GRENKE’s Lease of Life Report follows interviews with over 600 SME businesses around the UK to understand their thoughts and views on Leasing as a vital form of finance. The results demonstrate that alternative finance, and Leasing in particular, makes a positive contribution to the UK’s economy and it could be even greater if more businesses were aware of the benefits.

Since then the GRENKE Leasing team has explored the key themes that arose in the Report in greater depth by holding Round Table discussions with the equipment dealer community across a number of different industry sectors. We recently held our second such event in London. It was hosted and chaired by the UK’s Managing Director of Sales, David Horton, along with Shereen Qadri, Branch Leader of London and the Southern Home Counties. They were joined by business leaders from Hardsoft Limited, Xeretec Limited, Clear Business Finance Limited, Managed Technology Limited and the Head of Policy and Public Impact at the London Chamber of Commerce and Industry.  

Let’s join the conversation.

To what extent does Leasing as a form of finance make a positive impact on UK SME businesses? How can Leasing companies and equipment dealers encourage more business leaders to use Leasing as a primary form of finance?

David Horton, Managing Director of Sales, GRENKE Leasing, opened the discussion. “The economy is undoubtedly in a state of flux. Many businesses are having to work harder just to stay head of the curve and they are coming up against more and more challenges. Our Lease of Life report showed that, while equipment Leasing makes a positive contribution to the UK economy, only 4% of the SMEs we spoke to are currently using it as a form of finance. Our research and subsequent conversations with equipment resellers revealed further critical information about the Leasing industry. This is helping Grenke to provide them with greater targeted support.

Our first Round Table event focused on the need for education and this time, given how keen we are to keep the dialogue going, we wish to explore the challenges faced by equipment resellers. We also ask the following question. “Given the benefits of leasing, how can Leasing companies and equipment resellers encourage more business leaders to use Leasing as a primary form of finance?”

Andy Brown, Xeretec Limited: It’s a challenge but, as a managed IT solution provider, it’s been about changing the business community’s view of how you acquire the kit that you may have always bought cash. We try to be as innovative as we can with how we approach funding.

Philip Morgan, Co-Founder of Hardsoft Limited: Our battle has always been “why lease, why buy?” With a lease, we sort it all out for the customer – the paperwork, the monthly amount. It’s done - you’ve managed your credit and you’ve managed your liquidity. So yes, it’s a challenge, but at the end of the day we don’t actually sell anything, we only offer products as a service.

David Horton: It’s particularly beneficial to use Leasing to manage your cash flow. Steve, you’re a broker and you sit between Leasing companies and the reseller in the same industry, what are your thoughts?

Steve Dexter, Clear Business Finance Limited: In our world, as a broker, there is a difference in attitude between hard assets and soft assets. One of our biggest challenges is to get soft asset suppliers to sell with finance because they don’t tend to have that type of sales culture. And it can be very hard to establish that unless you’ve got buy-in from the very top and they’re invested in a finance leasing solution. On the other hand, the hard asset world wants to sell the finance option and can be very hands off when it comes to this.

Matt Butterworth, Managed Technology Limited: In my experience, Lease products are simple if explained correctly. So, it comes down to the salesperson and they can really differ in their approach. Unfortunately, their skill isn’t necessarily in selling Leasing. My opinion is we particularly need to train our sales people to be more confident about discussing finance products, their cash flow benefits, and the facts around tax benefits.

Nick Burke, Almas Industries Limited: I genuinely believe that finance is an easy conversation for us if we’re presenting our products properly. We supply, we install and we maintain. We have a cradle to grave approach. Our proposition is that we give our customers peace of mind – we’ll look after everything and it’s a fixed monthly amount.

Shereen Qadri: Supplier education is key isn’t it? At GRENKE we’re also constantly working on the tech, because everything is becoming faster and faster, and customers expect a quicker turnaround. We’ve spent a lot of time focusing on the customer journey and tech is of course a big part of that. Not only do we want to create even greater transparency, but we want to help sales teams build closer relationships with their customers.

Nick Burke: Our sales model at Almas is built on transparency. We use tech like DocuSign for a quicker and more transparent experience. We believe it’s critical for our long-term growth and customer retention.

Andy Brown: Technology influences how our people work and the service they can deliver. It’s the key to our people doing their jobs better, because then they are doing a relationship role rather than just a processing one. And, at the end of the day, it enhances the experience of our suppliers, our customers - the whole chain.

Steve Dexter: I agree with that. Technology is the key for our people to do their jobs better, because then, as you say, the focus is on the relationship. GRENKE has invested in a great system. You have to have the right tech.

Philip Morgan: Leasing is an easy form of borrowing and the tech speeds it up. If you go for a Lease you can get an answer in about 24 hours. But if you go to the bank you could be waiting a while. But actually, talking about Leasing more opens up the equipment market even more and that’s good for business.

Steve Dexter: It starts with training the sales team. Customers’ buying habits have changed, just look at the car market. To make Leasing more attractive for other assets we need to change customers’ buying habits.

James Watkins, London Chamber of Commerce and Industry: That’s an interesting point. There was concern in London when ULEZ (Ultra Low Emission Zone) was introduced, but in fact it wasn’t so bad in the end because of the ease of buying new, modern cars and trading old cars in. Twenty or thirty years ago, that would have been a completely different ball game.

Shereen Qadri, GRENKE Leasing: Do you think endorsement from trade associations and organisations like the London Chamber of Commerce and Industry can help improve awareness of Leasing as a finance option?

James Watkins: Leasing makes perfect sense amongst a portfolio of finance offers and organisations such as the London Chamber of Commerce and Industry can help to promote them. To me that seems to be part of the solution.

Philip Morgan: I do think that training is a big part of Leasing.

David Horton: You also have to consider what you’re actually selling. A solution or just a product? If you’re selling the solution then that should encompass the price of how the customer pays for it.

Andy Brown: Traditionally customers have been indoctrinated that the only way to buy IT is through a PO (Purchase Order). In other words cash. But at Xeretec we want a relationship not just a transaction. We’re trying to support our customers in different ways, for example webinars, to create more conversations which help us to understand our customers’ opinions and identify the key areas where we can help them more. We want to know what three things keep them awake at night, so we can support them more.

David Horton: What sort of response are you typically getting from your customers?

Andy Brown: They’re concerned about retaining their talent, so they want to create a business environment where they can keep and grow their staff. We advocate that they don’t “buy” technology but they procure the ability to be more “enabled” and it makes more sense to do this on a Lease rather than investing cash. We want to work with our customers over a period of time when we would develop the right solution for them. So our sales teams have become trusted adviser-partners. It’s one of the reasons why we’ve not hired anybody from the legacy managed print industry. We need new ideas, new people, a new approach.

Nick Burke: Resellers need to understand how to sell Leasing even better so it’s second nature. Of course having accreditations and endorsements from reputable businesses and organisations helps the conversation. And so does finding salespeople with the right soft skills. The ones you can’t teach.

David Horton: One of the key takeaways as an organisation from the first Round Table was the education of the reseller community and of what Leasing companies do. We have a formalised on-boarding policy for all resellers which begins with us completing our own extensive due diligence. Why do we do this? In simple terms, bad resellers give us bad business. We want to make sure that we have a long-term customer because, guess what, if a customer’s unhappy, they stop paying us.

Shereen Qadri: Our Lease of Life Report revealed that out of the 600 SME businesses that we interviewed only 4% used equipment Leasing as a form of finance. It’s clear from some of the conversations that we had when we were putting our report together that lots of SMEs still have quite a limited knowledge of the choice of finance options that are available to them. Once again it seems to come back to education. So what would you say to small businesses that want to Lease their assets to help grow their business?

Philip Morgan: I would say that as long as you’ve got a good supplier, they’ll look after you and Leasing will help control your costs.

David Horton: It’s all about the business man taking competitive advantage while retaining liquidity in the business. I remember various recessions and what killed most businesses wasn’t the fact they didn’t have a full order book – they did – it was the lack of liquidity. So, what would you like us to take away to work on?

Nick Burke: I think there needs to be greater collaboration between us so you understand our sales models in even more depth and detail. This approach, as part of a formalised training course where the GRENKE team offer advice and tips on best practice, would help accelerate sales and increase conversion rates.

Matt Butterworth: Yes, when I started as a salesman 24 years ago, I was trained to clearly explain the finance option and the Leasing agreement in particular to the customer. That included the insurance because the asset needed to be insured whether it was the customer’s insurance or the Leasing company’s.

James Watkins: I think what I can do is to talk to colleagues at the British Chamber of Commerce and central government and regional structures to see how we can integrate the Leasing option within our business programs. I think this is really important.

David Horton: Thank you all for your contribution – we find these conversations particularly valuable. We’re listening to what you say and using what you share with us, to implement new ideas.

GRENKE Leasing provides the financial means and the flexibility to enable businesses to access the equipment at the time they need it. And, by opting to lease over asset ownership, businesses have the flexibility to upgrade when it best works for them whilst managing their cash flow and liquidity.