Healthcare Archives - BNP Paribas Leasing Solutions UK

In 2024, the asset finance industry is set to continue its growth trajectory, building upon its remarkable achievement of £38 billion in new business [1] last year. This represents an impressive growth rate of 11% in 2023 [2], a testament to the sector’s resilience and adaptability amid challenges such as high interest rates, inflationary pressures, and geopolitical tensions. The recent announcement of the UK recession means that leasing can provide flexibility for businesses to manage their resources, in order to access critical equipment. Looking ahead, the prospects for 2024 are promising. Factors like the potential decrease in inflation, stabilisation of interest rates, and the establishment of full expensing as a permanent tax allowance create an ideal environment for businesses to increasingly embrace leasing. We are proud to be at the forefront of driving growth and innovation in various sectors, enabling our partners to harness the benefits of leasing. This article will delve into the key growth areas within the asset finance industry, specifically focusing on green technologies, commercial vehicles, and the healthcare sector, to provide you with the insight you need to strategically navigate the year ahead.

Harnessing The Green RevoLution

The UK Government’s commitment to achieving Net Zero by 2050 is poised to usher in an era of substantial advancements throughout 2024. From energy supply to agriculture, construction, offices, and transport, the UK anticipates a significant surge in growth across its commercial and industrial landscapes, all aligned with the objective of fulfilling this ambitious goal. 

As we progress towards a Net Zero Carbon future, the needs and expectations of industries will change, posing considerable growth opportunities that can be supported through leasing. In fact, green technology industries are growing four times faster than the rest of UK economy [3]. It’s adoption is more pertinent than ever, proving a crucial matter in the longevity of business success and the climate.  Investment trends in solar panels and heat pumps are indicative of this shift. The UK solar power capacity is projected to increase by 500% by 2030 [4]. While the global heat pump market, valued at £59.68 billion in 2022, is forecasted to grow at a Compound Annual Growth Rate of 9.3% by 2030 [5]. These statistics emphasise the growing commitment from businesses and consumers to invest in sustainable technology, as it offers superior long-term investment returns compared to less eco-friendly alternatives.

Further illustrating the potential of sustainable technologies, vertical farming is another area experiencing significant growth. It’s a process that cultivates crops in vertically stacked layers within indoor settings through LED lighting. The global vertical farming market is projected to grow at a Compound Annual Growth Rate of 5.4% by 2026 [6]. This presents an alternative investment opportunity for farmers, which could make them resilient against the fluctuating costs of fertiliser and fuel. Vertical farming practices could also reduce water usage by up to 95% by some estimates [7], saving agriculture businesses a considerable amount in water and energy costs over the medium to long-term. 

Richard Heckel, Head of Specialised Technology, comments on our expertise in leasing green technologies:

We’re proud to be on the frontier of financing cutting edge equipment that supports both innovation and sustainability. Our expertise in payment solutions, combined with our partners experience in sustainable technologies, equips us to foster business growth aligned with industry goals for our partners and their customers.”

There is an undeniable growing demand for a range of green assets from LED, Solar panels, Battery, and Energy storage, ECV charging, Small Wind Turbines, and beyond. Leasing is a proven tool to strategically offset upfront costs when investing in green technology assets, and our payment solutions help remove barriers to accessing necessary equipment. We believe a sustainable enterprise is both a requirement and an opportunity, and that leasing has a fundamental role to play in this transition to a low carbon economy.  

american-public-power-association-fm5_vCUa-Bc-unsplash

500% INCREASE

Projected in solar power capacity by 2030.

9.3% CAGR

Expected in global heat pump market by 2023.

5.4% CAGR

Expected in vertical farming by 2026.

Steering Towards the future: Commercial Vehicles

Throughout 2024 the commercial vehicle sector will continue to undergo significant transformation, further shifting towards eco-friendly transportation. This change is marked by a milestone event that is set to occur in February 2024, with the expected addition of the millionth electric vehicle (EV) on UK roads [8]. This follows a remarkable increase in EV uptake, with a 73.8% rise to 2,964 units in December 2023 alone in comparison to the same month in 2022 [9]. 

This surge in EV adoption is not just a trend but a strategic move for businesses. The benefits of an EV fleet are becoming increasingly apparent, outweighing those of traditional petrol and diesel vehicles. Companies are facing high maintenance costs for non-EV fleets, including fuel expenses and congestion zone charges. In contrast, EVs offer a more cost-effective and environmentally friendly alternative. 

The economic benefits of this shift are significant. By 2025, the move to electric cars is predicted to contribute £24 billion to the UK economy [10]. Globally, the EV market is poised for a surge in 2024, driven by decreasing costs, technological advancements, and strong government support.  

 A pivotal turning point was achieved in the electric vehicle space recently, with 50,000 EV chargers officially installed across the UK [11].  This accomplishment represents a 46% increase in the total number of charging devices since November 2022 [12]. We can expect to witness further growth in the infrastructure of electric vehicle (EV) Chargers, as it seeks to keep pace with the growing number of electric vehicles on the road. 

Asset finance is playing a key role in this transition. Businesses are leveraging this approach to modernise their fleets with the latest vehicles and technologies. This shift is crucial for staying competitive and meeting market demands. We have been committed to the commercial vehicles sector for more than 40 years and are expertly positioned to support customers to make the right long-term decisions for their business. 

Sales Manager, Scott Barnett believes:

Leasing electric vehicles presents an advantageous opportunity for businesses of all sizes. It’s not just about embracing a greener footprint; it’s also a strategic financial decision. By leasing EVs, companies can benefit from the operational savings on fuel and maintenance, combined with various government incentives, making EV leasing a practical choice.” 

RevoLutionising Healthcare

The healthcare landscape in 2024 will continue to evolve rapidly, with increasing pressures on the National Health Service (NHS) accelerating change in how healthcare services are delivered. A notable shift is the migration of NHS patients to private practices, a movement driven by the need to alleviate the strain on public health resources. Recent figures from the 2022 UK Health Accounts, provided by the Office for National Statistics, paint a revealing picture of the current financial landscape in the Healthcare sector. Out of Pocket Expenditure, saw a significant increase of 10.4% over 2022 13. In contrast, Government-financed expenditure on healthcare declined by 1.1% 14. This data supports the trend of medical departments such a as radiology or pathology, which are traditionally managed within the NHS, establishing private practices, with the option of continuing to support NHS patients.

This shift underscores the growing importance of healthcare asset finance, a critical tool enabling public and private healthcare providers to acquire the necessary medical equipment and technology to cater to the needs of their patients. 

The landscape of healthcare in 2024 will therefore be marked by significant transformations, driven by evolving patient needs, technological advancements, and financial pressures. We, as a business, are at the forefront of supporting the healthcare sector’s evolution; recognising the growing demand for innovative healthcare treatments and the impact of restricted budgets on patient health. Our commitment was acknowledged at the LeasingWorld Awards 2023 where we were named ‘Top Technology and Medical Funder’. Through tailored services, we support the growth of our partners, including broker and key vendor channels.  

Ian Swindell, Head of Healthcare UK, highlights the ways in which leasing aids healthcare’s evolving landscape:

Our focus is on supporting practices through these changes with strategic leasing solutions. Our commitment also extends to integrating finance solutions in emerging markets like Physiotherapy and Aesthetics, as well as we’re supporting a move towards service and software models in healthcare, marking a departure from traditional asset ownership.” 

The Future Of Asset Finance

In summary, 2024 presents a huge capacity for leasing to support and drive growth across green technology, commercial vehicles, and healthcare sectors. By offering flexible, strategic financial solutions, asset finance stands as a key enabler for businesses to adapt and thrive in an increasingly dynamic and sustainable economy. The future of asset finance, therefore, is not just about financial transactions but about being an integral part of a broader movement towards economic resilience, environmental sustainability, and enhanced healthcare delivery. 

[1] Finance and Leasing Association, https://www.fla.org.uk/research/asset-finance/

[2] Finance and Leasing Association, https://www.fla.org.uk/research/asset-finance/

[3] Green Intelligence, https://www.greenintelligence.org.uk/news/green-industries-growing-four-times-faster-than-the-rest-of-uk-economy/

[4] House Grail, https://housegrail.com/solar-energy-statistics-uk/

[5] Green Match, https://www.greenmatch.co.uk/heat-pumps/statistics

[6] Vertical Farming Planet, https://verticalfarmingplanet.com/vertical-farming-in-the-uk-industry-overview/-

[7] Vertical Farming Planet, https://verticalfarmingplanet.com/vertical-farming-in-the-uk-industry-overview/

[8] Fleet World, https://fleetworld.co.uk/uk-on-course-for-one-million-evs-on-roads-by-february-2024/

[9] SMMT, https://www.smmt.co.uk/2024/01/uk-demand-for-new-vans-grows-in-every-month-of-2023-as-businesses-go-electric-in-record-numbers/

[10] Green Fleet, https://greenfleet.net/news/22062020/electric-vehicles-could-benefit-uk-economy-ps24bn-2025

[11] EZ Charger, https://ez-charge.co.uk/2024-what-to-expect-for-ev-charging-in-the-year-ahead/

[12] ZapMap, https://www.zap-map.com/ev-stats/how-many-charging-points#:~:text=At%20the%20end%20of%20November%202023%2C%20there%20were,charging%20devices%20were%20added%20to%20the%20Zapmap%20database.

[13] Office for National Statistics, https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthcaresystem/datasets/healthaccountsreferencetables-

[14] Office for National Statistics, https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthcaresystem/datasets/healthaccountsreferencetables-

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.

In our ongoing commitment to supporting the Healthcare industry and fostering innovation, we are pleased to announce the appointment of Ian Swindell as the Head of Healthcare UK for BNP Paribas Leasing Solutions.

Ian brings a wealth of experience and strategic vision to this role, which has been recognised at the Leasing World Gold Awards in October, where we were honoured as the ‘Top Technology and Medical Funder’ in 2023. This accolade reflects not only our dedication to the healthcare market but also underscores Ian’s leadership in collaborating with partners, developing the broker channel, and transforming the approach of key partners in the market.

As the Head of Healthcare UK, Ian will play a pivotal part in developing the UK Healthcare sector further. His leadership will set new benchmarks for progress and ensure that our partners and customers have consistent access to the latest advancements in healthcare technology.

I’m delighted to accept the role of Head of Healthcare UK. I look forward to furthering our mission and commitment to the healthcare market, and to upholding our reputation for excellence, providing the most beneficial solutions to partners and customers.”

– Ian Swindell, Head of Healthcare UK for BNP Paribas Leasing Solutions UK

“Ian’s knowledge and expertise have been instrumental in developing our presence in the healthcare market and cultivating new relationships with European, pan-European and British vendors. I wish him the very best of luck in his new and well-deserved appointment.”

– Jeroen Veldhuizen, Head of Global Healthcare for BNP Paribas Leasing Solutions

I’m really impressed with Ian’s commitment to the healthcare finance sector. He has worked tirelessly to provide opportunities for our partners and customers in the face of economic uncertainty during 2023. We see challenges as opportunities to innovate and enhance our dedication to this sector, ensuring a healthier future for all.”

– Eric Gandemer, Chief Executive Officer for BNP Paribas Leasing Solutions UK

To find out more about the healthcare solutions we offer, contact Ian or visit our healthcare page.

At BNP Paribas Leasing Solutions, we offer capital efficient business equipment financing solutions in key sectors including agriculture, construction, transportation, materials handling, ICT, healthcare and green tech. Drawing on our proud 70-year history, our partners and clients rely on our market expertise, asset know-how and advisory services to propel their growth, transformation and transition to a low carbon circular economy. We are present in 17 countries across Europe and Turkey, employing over 3,700 experts. We also offer vendor finance solutions in the USA and Canada in partnership with Bank of Montreal, and in China through Jiangsu Financial Leasing. In 2022, we advanced over €14 billion in asset finance and presently manage a €38 billion leased assets portfolio. BNP Paribas Leasing Solutions is fully owned by BNP Paribas and is positioned within the Group’s Commercial, Personal Banking & Services division.

For Media enquiries, please contact:

Rebecca Rabbitts @ marketing.leasingsolutions@uk.bnpparibas.com

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.

For customers with a tax year ending on 31st March, the time to review capital equipment expenditure for the current financial year is now. This will include most sole traders and individuals trading within a partnership. There is, however, a need to act fast. There are two generous capital allowance schemes available under a hire purchase agreement. In order to qualify, any equipment concerned must be on site and available for use within the financial year in which the allowance is claimed.

For those businesses in the final quarter of their financial year, the two allowances referred to above enable the full capital allowance of a newly acquired asset to be offset against tax in this financial year. The added benefit is that, under a hire purchase agreement, payment for the equipment concerned can be spread over a number of future years. The two schemes are:

Annual Investment Allowance

A capital allowance equating to 100% of the cost price of a qualifying asset can be claimed against tax in the year of acquisition. This allowance has a cap of £1,000,000 for the calendar year 2022. It is available on new and used equipment and can be claimed against both income and corporation tax. This means that all business trading styles can benefit from the scheme.

Super-Deduction

A capital allowance equating to 130% of the cost price of a qualifying asset can be claimed against tax in the year of acquisition. You read it correctly! This scheme allows a business to claim a tax allowance on a sum that is 30% more than the actual cost of the asset. By any standard, this is one of the most generous tax allowances ever introduced.

Whilst there is no cap on the amount of expenditure allowed under this scheme during 2022, the allowance can only be claimed against corporation tax. This means it is not available to sole-traders and partnerships. Unlike the annual investment allowance, super-deduction is available for new equipment only. It is also worth pointing out that it cannot be claimed in cases where assets are purchased for onward hire.

Cars cannot be included for either allowance, but commercial vehicles, plant and machinery all qualify, subject to the conditions described above.

Many businesses have a financial year ending March 2022, and this can act as a powerful and immediate incentive to bring forward capital expenditure to reduce any current tax liability. To benefit from these allowances before the end of their financial year, a business needs to ensure that any qualifying equipment, acquired by way of a hire purchase agreement, is ordered and delivered during the current quarter.

A hire purchase agreement allows businesses to acquire the equipment they need now and get the full benefits of the generous capital allowances currently available, without the need for a large cash outlay. In other words, businesses can get the tax allowances in their current financial year but spread the cost of purchase over a number of future years. A further point to note is that the interest element on a hire purchase agreement can also be offset against tax as a business expense. This means that for companies expecting to see an increase in corporation tax from 19% to 25% from April 2023, the real cost of any hire purchase agreement signed this year will reduce from that date.

In conclusion, and providing stock is available, there are many businesses that have a strong financial incentive to bring forward the acquisition of capital equipment. This means they will be able to retain cash for investment elsewhere. Capital allowances claimed now, on equipment subject to hire purchase agreements, provide the perfect solution.

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 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.

The challenge of keeping a growing and ageing population healthy is immense and whilst additional funding for the NHS has recently been announced, many believe that simply pouring more cash into the existing system is not the answer. Fortunately, help is at hand.

We are in the early stages of a revolution in the provision of health care. The Daily Telegraph recently published a paper outlining how a host of new technologies are uniting to transform the way we treat patients and develop new cures – from artificial intelligence (AI) and robotics to virtual reality and connected devices.

The sheer scale of changes being introduced is too great to summarise in any detail, however a paper published by the British Medical Journal in November 2018, illustrated examples by examining how AI and machine learning will change the role of doctors. In this paper Jörg Goldhahn, a medical academic, pointed out that AI systems simulate human intelligence by learning, reasoning, and self-correction. Importantly this technology shows the potential to be more accurate than physicians at making diagnoses in specialties such as radiology, dermatology, intensive care and at performing surgical interventions. In 2017 a robot passed China’s national medical exam and exceeded the minimum required by 96 points! As machines increasingly take charge of the technical tasks involved in medicine, Goldhahn and his colleagues suggest that the role of doctors will change from providing primary medical care to interpreting machine diagnosis and treatment in an empathetic way that can be understood by patients.

Another key area that will improve patient outcomes, whilst significantly reducing costs, is the increasing ability for health professionals (or machines) to monitor patients remotely. Wearable smart devices that record blood glucose levels, blood pressure, heart rates etc can be transmitted to machines using AI, to identify patterns in data to predict, prevent and treat disease or ensure patients are taking prescribed medication.

The changes we are seeing within the delivery of medicine involve the introduction of hardware and software that can manage the growing amount of data being collected and transmitted.

As with any large scale investment, the initial costs involved in introducing new technology will be high; however the long term gains make such investment an absolute necessity. Leasing has always been a favoured, and often only, means that the health industry has been able to acquire all the equipment needed, and there is no reason why this will not be the case for the foreseeable future. However, it is likely that the type of leasing required in the future might change.

Traditionally, medical equipment leased within healthcare has been expensive hardware with a high residual value and long shelf life. New technologies however, are more software based, and so the ‘equipment’ supplied will often have little or no residual value, and will be subject to regular change as technology continues to rapidly evolve.

In the future, the type of leasing required by health professionals is likely to replicate that offered by IT solution providers, rather than medical equipment suppliers. This will mean contracts that can be upgraded easily as new technology becomes available, together with an ability to add hardware and software.

Over recent years a number of leasing companies have become specialists in specific markets driving a high degree of innovation as they seek to align the type of finance offered. It is now almost certainly the case that a further level of innovation will be required to meet the future procurement needs involved in the delivery of healthcare.

BNP Paribas Leasing Solutions have well established specialist healthcare and IT finance divisions and by bringing IT experience and expertise to its healthcare division are particularly well placed to meet the challenges that lie ahead.

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

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.