The Chancellor delivered his Autumn Statement on 22 November against a background of recently released economic data.

Figures released by The Office for National Statistics in the days leading up to the Autumn Statement confirmed that we have experienced a subdued level of activity within the UK economy. Whilst there has been some volatility in monthly figures, caused, amongst other things, by some long-running industrial disputes, the overall picture is one of little or no growth over the past twelve months.

Tackling high inflation has been a priority for all developed economies over the past few years. A combination of successive Bank of England Base Rate increases and significantly lower gas and electricity (from October 2022) has reduced the headline UK inflation rate, as measured by the Consumer Price Index from something over 10% at the start of the year to 4.6% in figures released for October. The Bank of England inflation target is 2%, so although the latest data shows a significant move in the right direction and has allowed an end to a long period of interest rates being raised on a monthly basis, there is little immediate prospect of interest rates being reduced in a meaningful way.

It should always be remembered that the point of raising interest rates to reduce inflation is to slow down economic activity. This works by making borrowing more expensive and encouraging saving, so whilst continuing to control inflation remains a priority, the Chancellor has had to be careful about announcing policies that would increase economic activity through higher consumer spending (e.g. large tax cuts).

The second factor that needed consideration when drafting the Autumn Statement was the degree to which public finances allowed for either tax cuts or increased public spending. The freezing of personal tax allowances during a period of high inflation and fast wage growth ensured that tax revenues were higher in the period April to September 2023 than expected.  The effect of this additional tax revenue has caused government borrowing to be significantly lower than forecast by the Office for Budget Responsibility, the official forecaster, for the first six months of the financial year. Therefore, not withstanding the effect on inflation, it could be argued that, in the short term there was scope to either cut taxes or increase public spending. In the longer term however, the effect of continuing high inflation and the associated rise in government bond yields will increase the government’s debt interest bill. Therefore any loosening of fiscal policy now risks being reversed in the not-too-distant future, unless the rate of inflation reduces faster than many analysts predict.

A third factor is political, there is temptation for a government facing an election within the next year or so to simply disregard some of the economic considerations in pursuit of short-term popularity.

Much will have been written about the measures taken in respect of changes affecting personal taxation and allowances. The Chancellor explained that one of the main reasons for the low rate of economic growth in the UK has been a prolonged period of under-investment by businesses with an associated lack of growth in productivity. It is virtually impossible for a modern economy to grow in a sustainable way without productivity gains. It was therefore entirely sensible that some measures were taken to encourage businesses to accelerate their rate of investment in new capital equipment.

The Chancellor announced that there were 110 measures included within the statement that would improve business investment. The money, scope and time-scales involved were varied, but some were of more general significance than others.

There was a demand by many in the business community that a tax allowance known as full-expensing was made permanent. When the measure was introduced in March 2023 it was as a temporary arrangement with an expiry date of 31 March 2026. Full expensing allows the full cost of a qualifying asset to be claimed as a capital allowance in the year the asset is purchased, it is available to limited companies as an allowance against Corporation Tax and applies only to new equipment that is not subject to hiring out to third parties. Whilst the allowance is currently available, many in the business world made the point that investment decisions were often taken some years in advance. Therefore, the removal of the allowance in 2026 limited the degree to which it would prove an effective incentive in accelerating the acquisition of new capital equipment.

In response to this demand, the Chancellor announced that full-expensing will now become a permanent allowance. Hire purchase agreements qualify for this allowance in the same way as outright purchase. This remains a particularly attractive means of acquisition because the full capital allowance is available before full payment for the equipment has been made. Further, it is worth remembering that any interest payments within a hire purchase agreement can also be claimed against tax as a business expense.

Whilst the full-expensing initiative was presented as being the most significant measure, the Chancellor claimed that all measures announced within the statement would add £20bn to capital equipment investment a year, within ten years.

Andy Milsom, Head of Partner Training & Development at BNP Paribas Leasing Solutions

Andy is an experienced sales and finance professional with over 25 years’ experience in sales aid leasing. Andy is widely recognised as an expert in business finance and has in recent years focused his attention on developing partner sales teams develop an understanding of how businesses secure project financing. His training programme – Finance Unlocked – is a highly rated customisable course and is offered at no cost to partners.

If you’re interested in helping your sales team overcome finance-related hurdles during the selling cycle, please get in touch with Andy on 07966 114 243 or email here.

Anyone involved in finance, which in one form or another is most of us, will be aware that the cost of borrowing money has increased significantly over recent months. This has affected mortgages, business bank loans, and the cost of a lease or hire purchase agreements alike.

The starting point for this rise in the cost of borrowing is action taken by central banks in the UK, EU, and USA, to increase their bank base rates and reduce inflation. This is a blunt instrument but the tried and tested policy to slow economic activity by reducing the circulation of money in the economy, this happens in two ways:

• Increasing the cost of borrowing money should reduce demand for all types of credit (e.g. loans and leases).
• Higher interest rates increase the incentive on the part of businesses and consumers to save rather than spend, because they get higher returns on their savings, again reducing demand for goods and services.

From a leasing perspective, changes in the Bank of England base rate and more importantly the market expectation of future interest rate changes will dictate the pricing of deals currently being negotiated. To avoid risks associated with changes in interest rates during the life of finance agreements, most leasing companies fix their cost of borrowing for terms covering the length of their agreements.

These arrangements are known as swaps, these occur when two parties swap interest rate payments with each other. One party (e.g. the leasing company) agrees to provide a fixed-rate payment, while the other takes the risk of paying variable interest payments over the periods involved. In other words, it is what leasing companies pay to financial institutions to acquire fixed funding for a set period. Deals are normally struck by way of ‘block funding’ over several terms (e.g. one to six years) designed to cover the period over which leasing agreements are offered.

Swap rates are based on what the markets think interest rates will be in the future. If they rise, then leasing companies will increase their pricing to maintain an acceptable profit margin. The big question facing such companies is how far ahead to purchase blocks of money at a fixed rate. The safest option is to negotiate swap rates monthly, but in a period of interest rate volatility, this might necessitate frequent changes in leasing prices with limited opportunity to hold prices after quotes have been provided. By negotiating swap rates on blocks of money for several months in advance, it is possible to hold prices for longer but with a risk that by the time deals have been finalised there might have been a reduction in swap rates and therefore an opportunity to offer more competitive leasing prices will have been lost.

It is worth adding that factors other than the cost of money (e.g. bad debt provisions) will influence the price of a lease or loan. It is undoubtedly the case that the long period of rising interest rates we have experienced, coupled with a high degree of volatility caused by considerable economic uncertainty, has created challenging conditions for all of us but particularly for those involved in setting the cost of credit.

Disclaimer
BNP Paribas Leasing Solutions is not authorised to provide tax advice. You should consult an accountant in order to understand the tax consequences of any investment decision.

Andy Milsom, Head of Partner Training & Development at BNP Paribas Leasing Solutions

Andy is an experienced sales and finance professional with over 25 years’ experience in sales aid leasing. Andy is widely recognised as an expert in business finance and has in recent years focused his attention on developing partner sales teams develop an understanding of how businesses secure project financing. His training programme – Finance Unlocked – is a highly rated customisable course and is offered at no cost to partners.

If you’re interested in helping your sales team overcome finance-related hurdles during the selling cycle, please get in touch with Andy on 07966 114 243 or email here.

We work hard across the organisation to create a diverse and inclusive place to work. We encourage all of our people to be themselves at work. We also firmly believe that it is our differences that make us stronger, whether that’s a broad range of individual strengths, different backgrounds or ways of thinking. It’s that huge variety of input which enable us to challenge each other to grow and develop every aspect of our business but most importantly to ensure we have a motivated and engaged team who can achieve their full potential and delight our customers every single day.

As we’ve worked together to prepare the data for this year’s gender pay gap, our 6^th submission, we’ve reflected long and hard on the actions we’ve taken to date and our future plans, I feel confident that we’re making good progress. During the last 12 months we have improved the gender balance within our leadership team and women now represent in excess of a third of our senior leaders.  We’ve also increased the proportion of women on the UK ExCo to 42%. The pipeline of female candidates across the business is strong and indeed more than 53% of our total workforce are women.

The future does look bright but we remain hugely committed to ensuring the actions we take are meaningful, add value and make a lasting difference.

I’m proud of our whole team, all of whom embrace the topics of diversity and inclusion without question, and am very much looking forward to continuing to address the gender imbalance whilst building a positive culture.

– Rachel Appleton, CEO BNP Paribas Leasing Solutions UK

Results

WHat do we know about our gap?

A gender pay gap is a measure of the difference between the average earnings of men and women (irrespective of roles or seniority). This differs to ‘Equal Pay’, which is our obligation as an employer to give men and women equal pay for equal work.

Our gender pay gap is not a result of equal pay issues, we have a gender-neutral approach to pay across all levels of the organisation, we regularly benchmark, audit and monitor this to ensure a fair approach.

BNP Paribas Leasing solutions UK Gender pay gap

We understand why we have a gender pay gap. The key drivers both across the financial services industry, and, here at BNP Leasing Solutions is due to low female representation in sales and senior leadership roles, which, relative to other positions, attract higher rates of pay. As we work to address gender balance we are seeing more women enter trainee roles to develop the pipeline for the future, which in the short to medium term can see the gap increase. This is evident in the 2022 figures.

Gender bonus gap

We have seen a significant improvement in our median gender bonus gap, partly due to some hierarchical changes to a handful of male roles but also impacted by an increase in women at board level. We also see a reduction overall in the number of employees who received a bonus during 2022, this was primarily due to a higher than normal % of new joiners who were not eligible for a bonus payment during the period.

All of our people receive an annual bonus based on two key criteria – eligibility on joining and provided they are not working their notice period at the time of bonus payment. Any variation in 100% payment for either men or women is therefore related to new joiners or leavers. Overall, we have a significantly higher mean bonus gap than hourly pay gap. This is because our bonus gap is a function of greater variable pay at more senior levels in stereotypically male roles (e.g. Sales) which attract higher rates of bonus. A key element of our action plan relates to developing women into these roles.

In addition to this circa 12% of our workforce work part-time. 100% of our part time workers are women. The calculations do not take account of pro-rated bonus payments for these part-time workers. Although the part-time working pattern has a negative impact on bonus gap figures, we remain determined to support flexible working and family friendly practices.

Population by quartile

Pay quartiles are calculated by ranking the hourly pay of all staff, then splitting the range into four equal quartiles and calculating the proportion of men and women in each quartile.

The higher proportion of men in the upper quartiles reflects the fact that there are more men than women in senior and sales positions attracting higher rates of pay.

We can see the upper quartile is moving in the right direction but we are aiming for a 50/50 position of male and females within this population so we still have a way to go.

WHAT WE ARE DOING TO ADDRESS THE GENDER PAY GAP

At Leasing Solutions UK we truly believe that a diverse team is a vital part of our future success. We are really proud of the diverse and inclusive working environment we have already but we are committed to pushing ourselves to developing this further.

Representation of women in sales and certain senior roles remains a challenge for our industry and although it will take time, the collective and sustained efforts from our Senior Leadership Team to address this gives me confidence that female representation across all areas of our organisation will continue to improve.

As we make good progress with gender diversity within our leadership team, we are looking further into how we can attract, retain and develop talented females into traditionally male dominated roles.  We aim to have at least one female candidate on every shortlist and we continue to build our talent pool which is more than 60% women.

We know that change can not be delivered overnight but we will remain focused and strong in our action plans to ensure our workforce is balanced, representative of the communities we work within and progress on our gender pay gap continues to be made.

BNP paribas Leasing solutions UK ACTION PLAN

The Spring Budget, on 15th March 2023, confirmed the removal of the temporary super-deduction capital allowance, and replaced it with a new temporary allowance known as ‘full expensing’. Like super-deduction, the full tax allowance for qualifying expenditure can apply for the year in which the assets are purchased. However, unlike super-deduction, the allowance will apply to the actual cost of the asset rather than the cost inflated by 30%. It should be noted that the size of the allowance in cash terms will be broadly the same under both schemes for companies facing a corporation tax increase from 19% to 25% on 1^st April.

The measure will temporarily increase the relief available for capital expenditure on plant and machinery in the year the expenditure is incurred. For qualifying expenditure incurred on or after 1 April 2023 but before 1 April 2026, companies can claim:

• A 100% first-year allowance for main rate expenditure – known as full expensing

• A 50% first-year allowance for special rate expenditure.

It should be noted that full expensing is available only to companies subject to corporation tax acquiring new equipment.

Plant and machinery that may qualify for full expensing includes (but is not limited to):

•  Machines such as computers, printers, lathes and planers.
•  Office equipment such as desks and chairs.
•  Vehicles such as vans, lorries and tractors (but not cars).
•  Warehousing equipment such as forklift trucks, pallet trucks, shelving and stackers.
•  Tools such as ladders and drills.
•  Construction equipment such as excavators, compactors, and bulldozers.
•  Some fixtures such as kitchen and bathroom fittings, and fire alarm systems in non-residential property.

For “special rate” expenditure, that doesn’t qualify for full expensing, a 50% first-year allowance (FYA) can be claimed instead. The 50% FYA was introduced alongside the super-deduction and was due to end on 31 March 2023. It will now be extended by three years to 31 March 2026.

Businesses can also continue to use the Annual Investment Allowance (AIA) to claim a 100% tax deduction on qualifying expenditure on plant and machinery of up to £1m per year. This includes unincorporated businesses and most partnerships.

Qualifying equipment acquired via hire purchase agreements are subject to any capital allowance that would apply with outright purchase, together with tax relief (charged as a business expense) on the interest element of any such agreement. Equipment acquired using other types of leasing agreement are not subject to capital allowances but all rental payments made in respect of such agreements can be offset against tax in the year that the payments were made.

Disclaimer
BNP Paribas Leasing Solutions is not authorised to provide tax advice. You should consult an accountant in order to understand the tax consequences of any investment decision.

Andy Milsom, Head of Partner Training & Development at BNP Paribas Leasing Solutions

Andy is an experienced sales and finance professional with over 25 years’ experience in sales aid leasing. Andy is widely recognised as an expert in business finance and has in recent years focused his attention on developing partner sales teams develop an understanding of how businesses secure project financing. His training programme – Finance Unlocked – is a highly rated customisable course and is offered at no cost to partners.

If you’re interested in helping your sales team overcome finance-related hurdles during the selling cycle, please get in touch with Andy on 07966 114 243 or email here.

The Budget presented by Chancellor Jeremy Hunt on 15th March 2023 followed two Government financial statements that to a large extent contradicted each other in the autumn of last year. The first of these was delivered by Kwasi Kwarteng, the then chancellor, on 23rd September 2022. This involved large unfunded tax cuts, which resulted in a massive adverse market reaction, including steep increases in borrowing costs and the near collapse of UK pension funds.

The second statement was delivered by the current chancellor, Jeremy Hunt, on 17th November 2022 and had the main objective of restoring market confidence in the UK Economy. To achieve this objective, it was deemed necessary to reverse nearly all taxes reduced in the previous statement. The measures announced included confirmation of an increase in the rate of Corporation Tax on 1st April 2023 from 19% to 25% on profits above £250,000¹.

There was also an announcement of a reduction in some business-related tax allowances, including those applying to capital gains tax. One of the very few measures announced last autumn that provided some positives for businesses was that the Annual Investment Allowance, for the purchase of capital equipment, was to be maintained at £1,000,000 on a permanent basis.

The Budget on 15th March 2023 was delivered in less frenetic circumstances, than that applied in November 2022, and indeed the Office for Budget Responsibility is now forecasting that the UK will avoid recession in 2023 and grow by 1.8% and 2.5% in the next two years².

This budget therefore offered an opportunity to introduce some business-friendly tax measures. Data supplied by the Office For National Statistics (ONS), at their Economic Forum a few days before the budget, and confirmed by the Office for Budget Responsibility, in the chancellor’s statement, indicated that things did not appear to be as bad as forecasted in the bleak days of autumn 2022. The chancellor identified the following as being a summary of key factors, currently applying to the UK economy:-

·       Public sector borrowing is now lower than expected this financial year, giving the chancellor some headroom for limited higher public spending or tax cuts.

·       The UK economy has seen no growth over the last 3 months or year, but it appears to have avoided the recession that was forecast in the last six months of 2022.

·       Business challenges have eased somewhat over the last six months with corporate profits largely holding steady.

·       Global food and energy price pressures have eased in 2023, but cost of living pressures remain elevated.

·       UK investment remains low by both historical and international standards.

The planned removal of the highly attractive Super-Deduction capital allowance on 1st April 2023 has obviously not been helpful in addressing the low level of business investment, identified by the ONS and others. In response to the challenges faced the Chancellor announced the following measures in a “budget for growth”: –

1.       A ‘full expensing’ policy introduced from 1 April 2023 until 31 March 2026 and an extension to the 50% first-year allowance in the same period – a transformation in capital allowances worth £27 billion to businesses over three years.³

2.       The formation of 12 investment zones within the UK that would attract £80m of government support.³

3.       Several regeneration schemes to help support the ‘levelling up’ agenda.³

4.       A large fund for transportation infrastructure improvement schemes.³

5.       Tax incentives to encourage investment in life sciences and creative industries.³

6.       Tax ‘breaks’ for research and development. ³

A second brake on economic growth was identified as labour shortages and measures were announced to encourage parents to return to work through enhanced child-care schemes as well as early retirees through significant increases in the tax free amounts that can be paid into pension funds.

Budget statements have a habit of only being fully understood in the days that follow the headline announcements and this one will be no exception, particularly when it comes to tax allowances relating to business investment.

Disclaimer
BNP Paribas Leasing Solutions is not authorised to provide tax advice. You should consult an accountant in order to understand the tax consequences of any investment decision.

¹ Main rate of corporation tax, paid by businesses on taxable profits over £250,000, confirmed to increase from 19% to 25% https://www.bbc.com/news/business-64789405

² Quoted by the BBC as ‘growth of 1.8% for 2024 and 2.5% in 2025 https://www.bbc.com/news/business-64789405

³ https://www.gov.uk/government/news/chancellor-unveils-a-budget-for-growth

Andy Milsom, Head of Partner Training & Development at BNP Paribas Leasing Solutions

Andy is an experienced sales and finance professional with over 25 years’ experience in sales aid leasing. Andy is widely recognised as an expert in business finance and has in recent years focused his attention on developing partner sales teams develop an understanding of how businesses secure project financing. His training programme – Finance Unlocked – is a highly rated customisable course and is offered at no cost to partners.

If you’re interested in helping your sales team overcome finance-related hurdles during the selling cycle, please get in touch with Andy on 07966 114 243 or email here.

BNP Paribas Leasing Solutions UK today announces its strategic partnership with Hitachi Construction Machinery UK (HCM UK) Ltd, a market leader in the supply of excavators, wheel loaders, parts and servicing across the UK and Ireland.

Under the agreement, BNP Paribas Leasing Solutions UK will be the exclusive partner for the provision of finance for HCM UK equipment in the UK and Republic of Ireland, under the brand name of ZAXIS Finance.

Reflecting their long-standing commitment to the construction industry, with a presence in the UK for more than 50 years, this partnership highlights Leasing Solutions’ drive to provide innovative solutions and consistent funding which support the continued evolution of the sector.

Rachel Appleton, CEO, Leasing Solutions UK & ROI comments:

The stability, consistency and breadth of expertise we can offer as part of a leading long-established global brand will enable those in the construction sector to access the high-quality equipment that HCM UK delivers. This strategic partnership with Hitachi Construction Machinery UK, under the ZAXIS Finance brand, consolidates BNP Paribas Leasing Solutions UK’s position as a committed and trusted funder to the UK and ROI construction industry.”

Mark Richards, Equipment Logistic and Solutions General Manager at Leasing Solutions UK & ROI adds:

We are excited to work in partnership with HCM UK to support their customers with access to financing solutions for all their Hitachi equipment needs, coupled with our market-leading service provision.  By welcoming a number of the experienced ZAXIS Finance team to Leasing Solutions, customers will benefit from consistency of service and continuity of established relationships, plus the added pedigree of Leasing Solutions in delivering long term vendor finance partner programs. Putting the customer first is at the core of our business ethos and we are excited to develop long-standing and positive relationships that endure through ever-changing economic cycles.”

David Roberts, CEO at Hitachi Construction Machinery (UK) Ltd comments:

More so than ever, finance is a key element of our value proposition and so it is critical that our offering in this regard aligns with all of our products and services. We know that working in partnership with BNP Paribas Leasing Solutions UK will ensure that both our existing, and new customers, will get a flexible, reliable and responsive service when it comes to their financing needs.”

Mark Turnham, National Sales & Marketing Director at Hitachi Construction Machinery (UK) Ltd added:

HCM UK went out to the market to find a finance partner that held the same values as HCM UK in terms of customer focus and service levels, I am delighted that we found such a partner in BNP Paribas Leasing Solutions UK.

BNP Paribas Leasing Solutions UK has appointed a team with many years of experience within the construction industry and who share the same passion and drive for the Hitachi construction machinery product as we do, allowing us to offer even higher levels of customer service than before.”

About BNP Paribas Leasing Solutions

As part of the BNP Paribas Group, BNP Paribas Leasing Solutions, the European leader in asset finance, specialises in leasing and rental solutions for professional equipment, offered either directly to businesses or through its partners and their distribution channels.

At the heart of the usage economy, we provide businesses with the flexibility they need to remain competitive and grow in a sustainable way.

BNP Paribas Leasing Solutions UK offers an innovative suite of products designed through years of experience, enabling us to provide leasing expertise, solutions and support across a number of different markets. As a trusted funder with a strong pedigree and a passion for building lasting and mutual relationships, we work to help partners increase their competitive edge.

About Hitachi Construction Machinery

Hitachi Construction Machinery (UK) is a leading name in the construction equipment market, servicing the UK and Irish construction industry with national coverage from its 14 depots and appointed sub-dealer in Ireland.

More information can be found at: https://www.hitachicm.co.uk/about-us/

For further information, please contact: 

Rebecca Rabbitts, Head of Marketing
Tel: +44 (0)7584 336489
E-Mail: rebecca.rabbitts@uk.bnpparibas.com

The Finance world is full of acronyms and complex phrases. To those of us working within the leasing industry, these terms are a normality, however, to new partners and customers there are many unfamiliar terms to get to grips with. We’re passionate about sharing our leasing knowledge to ensure that your sales team have the confidence they need to deliver equipment finance to your customers.

We want to help demystify as many of these phrases as possible. So, we’ve put together a glossary of a few commonly used leasing terms to help our partners tackle any questions they may have about leasing agreements. We hope you find it helpful.

Add-Ons – Equipment and software added to an original installation. This can be supplied via a new leasing agreement or modifications to an existing Master Lease Agreement (schedules).

Annual Service fee – A fee charged on the anniversary of the lease start date by a lessor for lease administration.

Annuity – A facility which allows a funder to pay ‘up front’ for a managed service contract, whilst allowing the user to pay the funder in instalments over the term of the contract. This is particularly useful where a managed service provider offers a sizeable discount for full contract payment at the outset, but, on the basis of cash flow, such an arrangement is not attractive to the user.

Assignment Of Receivables – A facility by which a managed service provider assigns payments due under their contract to a funder in return for receiving an ‘up front’ payment for most of the amount due within the contract. Such an agreement can be ‘disclosed’ where payments are collected by the funder or ‘non disclosed’ where payments are collected by the service provider who then makes payments to the funder.

Co-terminus – When equipment has been added to a lease and the additional rentals have been calculated so that any subsequent agreement ends at the same time as the original contract.

Contract Hire Agreement – A lease which allows additional services such as maintenance to be included within a leasing agreement.

Credit Agreement – A leasing agreement under which the lessee is able to take title to the asset being financed once all payments due under the agreement have been made. (Hire Purchase).

Document Fee – A fee collected at the start of a leasing agreement by a finance company, to cover set-up costs.

Early Termination Fee –  If the lessee wants to exit from a lease before the end of its primary (i.e. non-cancellable) term, the lessor may agree a termination sum based on the remaining unpaid rentals. 

Equipment Schedule –  A document referenced in the lease agreement that describes in detail the assets being leased.

Funder – The leasing company, otherwise known as the ‘lessor’.

Hire Agreement – A leasing agreement under which the lessee is not able to take title to the asset being financed (Finance Lease, Operating Lease, Contract Hire).

Hire Purchase –  A credit agreement, sometimes referred to as lease purchase, is a conditional sales contract in the guise of a lease.  The lessee is, or will become, the owner of the leased equipment by the end of the lease term. The lessee is treated as the owner of the asset for tax purposes (and is entitled to the tax benefits of ownership, such as capital allowances). The lessee does not become the legal owner of the asset until all terms and conditions of the agreement have been satisfied.

Lease – A finance agreement which allows a lessee to use an asset for a fixed period of time in return for periodic payments. Ownership of the asset lies with the lessor during the period of hire.

Lessee – The hirer of equipment subject to a leasing agreement.

Lessor – See ‘funder’.

Managed Service Agreement – A finance agreement which allows a comprehensive range of equipment, software, services and maintenance supplied under contract to be included within a regular payment schedule. Undelivered services cannot normally be included within a standard leasing agreement and as such a loan or an ‘Assignment of Receivables’ are the vehicles by which funding can be provided.

Master Lease agreement – A lease agreement that contains all the main provisions governing leasing between two parties. It doesn’t refer to specific assets or financial terms, which are captured in separate lease contracts (schedules) that are subject to the terms in the master lease agreement.

Milestone Payments – A facility, under a leasing agreement, which allows suppliers to be paid for services and equipment during the implementation phase of an ERP or CRM project and ahead of full rental payments for the project being made by the lessee.

Operating Lease – A hire agreement that also meets certain criteria established by the relevant accounting rule-making body (UKGAAP, IFRS). Under certain accountancy rules such a lease need not be shown on the balance sheet of the lessee. To qualify as an operating lease the lessor usually has taken a significant residual position in the lease pricing and so must salvage the equipment for a certain value at the end of the lease term to earn its rate of return.

Payment Profile – Often used to describe the number and frequency of rental payments involved in a leasing agreement e.g- a five year agreement involving 20 quarterly payments is commonly referred to as ‘1+19’ where ‘1’ represents a single initial quarterly payment.

Put Option Price – The price the supplier of equipment might be offered by the finance company to re-purchase the equipment upon termination of the agreement.

Regulated Agreement – A leasing agreement subject to regulation under the UK Consumer Credit Act.

Residual Value – A sum of money expected to be raised by the sale of an asset upon expiry of a leasing agreement. Recovery of a residual value by a lessor is normally an essential requirement for operating leases.

Schedules – Documentation that allows equipment to be supplied under the terms of a Master Lease Agreement. This facility is particularly useful where there is a need for repeated ‘add ons’ to equipment originally supplied.

Upgrade – Normally defined as the method by which equipment can be replaced before a leasing agreement expires. This arrangement is facilitated by allowing any sum required to settle the original agreement to be re-financed within the new agreement for replacement equipment.

Andy Milsom, Head of Partner Training & Development at BNP Paribas Leasing Solutions

Andy is an experienced sales and finance professional with over 25 years’ experience in sales aid leasing. Andy is widely recognised as an expert in business finance and has in recent years focused his attention on developing partner sales teams develop an understanding of how businesses secure project financing. His training programme – Finance Unlocked – is a highly rated customisable course and is offered at no cost to partners.

If you’re interested in helping your sales team overcome finance-related hurdles during the selling cycle, please get in touch with Andy on 07966 114 243 or email here.

We are committed to your business growth.

Our competitive finance solutions can help you capitalise on new opportunities. Contact us today to discuss your needs with a member of our team.

We work hard here at Leasing Solutions to create a diverse and inclusive place to work. We encourage all of our people to be themselves at work. We firmly believe that it is our differences that make us stronger, whether that’s a broad range of individual strengths, different backgrounds or ways of thinking. It’s that huge variety of input which enables us to challenge each other to grow and develop every aspect of our business, but most importantly to ensure we have a motivated and engaged team who can achieve their full potential and delight our customers every single day.

As we’ve worked together to prepare the data for this year’s gender pay gap, our 4th submission, we’ve reflected long and hard on the actions we’ve taken to date and our future plans. I feel confident that we’re making good progress. During the last 12 months we have improved the gender balance within our leadership team. Women now represent in excess of a third of our senior leaders. We’ve also increased the proportion of women on the UK ExCo to 42%. The pipeline of female candidates across the business is strong and indeed more than 53% of our total workforce are women.

The future looks bright but we remain hugely committed to ensuring the actions we take are meaningful, add value and make a lasting difference.
I’m proud of our whole team, all of whom embrace the topics of diversity and inclusion without question, and am very much looking forward to continuing to address the gender imbalance whilst building a positive culture.

– Rachel Appleton, CEO BNP Paribas Leasing Solutions UK

Results

WHat do we know about our gap?

A gender pay gap is a measure of the difference between the average earnings of men and women (irrespective of roles or seniority). This differs to ‘Equal Pay’, which is our obligation as an employer to give men and women equal pay for equal work.

Our gender pay gap is not a result of equal pay issues, we have a gender-neutral approach to pay across all levels of the organisation, we regularly benchmark, audit and monitor this to ensure a fair approach.

BNP Paribas Leasing solutions UK Gender pay gap

We understand why we have a gender pay gap. The key drivers both across the financial services industry, and, here at BNP Leasing Solutions is due to low female representation in sales and senior leadership roles, which, relative to other positions, attract higher rates of pay. As we work to address gender balance we are seeing more women enter trainee roles to develop the pipeline for the future, which in the short to medium term can see the gap increase. This is evident in the 2021 figures.

Gender bonus gap

We have seen a deterioration in 2021 in our gender bonus gap, again this is primarily driven by a skilled and experienced predominantly male sales team.

All of our people receive an annual bonus based on two key criteria – eligibility on joining and provided they are not working their notice period at the time of bonus payment. Any variation in 100% payment for either men or women is therefore related to new joiners or leavers. Overall, we have a significantly higher mean bonus gap than hourly pay gap. This is because:

Our bonus gap is a function of greater variable pay at more senior levels (primarily occupied by men), although it is also impacted by the bonus calculation. This does not take into account bonuses for part-time workers (who are mainly women) being pro-rated. Although the part-time working pattern has a negative impact on bonus gap figures, we remain determined to support flexible working.

Population by quartile

Pay quartiles are calculated by ranking the hourly pay of all staff, then splitting the range into four equal quartiles and calculating the proportion of men and women in each quartile.

The higher proportion of men in the upper quartiles reflects the fact that there are more men than women in senior and sales positions attracting higher rates of pay.

WHAT WE ARE DOING TO ADDRESS THE GENDER PAY GAP

At Leasing Solutions UK we truly believe that a diverse team is a vital part of our future success. We are really proud of the diverse and inclusive working environment we have already but we are committed to pushing ourselves to developing this further.

Since the pandemic, we have experienced a seismic shift in the approach to flexible working. We are excited by this as the opportunities it brings are potentially greater for women. Remote working helps us travel less, both nationally and internationally, and facilitates a more flexible approach to the working day, better enabling women to make different decisions about their career choices.

Representation of women in leadership and senior roles has been a challenge for our industry and although it will take time, the collective and sustained efforts from our Senior Leadership Team to address this gives me confidence the barriers to women’s progression can be overcome. 

Since the summer of 2021 we have increased the % of women on our executive committee from 33% to 42% including our new female CEO. We aim to have at least one female candidate on every shortlist and have a strong gender balance within our current talent pool which is 60% women.

In our most recent people survey, 87% of our team say we are in inclusive and diverse workforce.  That’s great to hear but we can do more, and we will remain focused on the gender pay gap topic until it is closed.

BNP paribas Leasing solutions UK ACTION PLAN

The gender pay gap is not caused by unequal pay for men and women in the same levels and roles. It is as a result of there being a greater proportion of men in more senior roles, and in roles that typically attract higher rates of pay (e.g. sales). Women make up a larger percentage of the lower to upper-mid quartile roles. It is when you get to the upper quartile that the percentage of women decreases.

In response to this, our gender equality strategy focuses on three core areas: recruitment, career development and organisational culture. Across these three areas we run a number of initiatives, designed to encourage and support the cultural, and organisational, change needed for gender equality.

Examples of actions we’re taking to close the gap:

Despite widespread supply chain disruption due to the pandemic, registrations of agricultural tractors in Europe in 2021 were up 17% on 2020.  Nearly 230,000 tractors were registered across Europe in the full year 2021, the highest level for nearly a decade¹.

These are the findings in a recently-published release by CEMA, the European Agricultural Machinery Association.

In the UK, the year was a story of two halves, with an increase of 25% in the number of tractor registrations in the first six months, compared with same period in 2020. However, supply issues took their toll in the second half of 2021, with registrations only marginally higher than in 2020 and 2% below average.

Overall registrations for the year were on a par with better performing recent years – but this total could have been substantially higher without the significant supply chain issues.

CEMA notes

“It was a similar story for other types of farm equipment, with the value of orders for non-mobile machinery up 17% on 2020 but completed sales only 3% higher. The backlog of orders waiting to be delivered at the end of the year was 40% larger than a year before, having also risen at a similar rate during 2020.”

John Bolton, Head of Food & Agriculture at BNP Paribas Leasing Solutions, comments:

“The release echoes our findings – orders for tractors and agricultural equipment remain very strong but production delays are having a significant impact on delivery times. With these issues set to continue, buyers will need to think further ahead when considering their purchasing plans.”

“In addition to order backlogs, the industry is also contending with spiralling production costs. Despite these challenging conditions, demand remains buoyant and we continue to work closely with our manufacturer, dealer and broker partners to support them in delivering proactive finance solutions which help drive the industry forward.”

To read the CEMA release click here

With a sustained presence in the UK agricultural industry spanning nearly 50 years, we are proud of our deep roots and a strong heritage. Our team are looking forward to catching up with established valued partners and meeting new contacts at a number of upcoming shows including:

LAMMA 2022 4-5 May

Cereals 2022 8-9 June

Royal Highland Show 23-26 June

If you’re attending a show, please get in touch with your Account Manager or contact John Bolton john.bolton@uk.bnpparibas.com to arrange a catch up.

¹Report published by CEMA. 22^nd March 2022. For full report please see 2022-03-21-CEMA_Economic_Press_Release_Tractor_Registrations_2021.pdf (cema-agri.org). The total number of registrations may include other types of vehicles which are sometimes classified as tractors, such as quad bikes, side-by-sides, telehandlers or other equipment. Additionally, for certain countries it can include some second-hand registrations.

We are committed to your business growth.

Our competitive finance solutions can help you capitalise on new opportunities. Contact us today to discuss your needs with a member of our team.

Andy Milsom, Head of Partner Training & Development at BNP Paribas Leasing Solutions

Andy is an experienced sales and finance professional with over 25 years’ experience in sales aid leasing. Andy is widely recognised as an expert in business finance and has in recent years focused his attention on developing partner sales teams develop an understanding of how businesses secure project financing. His training programme – Finance Unlocked – is a highly rated customisable course and is offered at no cost to partners.

If you’re interested in helping your sales team overcome finance-related hurdles during the selling cycle, please get in touch with Andy on 07966 114 243 or email here.