing launches prepaid reward cardYorkshire-based credit broker Bluestone Leasing has launched a prepaid reward card on 1 October as part of its Spark reward scheme for valued partners and professional introducers.

Replacing the old points-based scheme, registered members earning rewards will be issued with a prepaid Visa card with added benefits including 5% cashback at over 50 retailers, 2.5% off selected grocery shopping, a top-up facility, Apple and Google Pay-enabled systems, and a dedicated app to manage the account.

Bluestone Leasing works with over 600 partners in sectors including interiors, technology, health and fitness, and renewable energy, all of which could benefit from Spark rewards.

Bluestone Leasing sales director Steve Russell said: “Our relationships with our

partners and introducers are absolutely key to us, and launching the new Spark reward prepaid card is our way of saying a big thank you for their continued support.

“Interest in the cards has been through the roof, and we know how eager our partners are to access the host of benefits the Spark card will bring, while our team can’t wait to start issuing lots of rewards.”

Bluestone Leasing, not to be confused with Ireland-based Bluestone Asset

Finance, is one of the UK’s largest independent leasing companies, and has traded since 1996. It has access to the UK’s largest funding panel, and handles transaction values ranging from £1,000 to over £10m.

Spark membership is subject to a signed Bluestone Leasing trading agreement, and members take personal responsibility for declaring rewards to HMRC for tax purposes.

Online retailer Amazon is planning a small business customer credit card to support its relationship as a supplier of SMEs, according to reports.

Bloomberg reported that the e-commerce site has been in talks with JPMorgan Chase & Co. to launch a co-branded credit card for small business owners that shop on its website. <

LL November 314.indd 10 14/11/2019 17:02:34


News | round-up

Close Brothers provides printer fundingClose Brothers Asset Finance has provided funding for Scottish business Bell & Bain’s printing presses as part of the printer’s £20m (€23.2m) investment programme.

The funding from Close Brothers is for two new Rapida 145 large-format presses from Koenig & Bauer, due for delivery to Bell & Bain’s Glasgow factory in early 2020. The latest deal is a continuation of Close Brothers’ financial partnership with Bell & Bain, having facilitated its recent management buy-out of J Thompson Colour Printers.

Founded in 1831, Bell & Bain is one of the oldest independent book and journal printers and binders in the UK.

Roger Aust, managing director of Close Brothers Asset Finance’s print division, said: “The machines will increase Bell & Bain’s capacity and play a key role in matching its ambitious growth targets by serving the dual purpose of both mono book work and high-quality coffee table book printing.”

Nick Aust, senior relationship manager at Close Brothers Asset Finance, added: “We al-ready have a strong working relationship with

the team at Bell & Bain, and it made sense for us to work together with them on acquiring these two new presses. They know what they want to achieve, and have clear goals, being their financial partner is exciting, and dealing with them is a pleasure.”

Bell & Bain chair Steve Docherty said: “We want to work with a lender that understands both Bell & Bain and myself. I find it more

than difficult to deal with high street lending because it takes forever to get an idea into reality, just as the boat sailed.

“Nick and Roger Aust want their clients to be successful and provide a ‘yes’ or ‘no’ answer to the next stage of any company’s journey. We work together well – it’s a fantastic part-nership and I thank them both and the Close Brothers Asset Finance team.” <

To power your business call us today

01784 227322hitachicapital.co.uk/business-finance

With award winning service and over 30 years of expertise, Hitachi Capital Business Finance provides a flexible range of asset finance solutions – powering businesses of all sizes, across sectors and specialities.

• Asset Finance • Block Discounting

• Stocking • Invoice Finance

Together, powering UK businesses to grow

Finance is provided by Hitachi Capital (UK) PLC. Authorised and regulated by the Financial Conduct Authority. For business purposes only. Full terms and conditions apply.

LL November 314.indd 11 14/11/2019 17:02:36


News | round-up

ABN AMRO CF agrees £10m receivables funding package with food distributor

ABN Amro Commercial Finance has delivered a £10m (€11.6m) receivables funding line to food distributor Özgür Tarim UK.

Established in 2017, Özgür Tarim distributes dried vine fruit across the UK from its headquarters in Halstead, Essex. The business imports its produce from the Özgür family plant in Manisa, Turkey.

ABN Amro has provided a £10m receivables funding solution, including an

Enterprise Finance Guarantee top-up loan.The funding comes as Özgür Tarim

sought a funding partner to bridge the gap between supply and demand. Additionally, the deal aims to help broaden the business’s portfolio through the acquisition of new contracts and expansion of its product range.

Ryan Whitworth, business development manager at ABN Amro said: “The team at Özgür Tarim have been a joy to work with.

By taking the time to understand their business requirements, we have been able to deliver a flexible funding solution to support their growth ambitions.”

Marcus Welch, managing director at Özgür Tarim added: “We are pleased to have been referred to ABN Amro. The team have been excellent – all the way from the initial contact through to sales support and handover to a dedicated relationship manager.

“The ease of doing business and a relationship-driven approach provides us with a suitable funding package and strategic partner for growth.”

ABN Amro Commercial Finance appointed a head of sales in August, following a similar appointment to the bank’s Lease UK business. Jeremy Harrison has been given the sales role and will lead an origination team focusing on mid-market, corporate and international businesses with financing needs in the UK and Europe.

Harrison will report directly into ACF commercial director Deborah Bell, and will liaise with the head of sales for ABN Amro Lease UK, Gareth Stockton, as the two business lines support mutual clients across ABN Amro Asset Based Finance. <

Hitachi Capital launches flexible SME paymentsHitachi Capital Business Finance has launched a Smart Funding payment plan intended to assist SMEs in securing growth funding without disrupting cash flow.

The flexible repayment plan will allow small businesses to create their own repay-ment schedules for finance that reflect their cash-flow forecasts and seasonality of business.

The flexible payment plan is the first in a series of funding initiatives that Hitachi Capital Business Finance will launch in the coming year. The plan is available to sole traders and small businesses that have been trading for three or more years.

Key features will include access to business funding for up to £500,000 (€580,000) and a typical APR of 6.8%. Small businesses can then create their own repayment schedules; the repayment term will be between two and five years, and the finance decision can

be made online. There will also be customer service support available to small businesses, and a new range of Smart Funding business guides, all intended to help small businesses with planning and budgeting.

The online calculator will also help finance applicants to work out the repayment schedule that best meets their needs and takes account of seasonal cash-flow forecasts.

Hitachi Capital’s latest Business Barometer research found that UK small businesses were working hard to secure growth despite the challenging context of unprecedented market uncertainty. While the proportion of SMEs predicting growth during the autumn months was unchanged on previous months at 35%, a greater number of enterprises were consider-ing new initiatives to achieve growth.

Gavin Wraith-Carter, managing director at Hitachi Capital Business Finance, said:

“We have been supporting small businesses for 35 years and we understand the roller-coaster of business life which, for many, has been exacerbated by the levels of economic uncertainty that have become the norm – and is something we all have to adjust to.

“That’s why at Hitachi Capital Business Fi-nance, we have adopted a new smart funding philosophy to our products and services. We recognise that no two business are the same and, in the current market climate, small business agility will be key to them seizing future growth, turning uncertainty into opportunity.”

Recent research from Hitachi Capital UK found that late payments are costing SMEs an estimated £51.5bn. A survey of 1,000 SME owners found that 31% of SMEs have experi-enced late payments costing their business at least £10,000 in the last 12 months. <

LL November 314.indd 12 14/11/2019 17:02:39


News | people moves

SHAWBROOK RECRUITS MD TO LEAD ASSET FINANCE TEAMShawbrook Bank’s business finance division has recruited Chris Richold to lead its specialist asset finance and sector finance team.

Richold joins Shawbrook with over 20 years’ experience in the asset finance industry, and six years at a large financial institution leading the wholesale and specialist asset finance team.

Before this, Richold was in charge of a “real asset” investment business within a global banking division. His range of experience covers new business origination, portfolio management and asset management.

At Shawbrook, Richold will work with established teams in specialist markets including marine and aviation, healthcare, agriculture, renewable energy and technology.

ULTIMATE FINANCE HIRES TWO DIRECTORS TO NORTH WEST TEAMAsset-based lender Ultimate Finance has hired two regional directors, Vinnie Dobie and Jemma Taylor, for its North West sales team.

The additions will widen the sales team’s network reach and increase funding support it can offer to businesses.

Dobie has joined the sales team to build on his expertise in invoice finance to offer more tailored funding solutions to his contact base, while Taylor brings a broad range of funding expertise to Ultimate Finance from her experience in business funding and commercial banking. Both bring in-depth knowledge of the local economy and strong regional relationships.

Ultimate Finance CEO Josh Levy said: “The North West has always been a core region for Ultimate Finance. We’ve been delivering funding for businesses here approaching 20 years. The depth of our relationships within the region was reflected in our recent results.”

HAYDOCK FINANCE APPOINTS SALES DIRECTORHaydock Finance has named Andy Taylor as sales director, a new role to the business.

Taylor hails from Widnes and has joined Haydock as sales director following a career which already spans over 20 years in asset-based lending. He will report to John Jenkins, Haydock’s chief executive officer.

Taylor’s career in the industry began with NWS Bank, and includes stints with GE Capital Equipment Finance, over 13 years with market-leading ING Lease UK, and more recently Hitachi Capital Business Finance, where he was head of sales, responsible for broker, vendor, block discounting and stock finance.

During his tenure at Hitachi, Taylor was directly accountable for growing the company’s own book from around £250m (€291m) to well over £1bn, said Haydock.

In this new post, Taylor will be responsible for structuring Haydock’s national sales strategy, which will underpin Haydock’s growth plans brought about by private equity investment announced in 2018. The strategy will involve further developing and improving the current core broker offering, and identifying, developing and executing opportunities in structured finance.

CLOSE BROTHERS BUSINESS FINANCE APPOINTS SALES DIRECTORFinance broker funding provider Close Brothers Business Finance has appointed a national sales director.

David Forbes is an internal appointment who has spent close to four years in a similar role in the Asset Finance business. Forbes began his career as part of the Yorkshire Bank Graduate programme before moving into fast-moving consumer goods sales and a career at Mars UK. He joined Lombard in 1999 and spent 16 years in leadership roles across a variety of

asset finance divisions.

Forbes said: “The team at Close Brothers Business Finance is one of the most talented and passionate in our industry with an enviable reputation for customer service, and I’m delighted to now be part of that team. Having the history, brand and culture of the business behind me provides an excellent opportunity to grow the business strategically within our target markets.”

STB COMMERCIAL FINANCE ADDS MIDLANDS ABL DIRECTORSecure Trust Bank Commercial Finance has added to its team in the Midlands with the appointment of Matt Broomfield as regional sales director.

Broomfield has 13 years’ experience in the business lending market, having previously worked within the asset-based lending departments of major UK banks such as RBS and HSBC. He has developed knowledge of the Midlands market specifically, where he has been based throughout his career.

In his role at Secure Trust Bank, Broomfield will be working alongside accountants and business advisors to support SMEs seeking asset-based lending between £1m and £50m. Typical scenarios will include service-led refinances, private equity transactions, restructures and turnaround, as well as growth opportunities. He will join the Midlands-based team headed by regional managing director David Parsons.

Secure Trust Bank Commercial Finance said it had provided £220.7m worth of funding to UK businesses as of 30 June 2019. <

Leasing Life’s monthly summary of the key career moves in the leasing and finance industrypeople moves

LL November 314.indd 13 14/11/2019 17:02:40


feature | plant and machinery

Due to the scope of the sector, each individual and finance provider can approach and define plant

and machinery in subtly different ways. “Our definition is mobile and static

equipment in all sectors of the construction and recycling industries, including agriculture and green energy,” says Andy Sagar, managing director for construction and recycling at Close Brothers Asset Finance.

Richard Gendreau, head of markets and partnerships, equipment and logistics at BNP Paribas Leasing Solutions, says: “For the plant and machinery market, 2018 was a record year in terms of sales. While the industry is known to be fairly traditional in terms of its financing choices, it is gradually moving towards newer, service-driven models.

“At BNP Paribas Leasing Solutions, the equipment and logistics solutions division,

in charge of plant and machinery, is a market leader in Europe in industries like agriculture, construction, material handling and transport.”

Kevin Bovington, vendor relationship director at Société Générale Equipment Finance (SGEF), says: “I am responsible for our global vendor programmes in the construction, agriculture, materials handling and industrial equipment sectors, including machine tools and printing. This broadly represents how I define plant and equipment.”

CHANGING ATTITUDESAttitudes within the plant and machinery leasing industry are being influenced by economic turmoil in the UK, according to industry experts – particularly by continual political shifts and ongoing uncertainty around Brexit.

Market players are anticipating a higher demand for the leasing of these products in the future, which is dependent on politics, the sector they are in and rise of the subscription economy.

Sagar says: “Every time there is an election – and all the signs point towards one happening soon – there is a spike in capital expenditure. All the main political parties have strongly indicated a commitment to infrastructure projects including house building, roads, rail, hospitals and schools.”

He adds: “We also anticipate an additional spending on flood defences and plastic recycling initiatives.”

In terms of political uncertainty affecting the industry, the demand for construction projects awaiting Brexit has risen, according to Bovington.

“In some sectors we can see markets like

The term ‘plant and machinery’ is used to describe any equipment essential to the running of a business, although it typically refers to larger equipment, especially

in the construction sphere. Leasing Life speaks to industry experts about changing attitudes to leasing these products, developments in technology and financial products, and how shifting economic factors in Europe are affecting the sector

only the essentials: how the plant

and machinery sector fits into asset finance

LL November 314.indd 14 14/11/2019 17:02:43



Southern Europe, Eastern Europe and Russia have increasing demand for industrial equipment and financial solutions.”

With the rise of the subscription economy, Gendreau says he anticipates the rate of leasing equipment to increase.

“Having said that, it will also depend on the sector. For instance, in the construction equipment market, we do not expect an increase in 2020 as big rental companies have already invested a lot in 2019 and have a more restricted budget in 2020.”

BENEFITS OF LEASING?Leasing over purchasing comes with a range of benefits including a quicker return on investment, easier upgrade to new technology and some potential tax benefits.

“If you lease, you spread the debt (up to a seven-year period) with immediate returns from such a large investment, and with limited impact on cash flow,” Sagar says.

Bovington explains that it is rare for end customers not to use finance in some form or another to acquire equipment.

“It is important for them to manage cash flow by balancing revenues earned from contracts and equipment payments or rentals. It is important for companies to have alternatives to their own bank facilities for funding of asset related finance including leasing. For vendors, the customer relationship may cease after a sale. With leasing, it will continue for the lease duration and beyond into the next transaction.”

Plant and machinery markets have

historically been quite traditional in their financing choices with significant parts based on loan arrangements, according to Gendreau, who explains that the material handling market is different as it has always been more advanced than others in trying the rental services model.

“Leasing is quickly catching up because of the multiple benefits it represents,” he says.

“One of these benefits is streamlined budget management with fixed recurring repayments spread across the life of the asset.”

In addition, Gendreau notes that there are no ownership risks like equipment becoming obsolete, repairs and maintenance, stating:

“The benefit of plant and machinery is clearly the use and not the ownership.”

THE ‘DIGITAL AGE’In recent months, plant and machinery leasing has seen a range of technological and financial developments ranging from autonomous ‘smart’ equipment to intelligent machines and battery-powered equipment.

‘Smart’ equipment involves remotely controlled or telematics-based equipment that will improve efficiency in the industry.

“Smart farming will change the market landscape over time with improved efficiency, and the reduction of water or fertilisers usage, while smart excavators and bulldozers have a built-in ability for improved accuracy of digging or grading in,” Gendreau predicts.

The equipment finance market follows the same trends with smoother client journeys, according to Gendreau, who adds: “These combine automated decisions, electronic documentations and e-signatures.”

Sagar says the last 12 months have seen growth in smaller plant equipment becoming battery powered, typically at the expense of diesel – a trend that includes solar generators to recharge batteries.

“We have a customer who’s working in rail, and recharging their generators during the day for the night shift,” he explains. “We also see solar night lights that are charged during the day to allow for overnight work,” he adds.

A recent trial in Sheffield saw a local waste-collection firm convert two diesel lorries into

electrically powered vehicles, according to Sagar. “The scheme will repurpose existing waste lorries, turning them into electric vehicles powered by energy made from burning the rubbish they can’t recycle,” he explains. “Household waste collected by these new lorries will be taken to the Energy Recovery Facility, and will be burnt in the incinerator situated underneath a large boiler which generates steam to power a turbine.”

Bovington agrees that ‘intelligent’ machinery, much like the smart equipment that Sagar discusses, puts us in the “digital age” where leasing is concerned, providing data on their performance, location, maintenance and serving requirements.

He continues: “Similarly, the finance industry has developed a range of digital tools to improve efficiency, to enhance point of sale delivery, to quote, to credit score, to approve and to finalise the document with e-signatures.”

VALUE AND RESALEThe strength of the resale market in plant and machinery has been positive recently, according to Bovington.

For vendors, the customer relationship may cease after a sale. With leasing, it will continue for the lease duration and beyond

Richard Gendreau, BNP Paribas Leasing SolutionsAndy Sagar, Close Brothers Asset Finance

LL November 314.indd 15 14/11/2019 17:02:44



“Fewer insolvencies and liquidations mean most resales are completed in an orderly fashion at the end of the lease.

“Well-maintained equipment continues to retain strong value in the resale market. We work very closely with our vendor partners, which is key for us and the vendor to protect equipment values when remarketing equipment.”

For more specialised equipment, Bovington explains that it generally takes longer to sell, and therefore decreases the marketing value.

“Our asset management team are regularly assessing the market data to monitor trends in depreciation values, and the market values have been positive in our recent experience.”

Mobile equipment has strong residual values in Europe, mainly because of the value of sterling as auction houses offer extremely high prices.

Explaining why the resale market remains buoyant, Sagar says: “Equipment is generic across the globe. The price of yellow metal has gone up, but the capacity isn’t there.”

Most assets in the equipment and logistics markets have strong resale values, such as bulldozers, excavators and dump trucks.

Gendreau adds: “At BNP Paribas Leasing Solutions, we monitor the value line of each asset in order to define the residual position we take at the end of the lease and help the

vendors in defining the appropriate moment for an equipment change.”

He says the resale market is strong, as it is a liquid market in which the assets have long life-cycles with easy maintenance, and little or no technology disruption is expected, adding:

“There are more second-hand assets sold in the market than new.”

ALTERNATIVE FINANCE“It is important to support the whole value chain in equipment procurement and rental products, including maintenance, through remarketing of assets,” Bovington continues.

SGEF has developed a series of pay-per-use products with vendors, demand for which is increasing.

According to Bovington: “Rapid online credit application and approval technology

supports the flow of businesses, as speed and efficiency are key to the service demanded in today’s market.”

Close Brothers Asset Finance has been involved in various projects, including building a 100% carbon-neutral leisure complex that uses state-of-the-art technology to heat water.

For BNP Paribas Leasing Solutions, Gendreau says the firm has always had the ambition to move up the value chain.

“We are still at the start of the service-based model with value-driven solutions that will be scalable and will impact the business models of vendors and lessors.

“The asset-as-a-service notion covers many different realities, and we will keep on working with vendors to develop tailor-made solutions which will be strategic sales enablers and help grow customer value in a service-minded approach with operational efficiency.”

The business has also launched the industry’s first B2B marketplace, Kintessia, where professionals from the agricultural, materials handling and transport sectors can buy or rent machinery among professionals, promoting the sharing economy.

ECONOMIC PRESSURES Brexit, US trade and political risk in the Middle East were cited by Gendreau as the main economic factors affecting the market. “Globally, the market does not like uncertainties,” he notes.

Brexit uncertainty in particular has been affecting the plant and machinery sector, as vendors are seeing a deferral of decision making on buying until the terms of the ‘deal’ become clearer.

“Dealers in general have important stocks in Europe, while in retail, incoming orders are reducing. That being said, the level of activity in BNP Paribas Leasing Solutions has been very strong in the first half of 2019, with growth in the equipment logistics, plant and machinery field,” Gendreau adds.

Bovington agrees that global influences from the Middle East and Brexit have been affecting the market. One example that Bovington touches on is that Europe has seen higher demand for improving “energy efficiency, sustainability and recycling”. This is changing the way equipment is sold, as operators need to be more aware of the impact their equipment may have on the environment.

“Methane-powered vehicles, more electric rather than diesel engines, and use of solar and wind power are all high on the industrial agenda following government initiatives,” explains Bovington.

Sagar adds that high street banks have also readjusted their lending criteria and risk indicators, which make funding more difficult to get hold of. Despite the changes, however, Sagar believes the market remains strong.

“While Brexit has somewhat slowed the market, it remains buoyant, and we’re seeing a spike in our sector lending,” he says.

PROSPECTSWhile political shifts and Brexit uncertainty may be causing ripples in the plant and machine leasing industry, it is clear that the sector is holding firm, making technological leaps with the introduction of new smart equipment and intelligent machines.

Meanwhile, industry developments such as battery-powered equipment and the concept of smart farming will, with time, improve efficiency and environmental consciousness.

Although the political situation affects the sector’s future, the most exciting prospects in the industry lie in reducing its carbon footprint and fuel dependency to help mitigate the ever-growing financial crisis. <

Methane-powered vehicles, electric rather than diesel engines, and use of solar and wind power are all high on the agenda

Kevin Bovington, SGEF

LL November 314.indd 16 14/11/2019 17:02:46


leasing life conference and awards

Last call for the Leasing Life Conference and Awards 2019Be sure to submit your nominations for the Leasing Life Conference and Awards 2019 – due to be held in Barcelona on 28 November.

The awards will bring together the industry’s most successful and innovative financial institutions and solution providers, and celebrate the year’s most impressive and successful initiatives.

Leading thought leaders from the industry will share their visions for the future, offering a great networking opportunity.

A peer-reviewed analysis will also take place to help manage 2020 market strategies, as well as a range of discussions around what the future of the market will look like.

• Be recognised as a market-leading player!

• Celebrate the most impressive and successful initiatives over the past 12 months

• Hear the industry’s key thought leaders and share their visions for the future

• Have in-depth conversations and networking opportunities in a five-star setting

• Determine what the future of the market will look like

• Manage 2020 market strategies with peer-reviewed analysis

• Join 200+ C-level executives

• Don’t miss your chance to attend this industry-leading event: register for your place today!

categories for the 2019 awardsAsset Finance Intermediary

Asset Finance Legal Provider

SME Champion – European

SME Champion – UK, Bank Lessor

SME Champion – UK, Independent or Privately Owned

Vendor Finance Provider

European Lessor

Captive Lessor

Middle-Ticket Corporate Lessor

Digital Innovation

Sustainability

Young Professional of the Year

Industry Ambassador of the Year

Lifetime Achievement

Leasing Life Conference & Awards 2019 Barcelona, Spain • 28 November 2019

LL November 314.indd 17 14/11/2019 17:02:49


feature | collaboration

In the final of the four events hosted by the Leasing Foundation Innovation Initiative in London, the discussion

focused on collaboration, cultural habits and maintaining effective partnerships in the industry.

The event was moderated by Simply Asset Finance chief executive Mike Randall, who opened the discussion by saying: “This is a time for change in our industry, and if we don’t pull together, look at that change and do something about it, then we are all going to pay the price.”

The event’s discussion panel consisted of Katrin Herrling, co-founder and chief executive at Funding Xchange (FXE); Ylva Oertengren, chief operating officer at Simply; Bernie Skivington, director – guarantee and wholesale solutions at the British Business Bank (BBB); and Greg Carter, founder and chief executive at Growth Street.

STRATEGIC PARTNERSHIPSHerrling was asked how FXE established suitable strategic partnerships that played a significant role in the company’s distribution.

Herrling said: “A fundamental aspect of our partnering strategy is that we can guarantee the business is always going to be treated fairly and that the business will always have enjoyable financing solutions.”

She also said transparency over the use of data sources and technology, and ensuring that small businesses get access to all the solutions for which they are eligible is “half of what we do”.

At the BBB, forming partnerships begins with an analysis of the market, according to

Skivington. He said: “We start by trying to understand what needs fixing in the market, what opportunities there are, how the market is evolving and what’s coming up in the future.

“When we look at a decision to invest and deploy funds, we consider the management teams, as well as the underwriting and governance. Fundamentally, we want to know that we can work with a delivery partner, that the company is well run and has good

strength in governance.”For Growth Street, Carter said a constant

demand from customers is for more speed and certainty in the credit decision.

He said: “We spend a lot of time thinking about how we can unpick the customer journey to access better sources of data in order to make faster and more confident decisions, and how we can make that journey easier for our customers.”

Partnerships serve as an important part of that strategy, according to Carter, as “more

and more business customers, like consumers, are starting to take advantage of iterative digital services for their day-to-day financial needs”.

CHANGE IN MINDSETFunders traditionally have a tendency to show reluctance towards alternative partnerships, according to Maude, who explained that cultural habits and the sharing of data are key to this resistance.

He said: “When we connect up with Growth Street or one of our other providers, we have got to transfer the customer’s data from Starling Bank to the partner. The cultural worry is that something will go wrong in that transference of data and it will get lost.”

With transference of data being a potential barrier to partnerships, Oertengren said there are two fundamental points she lives by, and which in some respects bring industry thinking back to the drawing board.

“In any part of life, you are stronger together than alone,” she says. “I strongly believe that together we can do a better job.”

Oertengren added that thinking about the customer more widely rather than just the company’s own pure interest is crucial to a partnership. She noted: “It is all about the customer journey. Partnership is crucial, as it allows us to think differently and innovate, and that’s the source of inspiration for our businesses in the future.”

Where data is concerned, Oertengren said due collaboration is only possible with data sharing, and players in the industry are unable to this because of limitations in the

Athena Chrysanthou reports back from the last Leasing Foundation panel discussion in Central London, which focused on collaboration and how to

overcome the cultural barriers that can cause friction in the industry

leasing foundation: a call for

collaboration and a change in mindset

We spend a lot of time thinking

about how we can unpick the customer

journey

LL November 314.indd 18 14/11/2019 17:02:49


feature | collaboration

technical infrastructure. “You see regulatory barriers unwilling to

share that data and therefore failing to spot those opportunities that they would be able to spot if they were sharing.”

Maude agreed, stating that in the past few years he has given up on the idea that legacy infrastructures and codes are something holding the industry back: he believes the issues are more to do with culture and attitudes towards technology.

MAINTAINING AGILITYOertengren said: “My biggest fear is that we become stagnant as a business, that size and growth slows down or makes us less agile as an organisation,” adding that this ties into the selection of partners and looking at a product’s core functionality, while also thinking about the company’s vision or “road map” for the future.

“So talking about road maps and where you are going as a business, and whether that road map aligns to where we think we might go. It is important to keep your house in order and think about how you integrate these solutions with your proposition, so you can stay close to the road map,” she added.

Maude said that, in assessing their agility, companies should ask themselves how they are maintaining their software – whether they are constantly improving it or just maintaining it on a project basis. He added:

“Moving on from a project mindset into a product mindset is a key aspect of changing

that culture.”Digging deeper into the concept of

partnerships, the panel was asked how a company can ensure it has a unique selling point when everyone is partnering with each other.

“It is essentially knowing what you are really good at and sticking to what you know differentiates you,” Herrling responded.

She added that asset finance presents many possibilities, and while sticking to what you know is critical, it is important to work with others who are pushing the agenda forward if you want to access other innovative capabilities.

Oertengren said: “I would like to go back to the customer. All statistics show that SMEs are underserved when it comes to finance. There is a definite need to get more funding across to them in order to help grow their businesses.”

She added that it is important to respect

interactions with an SME, as they typically do not have much time to collaborate.

LASTING RELATIONSHIPSThe panel discussed what they look for in a company partner, and how to ensure a long-lasting relationship, which Carter believes is down to “mutual advantage centred around the customer experience”.

He added: “I think it is interesting how many dimensions that touches, so not only is this a route for us to build a better relationship with the customer, but this is also a way for us to manage risk.”

One of the most important factors in terms

of maintaining partnerships, according to Oertengren, is working with agreeable people who “share values”.

Thinking about how a partnership will end is something Maude identified as an important factor, adding: “You hope for the best but plan for the worst.”

Skivington said that there have not yet been any failed partnerships within the BBB, but some started and then the decision was subsequently made not to continue.

“It’s that intuitive side of collaborating with a prospective partner in the way they share the ambition and vision about what we can achieve together,” he said.

Towards the end of the morning the panel was asked, with cultural habits being one of the biggest barriers to the industry, what their recommendations would be with regards to first steps.

Starting small is a good approach to slowly change the culture, Maude noted, rather than causing a massive upheaval in the organisation.

Katrin added that one thing she regularly discusses is that accepting failure is a huge part of the industry. “You have to accept that 60% of what we do is going to fail,” she explained. “Unless you embrace that you are more likely to fail than succeed, you are not going to learn.” <

It’s that intuitive side of collaborating with a prospective partner in the way they share the ambition and vision

L-R: Katrin Herrling, FXE; Bernie Skivington, BBB; Greg Carter, Growth Street; Jason Maude, Starling Bank; Ylva Oertengren, Simply

LL November 314.indd 19 14/11/2019 17:02:52


country focus | spain

According to data from the Asociación Española de Leasing y Renting (AELR), total new leasing

business amounted to €5.4bn in the first half of this year, compared to €4.8bn in the first six months of 2018.

This increase was recorded despite a fall in the number of new contracts signed from 78,775 to 74,732.

Transportation accounted for 20% of new business in the first half of the year (down from 26% in the same period of 2018) while leasing of maritime and air transport equipment represented 17% of new lease business, up from 8% in the first six months of 2018. Industrial production equipment’s share of the market was unchanged at 19%.

“Consumption in Spain is growing and remains constant, while investments remain on a similar trajectory,” says AELR secretary general Manuel Garcia.

“For now, it seems that the economy maintains an expectation of growth above that of the US.”

FAVOURABLE VIEWSThe association expects leasing activity to grow by more than 10% over the next 12 months. “We would like the lease market to grow at a faster rate, but we prefer constant growth based on development of all sectors of industrial activity rather than expansion based on specific operations in specific sectors,” adds Garcia.

This optimistic view of the prospects of the Spanish leasing market is shared by Marco Frühauf, vice-president for sales – Spain, Portugal, Chile and Brazil at Grenke, who expects the market to continue to move forward as the need for technology and new services grows, although perhaps not at the same pace.

“It is difficult to make forecasts given the geopolitical uncertainties we are facing,” he says. “The global economy is affected by so many different factors, including the US-China struggle, Brexit and geopolitical instability in the energy industry. Some decision makers are choosing to wait, or at least be more cautious, when signing leasing contracts, attempting new investments, hiring more employees or preparing larger facilities to be able to cope with potential growth.”

In July, we reported that although data from the European Automobile Manufacturer’s Association indicated that demand for new commercial vehicles in the EU remained positive and had recorded the sixth consecutive month of growth, Spain was the only major market where demand declined. Light commercial vehicle registrations were down by 4.4% in June, outweighing a similar percentage increase in

spain: further down the

path of recovery

A significant rise in lease activity over the last 12 months

has come as a welcome development in Spain, which suffered from years of stagnation

following the global financial crisis. Paul Golden reports

LL November 314.indd 20 14/11/2019 17:02:56


the truck market and increased demand for buses and coaches.

Frühauf notes that as a major car manufacturer, there is tremendous pressure on Spain to promote hybrid and electric vehicles. He suggests that the country did not prepare for this trend fast enough, and that the car industry is expected to suffer as a consequence.

“Last, but not least, there is internal political instability, with general elections having to be repeated in the period of six months, which will slow down the economy and may affect the quality of leasing portfolios,” he adds.

“We have to take this into account in our risk adjustments.”

“Spain is a very creative market and leasing agents are always finding new ways to lease new, ‘unthinkable’ assets. But we prefer to go other ways and deliver specific tools to the market that allow our partners and customers to be more efficient by making the whole process easy and intuitive.”

Frühauf describes Spain as one of his company’s strongest markets, and one that has been reacting positively to the improvements it has been proposing over the

last 12 months – not only in terms of growth of business but also in terms of prospects.

“We are in contact with technology suppliers, and we perceive a big interest from their side to start to offering leasing instead of selling assets to end customers,” he adds.

“To do so, they need a leasing partner who is supportive. Of course, there is huge pressure on margins due to the lower-than-ever interest rates in the market, even if we are one of the best in class in terms of cost per contract.”

He agrees with the AELR’s forecast of double-digit growth over the next 12 months.

“The Spanish economy is tightly linked to external events and will be affected by these. But on the other side, there is such a need for modernisation of companies in Spain – especially small to medium-sized businesses

– and in this case, low interest rates will be a positive factor.”

SENSE OF OWNERSHIPIn a country where the sense of ownership is high and traditionally seen as a sign of status among smaller companies as well as individuals, Frühauf acknowledges that every opportunity has to be taken to promote leasing when talking to customers and partners.

“We organise events by ourselves or together with local associations, industry associations and large manufacturers to be advocates of leasing and emphasise its advantages,” he says. “We participate in roundtable events organised by specialist media, and sessions run in parallel to trade fairs; all indicators say

that this is rewarding for us.”Leasing as a finance solution is something

that both Spanish consumers and businesses use regularly to finance investments and they are therefore very comfortable and confident about its viability. That is the view of Javier Irigoyen, country manager of the Iberia cluster at BNP Paribas Leasing Solutions, who refers to current levels of growth as highly satisfactory.

“We are present in the key industrial markets – such as construction and IT – which continue to perform well,” he

says. “The overall financial assets market in Spain continues to be solid, and the Spanish government is trying to push the market by offering funds with the participation of the ICO [Instituto de Crédito Oficial].”

The ICO is a state-owned bank with the legal status of a corporate state-owned entity, and is attached to the Ministry of Economy and Business via the State Secretariat for Economy and Enterprise Support. ICO participates in various funds destined to finance investments in sectors and activities of special interest for the Spanish economy.

“We support the development of leasing activity in a number of different ways, including through our industrial partners by offering them financing solutions for their end customers and through companies with full service rental and fleet management offers,” says Irigoyen.

“We support the real economy by helping manufacturers and end users to access finance solutions so they can grow their business,” he adds. “We are the leaders in the IT leasing market with 33% of the market share in 2018, and hold third position in industrial equipment. In terms of the number of contracts signed, we had a 24.7% share of the leasing market last year.”

The Spanish leasing market is being driven by investments in transport – both trucks and cars – machinery and industry as well as aviation and shipping, and there are no signs of this growth flattening, suggests Société Générale Equipment Finance (SGEF) Spain CEO Jarmila Spurova.

country focus | spain

Spain is a very creative market, and leasing agents are always finding new ways to lease new, ‘unthinkable’ assets

Manuel Garcia, AELR Marco Frühauf, Grenke

LL November 314.indd 21 14/11/2019 17:02:57


country focus | spainPRIVATE BANKER

HEAR • NETWORK • DISCOVER • CELEBRATE

Private Banking and Wealth Management: Switzerland 2019 Conference and Awards

Swissôtel Zürich • 11 December 2019

The fourth annual Private Banking and Wealth Management Switzerland event will explore how the industry is adapting to market and technological shifts.

As the sector faces increasing pressure from non-traditional market entrants, squeezed margins and digital change, private banks and wealth managers must capitalise on the opportunities that disruption offers during this pivotal time.

Drawing on Verdict’s analysis and business intelligence, the event offers a unique arena to discover the trends and opportunities driving market growth.

A daytime conference will include targeted sessions, interactive debates and dedicated networking opportunities, followed by a black-tie gala awards dinner celebrating the best in private banking and wealth management in Switzerland.

We look forward to welcoming you.

To register now, or for more information, contact Carlo Mancini on [email protected] or call +44 (0)20 7832 3584

Gold Partner

Panel Host Partners

Silver Partners Bronze Partners

Media Partner

In August, Société Générale’s fleet leasing subsidiary, ALD Automotive, reported that private lease continued to show strong dynamics. It also passed an important milestone in Spain, where ALD was selected by Amazon for the distribution of personal car leasing. The firm also entered into a partnership with retail chain Eroski in Spain earlier this year.

“Aviation and shipping are leading the annual growth as of June 2019, followed by machinery and industry,” observes Spurova.

“Technology and medical, as usual, remain stable. Depending on the period of the year, we can see more variations in transport and construction, as these are always very dynamic markets.”

SGEF has not yet observed any particular impacts of the wider economic climate on the leasing market in Spain, although it continues to closely monitor possible uncertainties in the world economy which will most probably impact the Spanish market.

“The market has not yet recovered the volumes of 2008, although we can observe a consistent rate of growth despite some seasonal effects,” adds Spurova.

“There are two regions that are mainly driving leasing investments: Madrid and Catalonia. At the European level, the market growth of the Spanish leasing market is above average, with still relatively low penetration to GDP, demonstrating its potential for growth. All the indicators make us think that we should expect continued growth with an increase above the level of 2018.”

When asked what SGEF is doing to encourage growth in leasing activity in Spain, the company’s CEO explains that it is working on further diversification of its business in industry, agriculture, transport and construction, having had a historical focus on vendor finance in the high-tech and medical markets.

“This implies the development of new partnerships with international vendors, but also with a wide network of national dealers as distribution partners,” explains Spurova.

“We pay particular attention to supporting our partners’ and clients’ green initiatives and to enhance their environmental and energy transitions and sustainable development.”

The company wants to provide its customers with best-in-class service, innovative solutions and flexibility and speed in order to support their sales, she concludes.

“Our philosophy is to deliver an excellent experience to our vendor partners. The aim is to become a sustainable partner that is always moving forward.”

NEAR-TERM CHALLENGESEven though the Spanish market has proven to be resilient in recent years, it is facing some near-term challenges that could affect confidence and investment, observes Alvaro Zafra Leal, AELR board member and Iberia general manager at DLL.

“We will have a general election in November – our fourth election in four years – and there are other macroeconomic uncertainties, whether Brexit or the escalation

of trade/tariff tensions between China and the US,” he says.

“All of these factors are creating headwinds that will slow the pace of growth in Spain. Most analyst reports that I have seen are forecasting growth of between 1.7% and 1.9% in 2020, which would be a step down from the 2.1-2.3% range that was predicted for this year.”

However, Zafra Leal also notes that during periods of economic slowdown, the appeal of leasing tends to increase, since direct purchasing and other financial solutions are seen as less appropriate and more risky.

When asked which sectors of the lease market are performing particularly well in Spain, he refers to above-average growth recorded in the industrial equipment and transportation sectors.

“The Spanish leasing market has experienced growth in excess of 10% this year,” Zafra Leal adds. “We have outperformed by improving our market share in key markets through growing our portfolio of vendors and dealers.”

Looking ahead, DLL is working on improving processes and digital facilities to boost customer interaction and increase

the ease and speed of doing business. “Additionally, we are exploring new channels as we think that finding new ways to bring leasing into the SMEs and dealers in Spain will be a win-win solution,” says Zafra Leal.

Although the leasing market in Spain is mature and has shown strong growth in the first few months of this year, he accepts that the uncertainty of the macroeconomic environment may yet affect the outlook for the sector.

“There is still room for growth within the Spanish leasing market, but we don’t expect similar growth as over the last 12 months.” <

we are exploring new channels. finding new ways to bring leasing into the SMEs and dealers in Spain will be a win-win solution

Jarmila Spurova, SGEF Alvaro Zafra Leal, DLL

LL November 314.indd 22 14/11/2019 17:03:01

PRIVATE BANKER


Private Banking and Wealth Management: Switzerland 2019 Conference and Awards

Swissôtel Zürich • 11 December 2019

The fourth annual Private Banking and Wealth Management Switzerland event will explore how the industry is adapting to market and technological shifts.

As the sector faces increasing pressure from non-traditional market entrants, squeezed margins and digital change, private banks and wealth managers must capitalise on the opportunities that disruption offers during this pivotal time.

Drawing on Verdict’s analysis and business intelligence, the event offers a unique arena to discover the trends and opportunities driving market growth.

A daytime conference will include targeted sessions, interactive debates and dedicated networking opportunities, followed by a black-tie gala awards dinner celebrating the best in private banking and wealth management in Switzerland.

We look forward to welcoming you.

To register now, or for more information, contact Carlo Mancini on [email protected] or call +44 (0)20 7832 3584

Gold Partner

Panel Host Partners

Silver Partners Bronze Partners

Media Partner

LL November 314.indd 23 14/11/2019 17:03:01


Leasing Life Conference & Awards 2019 Barcelona, Spain • 28 November 2019

For its 15th edition, the Leasing Life Conference and Awards 2019 moves to Barcelona, to bring together asset finance professionals and industry disruptors in an active discussion of the key

issues facing the leasing industry.

This year’s Leasing Life Conference explores how Europe’s leasing industry is responding to the value chain opportunity, the role of technology in this pinnacle transformation, strategy-driven

innovation and much more. Thriving in a digital age has never been more important.

Event highlights• Embracing technological transformation:

creating digitised business models• From new technologies to corporate

cultures: making innovation a reality• The circular economy: driving change at

full speed• CEOs panel discussion and Q&A: the future

of asset finance – a strategic outlook• Remaining relevant in an increasingly

competitive world• Panel discussion: capitalising on data to

drive industry-wide innovation

For more details please contact Ray Giddings on [email protected] or call +44 (0)20 3096 2585

Headline Partner

Exhibitors

Gold Partner

Cocktail PartnerPanel Partner

Silver Partners

Table Host

Bronze Partners

Badge and Lanyard Partner

LL November 314.indd 24 14/11/2019 17:03:02

gearing up - verdict.co.uk€¦ · gearing up ll november 314.indd 1 14/11/2019 17:01:57. 2 |...

Documents