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

Key announcements and the economic landscape

Chancellor, Jeremy Hunt, has delivered his second budget and fourth fiscal event on Wednesday 6 March. With an upcoming election likely to take place in the latter half of the year, there was enormous political pressure on Mr Hunt to deliver measures that would serve the electoral interests of his parliamentary colleagues. The prevailing mood within the ruling Conservative Party was that cuts in personal taxation would present the best chance of Tory MPs retaining their seats at the forthcoming general election.

Therefore, the big question for the Chancellor was the degree to which he could cut taxes without provoking an adverse market reaction, such as, currency devaluation and the huge increase in government borrowing costs, that followed the unfunded tax cuts announced in the Truss/Kwarteng ‘mini-budget’ of September 2022. Governments set fiscal rules in terms of how much they intend to borrow over the medium term and whilst they can change those rules, market credibility is at risk when they either miss the targets previously set or, to avoid missing them, simply change the target.

Jeremy,Hunt,Mp,Chancellor,Of,The,Exchequer.

The government target in terms of borrowing, is that debt should be falling as a percentage of national income in 5 years’ time. The degree to which this target is on course to be achieved determined whether there was ‘fiscal headroom’ for tax cuts in the short-term. The Office for Budget Responsibility (OBR) is the official Treasury forecaster and as such the key arbitrator to the existence and size of any fiscal headroom.

The OBR forecast that accompanied the budget statement concluded that the recent reduction in the rate of inflation has fed through into lower spending on the portion of government debt linked to the Retail Price Index (RPI). As such, government borrowing is below the £124bn forecast by the OBR in the Autumn Statement of 2023, the OBR also revised it’s forecast for future economic growth, which looks slightly more positive. In the short-term at least, this created some fiscal headroom.

KEY TAKEAWAY FOR THE ASSET FINANCE SECTOR

The Chancellor announced that a draft legislation will be published within weeks to extend full-expensing to leased assets. This represents one of the most attractive capital allowance regimes that could drive growth within the asset finance sector.

Currently full-expensing on purchased assets has allowed the full capital allowance for qualifying plant and equipment to be claimed in the year of purchase, this effectively rewards companies with up to 25p off their tax bill for every £1 that they invest. However, leased assets to date, have been exempt from this scheme. The legislation proposed in this budget, which will come into effect after a period of consultation, now gives a similar tax break to leased assets. The Finance and Leasing Association (FLA) have long campaigned for this measure and it will be widely seen within the business world as allowing a fiscal flexibility that ensures UK businesses can keep upgrading to cutting edge and green technology without having to buy the assets required to achieve that objective.

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The Chancellor stressed that business investment remains critical to the long-term success of the UK economy, the other measures that were announced were:

VAT threshold to be raised from an annual turnover of £85,000 to £90,000.
An extension of the small business recovery loan scheme.
An extension of regions benefitting from government business funding.
Steps to ensure pension funds can extend their investment activities.
Support for high tech industries, in particular those related to nuclear energy as well as the arts and life sciences.

Taking all of this into account, the flagship announcement in the budget was a reduction of 2p in the rate of National Insurance Contribution (NIC) payable on earned income by people of working age, as well as continued freezing of fuel and alcohol duty. The NIC announcement followed a similar reduction presented in the Autumn Statement of 2023 and effective from January this year. Given that public expenditure targets set last year were not to be reduced, several tax rises were also announced to help fund these measures. Such measures included the phased removal of ‘non-dom’ tax allowances, the introduction of a tax on vaping products, an increase in certain types of air travel duty and the removal of tax allowances on holiday lets.

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 economic landscape of the UK is currently marked by the recent announcement of a technical recession. With a general election also on the horizon, businesses find themselves navigating through an array of challenges. Compounding these challenges is persistent inflation, which remains above the Bank of England’s target at 4%. In such turbulent times, businesses are seeking resilient strategies to maintain stability and foster growth. Leasing can be an excellent option amidst economic uncertainties as it provides the flexibility businesses need to adapt.

UPDATES FROM THE AUTUMN STATEMENT 2023

The 2023 Autumn Statement unveiled significant measures aimed at bolstering the business environment. Notable among these were the permanence of full expensing allowances and reductions in national insurance for workers. These initiatives underscored the government’s commitment to creating a conducive environment for business growth.

Full expensing allowances present an attractive proposition for businesses, as they enable the deduction of the full cost of qualifying assets from taxable profits in the year of purchase. This provision applies not only to outright purchases but also to hire purchase agreements. It is therefore a compelling option for businesses looking to get the full capital tax allowance before having to pay for the equipment. With its launch in April last year, it can be speculated to be a contributing factor to the 6.1% increase in capital expenditure for 2023.

The reduction in National Insurance announced in the Autumn Budget did not come into effect until January 2024. Therefore, it is possible that it could lead to increases in consumer spending and have a positive impact on economic growth in the first quarter of the year. It could also be a factor in slowing the rate of any reduction in inflation.

London,,England,Feb,17:,Downing,Street,Is,The,Official,Office

SPring Budget Predictions

As anticipation mounts for the Spring Budget 2024, speculation grows regarding the relief measures and incentives that the government may unveil.

So, what is likely to be on the agenda?

Prioritisation of short-term benefits for consumers: With a general election taking place later in the year it is highly likely that the budget will be aimed at delivering short-term benefits to consumers.

Public Expenditure: It is possible that measures could be taken to improve business investment such as limited increases in public expenditure. This could affect sectors like health and transport.

First Year Tax Allowances: There is potential for the extension of first-year tax allowances to all types of leasing, as advocated by the Finance & Leasing Association (FLA). This move would level the playing field for businesses considering leasing as a viable financing option, further enhancing its attractiveness in the current economic climate.

Head of Partner Training and Development, and asset finance expert, Andy Milsom, believes that:

The main measures announced in the Spring Budget will almost certainly be driven by political consideration. If there is any increase in government expenditure, the likely beneficiaries will be members of the public through reductions in personal taxation. Certain measures announced in the two financial statements of 2023 were aimed at increasing business investment and it is possible that some limited further initiatives could be taken in this area.”

In conclusion, the 2024 Spring Budget holds significant implications for the asset finance industry and businesses at large. As stakeholders eagerly await the government’s announcements, the resilience of leasing as a financing strategy becomes increasingly apparent. With its flexibility, tax advantages, and ability to mitigate financial risks, leasing offers businesses a valuable tool for growth amidst economic uncertainties. As the budget unfolds, businesses must remain agile and proactive in leveraging the opportunities presented to them, ensuring that they emerge stronger in the face of ever-evolving economic challenges.

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 Financial Conduct Authority (“FCA”) has recently announced it is using it’s powers under section 166 to investigate the historical use of discretionary commission arrangements (“DCA”) in the motor finance industry.

As a reminder the FCA’s primary area of responsibility is to regulate consumer credit with consumers being defined as individuals operating in a personal capacity, as a sole-trader or within a partnership of three or less individuals. Given that the payment of commission by finance companies in return for business introductions from equipment suppliers or finance brokers is a common feature within many markets, questions are understandably being raised as to whether the FCA might, in the future, launch a wider investigation into the matter. At this stage, however, it is important to note that, whilst the number of customers involved are huge, the FCA are addressing one specific form of commission applied to one specific market involving only certain finance agreements.

The specific type of commission arrangement involved is one which allowed the person arranging the finance (broker) to adjust the interest rates they offered customers for vehicle finance. Typically, under this type of scheme, the higher the interest rate, the more commission the broker received. This was known as a discretionary commission arrangement and created an incentive for brokers and dealers to increase how much people were charged for their car finance agreement with the customers being unaware that such arrangements applied. This practice was banned by the FCA in January 2021, but there have since been a high number of complaints from customers about how much they were charged on finance agreements provided before the ban.

The FCA investigation which is now underway will apply where a customer used car finance to buy a motor vehicle, for example a car, van, campervan or motorbike, before 28 January 2021 (this includes hire purchase agreements, such as Personal Contract Purchases) and that the lender or broker had a discretionary commission arrangement. The investigation excludes any deal where finance was used to buy a vehicle on or after 28 January 2021 and all deals involving a hire agreement, such as a Personal Contract Hire or any form of leasing where there was no option for the customer to acquire title to the equipment.

Whilst the investigation is in progress the FCA are pausing the complaints process to ensure that if customers are owed compensation, they will get it in the best way possible. As such the normal 8-week deadline for providers to respond to complaints about car finance involving this type of commission will not apply. Customers can still complain to their provider, but they will not have to respond to such complaints until after 25 September 2024, at the earliest.

The FCA investigation and the scale of potential compensation claims will undoubtedly raise general questions about the types of commission arrangements that apply within the finance industry and all concerned will be following the FCA investigation with keen interest.

ITV recently screened an episode of the Martin Lewis Money Show Live which addressed the issue of commission payments offered by finance companies to those involved in the sale of vehicles and actively encouraged consumers to write to their finance companies to ask whether DCA model was used in their agreements.

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 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.  

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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.

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

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 is pleased to announce the appointment of Eric Gandemer as the new Chief Executive Officer for the UK business. Eric’s extensive international experience and distinguished leadership record within the organisation makes him a valuable addition to the UK team. 

Eric joined BNP Paribas Leasing Solutions in 1999. In 2010, after holding various roles across Europe, he relocated to Germany where he assumed functional responsibility for Finance, IT and Collections & Recovery. His strategic acumen and adept management skills saw him promoted to the role of CEO for Germany, Austria and Switzerland in 2017 (DACH). During his tenure, Eric expertly steered the DACH cluster, where he executed innovative strategies that further accelerated growth and transformation for Leasing Solutions Switzerland. 

Beyond his professional accomplishments, Eric is an advocate for corporate social responsibility. His recent work alongside his team for the Child Protection Association earned them recognition from the City of Cologne, further underscoring their commitment to creating tangible change. 

In his new role, Eric will lead the UK business as it continues to focus on its strategic growth objectives and the delivery of industry-leading finance solutions across multiple asset markets; plus, the launch of digital service enhancements that further underpin Leasing Solutions as the customer-centric funder of choice.

Rachel Appleton, who most recently held the position of CEO, will assume the role of Head of Technology and Lifecycle Solutions UK. Rachel’s journey with Leasing Solutions began in 2001 as a founding member of the UK Technology and Lifecyle Solutions business, she has occupied a variety of influential roles throughout her career. Rachel’s exceptional knowledge of the technology and asset-finance industry serves as a solid foundation on which the UK business will further scale its finance solutions for vendors and partners, including within the Green Technology, Healthcare and Specialised Technology sectors.

I am delighted to welcome Eric as the new UK CEO. His extensive international experience and longstanding commitment will greatly contribute to our UK strategy.”

– Raf Ramaekers, Country Supervisor for BNP Paribas Leasing Solutions UK

It is a privilege to step into the position of UK CEO. Throughout my career at Leasing Solutions, I have built a passion for its mission, its long-term partnerships, and its people. I look forward to guiding our teams towards our growth and transformation ambitions and continuing to uphold our exceptional standards of service.”

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

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.

BNP Paribas Leasing Solutions UK has appointed Marc Berry, Head of ICT Sales with effect from September 2023. Marc brings a wealth of experience in sales and leadership, having demonstrated an impressive track record at companies such as Lombard and most recently HPE Financial Services, where he held a number of leadership positions over a 20-year tenure, the most recent being VP Sales EMEA. His ability to connect with people, combined with his team-oriented mindset, has consistently yielded positive outcomes. Marc’s appointment reflects the continued commitment of Leasing Solutions to the ICT market and an exciting chapter in the evolution of ICT sales for Technology Lifecycle Solutions.

It’s been a smooth transition into the role and I feel empowered to use my years of knowledge in the sector to help drive the ICT business forward. My first few weeks in the role have been fantastic and I’ve really enjoyed the challenge of better understanding the business as well as meeting our partners. BNP Paribas is a great brand in the market and I’m looking forward to helping the team expand our existing relationships, opening new ones and growing this important segment of the business.’’

– Marc Berry, Head of the ICT Sales Team for BNP Paribas Leasing Solutions UK

Marc is a real people person and a team player. He prides himself in building mutually profitable relationships and winning new business and I am confident that he can support our ambitions to continue to grow ICT for the future.”

– Rachel Appleton, Head of the Technology Lifecycle Solutions Unit for BNP Paribas Leasing Solutions UK

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.

How can flexible payment solutions overcome the challenges of acquiring cybersecurity?

In today’s rapidly evolving digital landscape, the challenges of cybersecurity have become more complex and pervasive than ever before. The continuous growth in technological advancement has led to both enhanced business opportunities and increased vulnerability to cyber threats. As attackers continue to refine their tactics and exploit new technologies, businesses face a pressing need to increase their defences against an ever-expanding array of cyber risks. In this article, we discuss how we work with partners to overcome the challenges of acquiring cybersecurity for their customers, and explore the benefits of our payment solutions.

Understanding Our Partners’ Current Realities

The economic climate in 2023 has cast a shadow over businesses’ ability to prioritise investment in comprehensive cybersecurity solutions. As customers face financial constraints, pressure mounts on businesses to deliver protection while navigating squeezed profit margins. Partners are confronted with the need to find cost-effective solutions that align with customers’ financial realities.

The Cybersecurity Breaches Survey highlights that:

32% of small businesses recorded cyber attacks between April 2022 and April 2023.
In medium and large businesses, the threats are more frequent, with stats showing 59% of medium businesses, and 69% of large businesses recording attacks over the same time period.

Among those identifying breaches or attacks, it is estimated that the single most disruptive breach from the last 12 months cost each business, of any size, ‘an average of approximately £1,100. For medium and large businesses, this was approximately £4,960’ [1], further emphasising the urgency for robust cybersecurity. These figures do not account for the man hours spent rectifying a security breach or attack each time it happens.

Unfortunately, SME’s are often vulnerable to cyber criminals as they have less security due to limited budget. For instance, ‘the average cybersecurity budget for a small business is set to halve in 2023 despite four in five (79%) SMEs having experienced a cyber attack in the past 12 months [throughout 2022] [2].’ Attacks can be devastating, resulting in anything from destroying vital systems and leaking confidential customer information to demanding significant ransom payments. In most cases, they end up costing a significant amount of money and resources. Furthermore, ‘SMEs will spend an average of around £50,000 on cybersecurity over the next year, compared to around £100,000 in 2022’ [3], highlighting that the issue at hand is more prevalent than ever.

[1] [2] [3] Cyber security breaches survey 2023 – GOV.UK (www.gov.uk)

The below graph, taken from the cyber security breaches survey, shows the main barriers to businesses when analysing at the risks associated with not having robust cyber security systems in place.

Innovative Solutions

In response to the complex challenges of cybersecurity, we are committed to providing adaptive solutions that expedite return on investment for partners and their customers.

When our partner sales teams speak to their customers they offer these key benefits:

The opportunity to preserve capital: In a deal financed by capital, return on investment can take years to achieve. Alternative payment solutions can empower businesses to assess their monthly budget rather than their capital. Utilising this means that a business can acquire the most up to date cybersecurity technology, ensuring they do not lose out on potential business.
The ability to increase business safety, virtually and financially: Through our payment solutions, businesses can ensure timely upgrades to the latest systems, reducing the risk of being hacked by the increasingly sophisticated new cyber criminal techniques. This is all managed under a flexible monthly payment that aligns with their budget.
Protection against price hikes and fluctuations whilst securing credit lines: Repayments remain fixed from the point at which the contract is signed, guaranteeing stable and predictable cash-flow. It also protects the future value of an asset against inflation.
Reduce pressure on pricing and enables customers to focus on building their cybersecurity infrastructure: Our payment solutions are the most effective way to refocus budget onto integral internal defences.
Enable businesses to claim back capital allowance tax breaks: When utilising operational expenses (OPEX) you may be entitled to tax breaks*. You can find out more about this by speaking to your account manager. Saving capital is beneficial in a difficult economy and it preserves funds to accommodate to a changing financial climate. Read more here. **
A streamlined process in comparison to a loan: Sourcing a loan can often be a time-consuming process, furthermore it does not always guarantee fixed rates which our solutions offer.

* 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.

** Disclaimer
Please note, capital allowances only apply to outright or hire purchase leases. If the markets you are targeting use operating or finance leases the information will not be applicable.

OUr Offering

We recognise that businesses require tailored solutions to address their unique cybersecurity needs. Our offerings encompass a multi-vendor approach that supports funding for a wide range of vendor software and hardware solutions:

We finance transactions as small as £1,000 to over £1 million
Our simple fixed-term lease agreements ensure flexibility
We are dedicated to assisting with the funding of more complex Managed Service Agreements, catering to the requirements of larger customers
Our flexible payment solutions can cover the costs of implementation, training and consultancy fees.

Ronan Glennon, Business Manager, discusses the advantages of our flexible payment solutions:

Our portfolio is constantly expanding to accommodate new cybersecurity threats. As cyber-attacks become more sophisticated so do the solutions we offer.”

James Levitton, ICT Business Development Manager, highlights the importance of maintaining consistent cybersecurity defences:

Cybersecurity is not a one-time investment; it’s an ongoing commitment. Through our payment solutions, businesses can acquire cyber technology, which provides the agility to respond to emerging threats and keep their defences strong.”

Trustworthy cybersecurity systems are the cornerstone of client acquisition and retention. Our solutions bridge the gap between security needs and financial constraints, empowering sales teams to drive growth and customers to invest in critical technology

contact us for more INFORMATION

To explore how our solutions can empower your business, we encourage you to connect with Ronan Glennon and James Levitton.

Together, we can take proactive measures to secure the safety of critical data.

Contact James Levitton
ICT Business Development Manager

Contact Ronan Glennon
Business Manager

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.

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

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.

Office Equipment is a multi-billion-pound industry; its solutions are used in every business, government, office, home, school, hospital, and warehouse across the UK. But what are the recent challenges that the market has faced?

In this article we explore the changing dynamics of the Office Equipment market, alongside our BNP Paribas Leasing Solution experts, Mark Harris, Office Equipment Sales Director, and Mark Broad, National Account Sales Manager. We’ll be looking at the key challenges faced by dealers and manufacturers, and the strategies employed to overcome them. We’re keen to be at the forefront of shaping the future direction of the market and the emergence of new business models and collaborations.

Addressing Pandemic-induced Shifts

The 2020 pandemic brought about a significant shift in work culture, with the rise of remote work leading to reduced time spent in traditional office spaces. Consequently, the demand for office equipment such as printers and copiers declined, causing a substantial drop in recurring revenue for dealers in that market. “Anecdotally, we have heard that some dealers experienced a staggering 40% decline in revenue, creating a challenging environment for their businesses to thrive” explains Mark Broad. FLA figures support this evidence, showing that the IT equipment finance sector has reduced in new business volume by 58% from this time last year (figures taken in March 2023)⁽¹⁾.

To mitigate this revenue loss, Office Equipment dealers have been actively exploring new revenue streams and diversifying their product offerings. Recognising this shift, top manufacturers are adjusting their business models to support the dealer network. However, the ability to adapt and diversify remains a crucial factor in determining the long-term survival of dealers in the evolving market.

How is the market evolving to overcome challenges?

Despite the changes brought on by the pandemic, Mark Harris believes that “print is not going to disappear entirely from all office environments. Instead, it is likely to evolve based on business needs and models. Finance firms are working towards staying relevant by offering the right products and supporting diversification efforts”.

An interesting point to note is that the challenges posed by supply chain disruptions have accelerated trends towards sustainability and innovation industry-wide. The circular economy is gaining prominence, with a focus on refurbishing and reusing office equipment instead of sending it to landfill. Offices are increasingly seeing their e-waste as part of their ESG and CSR ambitions. Using refurbished office equipment and being able to refurb and recycle their redundant tech helps support their sustainability goals. For instance, electronic waste is the fastest growing waste stream on the planet, and the source of 70% of landfill toxic waste. Re-use reduces clients’ e-waste contribution by around 48%⁽²⁾.

We have also seen more joint ventures and mergers in recent years. These collaborations allow manufacturers to achieve economies of scale, diversify their suppliers and future-proof their operations. This approach not only helps mitigate supply chain issues but also fosters greater collaboration among manufacturers in the Office Equipment market.

A Future of Adaptation and Collaboration

The Office Equipment market is currently in a discovery phase, as stakeholders are actively exploring new ways of operating in response to changing demands. Partners are seeking more flexibility, leading to a shift towards documentation and contracts that accommodate the sale of multiple products on a single agreement. Mark Harris considers that this would be a significant step forward, “Traditional contracts are less relevant to new technologies. The industry has already been working towards developing a “universal contract” that can encompass various products and terms in one contract, adapting to the evolving needs of customers.”

Moreover, the future of the Office Equipment market may likely witness a consolidation of print manufacturers through collaborations and joint ventures. Mark Broad deduces that, “Through collaboration, manufacturers are motivated to future-proof their businesses against supply chain disruptions and gain the advantages of economies of scale. Notable collaborations, such as FujiFilm and Xerox, highlight this trend towards increased partnership and consolidation.”

While the Office Equipment market has faced challenges and experienced declines it is far from dying out. Instead, it is finding a new balance in response to changing demands and work environments. Dealers and manufacturers are adapting their strategies, diversifying their offerings, and exploring collaborative partnerships. As the market continues to evolve, the industry is embracing more flexible contracts and sustainable practices, ultimately paving the way for a resilient and innovative future in the Office Equipment market.

⁽¹⁾ Asset Finance Summary – Finance & Leasing Association (fla.org.uk)

⁽²⁾ BNP Paribas 3 Step IT launches European sales offer for technology equipment

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.