How would you describe the current state of the equipment leasing industry in the UK?
There has definitely been a greater shift towards Leasing. We’re increasingly becoming a subscription based society – it’s the twenty-first century mind set - and businesses both large and small are recognising the benefits. It helps them have better control over their cash flow and liquidity, rather making large cash outlays to get the equipment they need to run their businesses. That’s critical at the moment with the tougher trading environment that we find ourselves in. The Leasing industry overall is expanding and there’s still a lot of potential for it to grow even more.
What are the key trends that are shaping the equipment leasing landscape in the UK?
I can think of three key things.
- Flexibility! Lots of equipment dealers are switching to a solutions based approach and are placing more and more importance on building a relationship with their customers. Leasing allows businesses to change and upgrade equipment more flexibly whilst managing cost.
- Sustainability. There’s also growing focus on sustainability and businesses want more efficient and up to date equipment to keep them competitive. Leasing gives them greater access to it when they need it.
- Digitalisation. The use of tech is critical because it’s needed to match the pace of change in the business world. And using tech means that sorting out a Lease tends to be far quicker than going to the bank. First and foremost, tech enables us to generate documentation more quickly which helps us to be very transparent in front of the customer.
What do you perceive to the hurdles to encouraging businesses to lease equipment?
We constantly talk to the equipment dealers that we work with, which helps us to keep our finger on the pulse. We know that there is a need for greater training amongst their sales teams so that they become better and more confident about selling equipment on a lease. It’s the “equipment as a service” model. So, I would say training and education are key areas that we are always working on.
Has compliance had an impact on Leasing?
Yes definitely. Over the last few years, the impact of greater regulation has had an effect on the Leasing industry. Leasing companies have to adhere to numerous laws and standards ranging from “Know Your Customer” (KYC) checks, to data protection, consumer rights and financial regulations. We have robust internal policies and procedures aligned with regulatory requirements. We also have regular training programmes so that our team is always fully up to date about compliance obligations and best practice.
How have the necessary “Know Your Customer” (KYC) checks helped you address risk in your day to day operations?
Like every business we have to manage risk and identifying high-risk lessees is very important to Leasing companies. So as well as these checks being a legal requirement, they help us to identify and of course avoid poor deals where we may lose money. By requiring Leasing companies to collect and maintain accurate records about their customers, the industry has become more transparent and accountable, which also ultimately helps prevent financial crimes. And this will create a much more stable and secure financial system for UK businesses.
Looking ahead, how do you envision the future of the equipment industry, particularly regarding compliance?
Compliance will continue to be a critical aspect of the equipment Leasing industry. And, we’re always facing new challenges. Therefore, we have to prioritise compliance procedures but in a practical way, that doesn’t slow down the pace of business. Tech helps as well as and it’s important to embed it into our daily operations and company culture. Ultimately, by proactively staying on top of compliance and regulation we’ll have a stronger and more sustainable Leasing solution.
GRENKE encourages businesses to consider Leasing as a vital means to upgrade equipment whilst maintaining liquidity. GRENKE additionally aims to provide financial flexibility to businesses so that they have access to equipment when it is needed, whilst managing cash flow effectively. If you’re an equipment reseller and you would like to explore how GRENKE can help you and your business, please get in touch.
