Mind the Gap!

Oak Leasing, real people in the real world

Oak Leasing, real people in the real world

As any traveller on the underground will recognise, this phrase is heard quite often on the Tube. If you read most of the papers, and listen to the news, you will still think that we are heading on the upward path to continued growth, and 2016 will be a cracking year! Rose coloured glasses were all the rage in the sixties, but they appear to be still worn in 2015! I think that we will still continue to grow, but perhaps not as fast as some of the media.
There appears to me to be a gap from the real world, and perhaps one which the media inhabits. I don’t know whether it is me showing my age, or if I am right, although I strongly suspect the latter! Funding has changed greatly over the last seven to eight years, with the growth of peer to peer lenders, funding platforms etc, although I understand that not all in the P2P garden is as rosy as it seems.
Latest figures show that 25% of SME’s do not use finance at all, 14% use friends or family whilst 23% use normal bank overdrafts. I understand that up to 500,000 of small firms have their loan requests turned down every year. If my maths are correct, that leaves 38% who are using finance, leasing or HP or other funding sources. Yet this Autumn, if you speak to leasing companies, leasing brokers, and banks, they will tell you that the number of proposals are down by quite a large number. General enquires are also falling. So what is exactly going on?
I would suggest that possibly that one thing that will stall growth is uncertainty. Companies will postpone investment if they consider that the future is not as certain as they would wish. Europe is still mired with very little growth. In France, the last quarter showed zero growth, Germany are hoping for 1.4% growth that was before VW dropped their clanger. China’s growth is falling, and even the USA this week announced that growth had fallen to 1.5%. Those four countries are our top customers for our exports, so it is not surprising that there is some uncertainty. If you couple this with the in/out EU referendum, you would simply say, let’s wait and see how everything plays out before we invest.
If you cut through the spin and gloss, next year looks not quite as rosy as we are led to believe. Robert Peston in his blog this week said “it does mean the ride into 2016 may get slower and bumpier”
We all know that the myth of standing still does not exist, you are either moving forwards or backwards. To move forwards, you have to ensure that you have the capacity to seize opportunities for growth, and that will mean some way you have to invest. You may be able to fund the investment out of cash flow, or savings, or a bank loan. However the main funding source that is available is finance, either leasing or HP.  Whilst many  banks have onerous financial underwriting, going to see the bank manager is akin to waiting outside the headmaster’s study, with a feeling of trepidation. Using leasing companies however is a more informal process, and many of us will be able to give you the options of a variety of funders.
If you are looking for a straight talking leasing partner, either as a customer or as a supplier, we can help you both in the UK as well as Europe. We don’t have spectacles of any colours, we are just the same as you, real people in the real world.  Come and speak to us, they always say that the proof is in the pudding!

Posted in Equipment lease blog, Equipment Leasing, European Leasing, leasing for SMEs | 4 Comments

Cutting to the Chase

The Summer seems to have gone, Greece is well and truly kicked into the long grass, so far in it will take an archaeologist and a combine harvester to find it again! So what is happening in the UK, well let’s see if we can clear the fog.

 
In the last month, there have been two recent surveys, the first by Aldermore Bank, who discovered that 51% of SME’s were worried about their business. The second by Hitachi Credit ,only a couple of days ago, showed that 46% of business were concentrating on stabilising their business, before thinking of growth. Stabilisation quickly can move to entrenchment, and then to stagnation. Since 2005, according to the Office of National Statistics, there has been a “chronic underinvestment in manufacturing” the amount is about £8.4 bn. So the last ten years, we have lost a decade, whilst companies in the Far East , and parts of Europe have grown.

 
The question is simply , why? Well according to a report by the Department of Business in 2013, they concluded with the following, “Although demand is also probably subdued, there is a high level of discouragement from application for lending as well as high rejection rates and margins on credit after controlling for risk. If the situation is not resolved, output, investment and employment will be lower than would otherwise be the case, with adverse effects on economic performance in the short and longer term”

 
After years of reduced lending, it is only this year where bank lending has risen slightly to SME’s. The British Chamber of Commerce yesterday said” However, our business finance system is not where it could or should be, and some of our most promising young companies still struggle to get the finance they need to grow”

 
So if the UK market is not moving quite as we would like, how are our exporters doing? Well you guessed it, in it’s annual International Trade Survey, the BCC found that 24% businesses are reporting difficulty in accessing trade finance or credit insurance. However, leasing was not even considered, the thought of an European lease programme was, and is almost an unobtainable goal, just a mirage. To overcome our large trade deficit, we have to export, and to export, we have to invest, and to invest, we must have access to funding. Hardly rocket science!

 
Leasing has historically always been one of the forgotten arms of funding for business, overdraft first, bank loan second, and perhaps third, HP next, leasing a very poor fifth. It has normally been a supplier led funding source, but with the retrenchment of many supplier companies, this has led to a reduction of business.

 
Unless we understand what is going on in the economy, we will be unable to help provide the solution that it requires. Oak tries to look and understand what the figures really mean, without the hype,without the gloss. This helps us understand both the customer, and the suppliers. This year, we have launched a major European vendor programme for a US company, who are market leaders in their field. This has not been easy, but in doing lease presentations both in Germany and France, they have been able to offer a finance option to their customers. There are a number of other UK firms this year that we have also helped by selling their equipment into Europe, by using a lease option, but obviously, we have not reached enough companies.

 
So as we approach the Autumn, let us approach all of our suppliers and customers alike, and push leasing and promote leasing as a very viable funding option that all companies, new and established, can use to help their growth.

Posted in Equipment lease blog, Equipment Leasing, European Leasing, leasing for SMEs | 3 Comments

Kicked into the long grass!!

Green grass on white background

I cannot believe that here we are again,back in the Summer of 2012, I wrote a blog mainly about Greece, I said “Is it still more austerity, which will increase the chances of sovereign default, or will they be brave, and go for some  growth package to enable countries to come out of the recession.So, what started off as a tragedy, ended up as a marathon, it could only happen in Greece”

If politicians are faced with a decision that might be termed ” difficult” , the thing that they do best is ” kick it into the long grass” Sir Humphrey Appelby of ” Yes Minister” was a fine example of such an art form!

All of the EU politicians were aware that Greece could never succeed with the terms of their bailout, the period was far too short, and was never going to be achieved. However, the ” difficult” problem was telling the electorate what the reality actually was for them. Better simply to say that it will be sorted sometime in the future, nothing to worry about now !

There is a time where,  what was the future is now today. To be fair, the Greeks have not endeared themselves to the Trioka at all, so we all wait for the outcome later this week, Grekxit or not, that is the question.

The UK has faced a similar ” difficult ” decision over Heathrow, since 2006, many consultations and  in depth reports later, still no decision, however there is a rumour of a combine haverster is on it’s way, the grass is so long!

Companies face very similar decision to governments, do we invest now, or do we wait, if it is a “difficult” decision, better give is more thought, and then, even more thought. Opportunities come and go, they do not stay there for ever, and if a company sees an opportunity, they have to make the decision , no ifs or maybes.

Leasing helps spread the cost of the equipment over say three or five years, so that the equipment can pay for itself from the extra revenue that it has produced. No company pays its staff three years salary in advance do they? So why pay for your vital equipment needed for growth  before it has earned you a penny, ( or for our European collegues, a cent!)

Banks are still quite cagey about lending to smaller and medium companies at flexible terms, leasing can be tailor made to suit both you and the term of the equipment. It really is a ” no brainer”

Let’s hope that I won’t be writing about Greece in another three years time, however if you need your  long grass cutting, come to Oak,  over 24 years practice!

Posted in Equipment lease blog, Equipment Leasing, European Leasing, leasing for SMEs | 7 Comments

Everything coming up roses?

big bouquet of pink roses. It is isolated on a white background.

Well, the election is over, manifesto’s shredded now, stone tablets left somewhere for archeologists to discover in a few hundred years time, all the fuss, speeches, photo opportunities ended. Now we can move forward and help move the economy forward.

The only fly in the ointment will be the EU referendum in two years time, but I think that common sense and concerns about growth will keep us in, albeit with some changes given by Brussels. Have no doubt, the leading EU countries will try to ensure that there is a yes vote in the UK.

So is everything in the garden rosy, well it is OK, but rosy? Growth is now been moved downwards by both the CBI and the Bank of England. In the last three months to April 2015, the goods deficit worsened, with exports falling more than imports.

David Kern, Chief economist of the British Chamber of Commere stated today “We need to ensure that our exporting businesses can compete on a level playing field with their competitors and, to help them do so, they need better access to finance. We also need to see greater focus on encouraging medium sized businesses to export and to increase their penetration in growing markets outside Europe.”

This statement has hit the nail firmly on the head, “access to finance”. We hear every week from manufacturers, large and small, they they are simply unable to access leasing or HP for any of their EU customers. Banks and UK based funders simply say NO as a default position. Is it any wonder that exports are dropping.

This month, we have launched a major leasing programme for a world wide manufacturer for increasing its sales in Europe. This has meant travelling throughout Europe presenting how leasing is a “sales aid”.  Germany, France , The Netherlands, and still six more countries to visit.  This company had tried leasing companies  in the UK, and asked many funders to help in Europe, all of them, including European funders said, no sorry, cannot help, or please call our Berlin office or Paris office, they might be able to help you. Sales aid, no, very much sales prevention !!

This is no exception, although most of our suppliers asking for European leasing, come from the EU. They know, they have to offer a complete European leasing package, not pass their valuable sales leads on an ” ad hoc ” basis to various funders in various countries.

At Oak, we offer the total european  equipment leasing solution, with almost every EU country covered, almost, well there are one or two exceptions, and we all know who they are at the moment!!  Our unique position as the leading european equipment leasing broker gives both customers, and suppliers the crucial help and support to finance that they require, not in the future, but right now.

The UK’s largest market European sales market is Germany, where in April 2015, we sold them £2.6billion of goods. They sold to us £5.1 billion. The Germans are very proactive in their sales approach in the EU, we simply lag behind them, thinking it is far too hard to sell in Germany. That is a myth, it could be that we do not present the sales process in a way that would encourage them to buy.

Remember when you were young, and learnt to ride a cycle, someone was always there to help give you confidence, just think of Oak as your “stabilisers” let Oak give you the confidence of seizing the opportunity of selling into Europe. Remember, most people will read this and say, no, too much trouble, we will stay as we are and just sell in the UK, forget about exports. You be the one that picks up the phone and says, ” how can Oak help us grow in Europe”

In the last few months, we have handled deals from Danish, Swedish, Norwegian, Finnish, German, Austrian, Swiss, French, Spanish, Dutch, and Irish companies. All of these are done deals, or ongoing vendor partnerships. The best part is that since January, five large UK companies have also launched their European leasing programmes through Oak, now I wonder, who will be the sixth?

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Fish and Chip words

Chunky chips on white background.

Availibility to funding, is the life blood in any growing business economy ,without the availability of loans, leasing, or overdrafts, business would slowly seize up ,access to funding is crucial for companies to expand, employ more , sell more, export more and generate profits.

Yet in the UK, funding in 2014 has been moribund. A few headlines about peer to peer lending are very attractive for a day or two, but quickly turn to fish and chip papers within a week. The facts are quite different and make a stark comparison, net lending to businesses actually fell by £6.9bn in Q4 2014.

According to the British Chamber of Commerce, ” Although large businesses have little difficulty in accessing a wide range of funding options, young,fast-growing businesses across the UK are still finding it unacceptably difficult to access the finance they need to grow their business”

The election campaign is a prime example , every party promising what they hope will drive the electorate into their arms. Yet after the election,there is one thing we all know, whoever will win says , what they found was not what they expected, and surprise surprise, pledges they promised will take longer..! Quelle surprise!! As Mark Knoppler in his lyrics, about the poet Basil Bunting wrote ” fish and chip words”
An election will always cause uncertainty,and uncertainty is bad for inward investment, many projects will be placed on ice, growth will slow. If growth slows, whichever party or coalition is in power, they will have a problem. That is why it is crucial that funding is made available to companies.

One of the main sources of funding for SME’s are leasing companies and leasing brokers. Yet we appear almost to be the “forgotten”. Leasing has provided the stimulus for growth for over 50 years, by enabling small and larger companies afford to acquire machinery and equipment that helps them expand their business and grow. Most companies say that dealing with their banks is hard work. The days when the bank manager knew his customers and fully understood what they required have long gone.Now, they often have very little idea on what makes a business tick, apart from an excel spreadsheet and form completion.

 

The people at the coalface are the leasing companies and leasing brokers; we deal with new starts every single day, we can help you structure a plan that will be accepted by the underwriters.  To put it simply, most of us having being doing this for many many years. You simply cannot put a price on experience and knowledge.

 

Whilst a spreadsheet is useful, it is not the ” be it all”, spreadsheets and projections are often just a finger in the air, and hope! Most leasing companies will know this and take into consideration all the other factors that you might not consider are worth mentioning. We have the flexibility to thing ” outside the box” That’s what makes leasing companies different from banks, we are not blinkered, just experienced people, who can make the difference to you.

Oak has found that many suppliers have thought about selling into Europe, but have again thought it would be too complicated. Europe is suffering from the same lack of funding from their own banks, the same legacy that our banks are under. Again by utilising leasing as a sales aid, will help your customers overcome the lack of funding.

So no matter if you are a SME in the UK or a supplier selling into Europe, you know where to come. Customers say that Oak are real people in the real world, the sort of people that you might need in your corner when you things are tough and full of objections . For straight talking leasing solutions, both in the UK or Europe , just call Oak, the equipment leasing specialists .

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Square pegs, and round holes!

Child's toy showing a quare peg and a round hole on a whie background

If  funding to SME’s was easy, the whole of the country would be moving ahead now at a far quicker rate than what it is currently travelling. SME’s are what really moves the country forward, gives it impetus, helps spread confidence. And confidence is highly contagious, it moves down the High Street, and Industrial estates. Suddenly everybody has a spring in their step.

In the real world, we are moving forward, and there is some confidence in the market, but funding for SME’s is still not really happening. Let us look at the Funding for Lending Scheme which the banks operate. Last year, in Q1, they missed their target by £719 million,  in Q2 they missed again by £435 million, in Q3, they missed again by £128 million, and you’ve guessed it, in Q4 missed by £810 million!  Nothing now will happen until after the election, so we all have to wait for the Autumn before matters will change.

The banks say the businesses are too new, under 3 years established, wrong equipment, no wheels on each corner, not painted yellow! Peer to peer lenders say they require at least first years accounts, now we all know that will take almost 2 years, so how do SME’s fund this shortfall? We have all heard the phrase ” computer says No”,well it is time to put that firmly into the dustbin.

The first thing I would say is that funding is available  from Oak Leasing, to brand new starts, recent starts, as well as established companies.Whatever the equipment, whatever the circumstances, we will try to help you. We are very good in fitting square pegs into round holes, nothing off the peg will do!, and it has nothing to do with the size of the hammer !!

Often SME’s will miss opportunities of selling into Europe, they think it will be difficult, and impossible to secure funding for their  European customers. However, some SME’s have the vision to move into Europe, we have been asked by such a company to arrange leasing for specialist shipping equipment into Europe. We have arranged this for the company within three days. Cross border leasing , and european leasing is  always available to you from Oak.

In a nutshell, don’t let the apparent lack of funding stop you from growing, talk to us, we are real people in the real world, and have the broad commercial leasing experience and pedigree that you require to help move your companies forward and grow, both in the UK as well as Europe. So if your bank or funder says ” Computer says no”just give us a call.

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Gaining an advantage in Europe in 2015.

The first part of the blog will appear quite boring, but bear with me, as once I paint the picture, the exciting part will appear.

Now for the boring part, the European Central Bank will in January publish is new monetary policy. I expect it go embark on full scale quantive easing to try and avoid the twin spectres of stagflation and recession in Europe.  The practicle effect of this is that the euro on the currencies markets will fall, and it tries to encourage growth in the Euro zone, and in some ways, protect the manufacturing companies in the euro zone from competition from outside.  In a simple sentence, selling into the Euro zone will be harder for any UK , US and Nordic countries, so the the cost of your equipment in comparative pricing will appear far more expensive that your European competitors. Here endeth the boring part!!

As you are aware, Oak is a leading european leasing company in Europe, and this will give you a crucial advantage if you are selling, or about to launch a vendor programme into Europe.

Firstly, you will not be disadvantaged by the softening of the euro, as we have funding partners who will benefit from this lower euro rate,and will pass on this lower rate, enabling Oak to reflect this to yourselves in the rates that we can offer in the Eurozone. This will help you to minimise the currency rate differential.

When competition is hard, the key to any vendor programme is to minimise the cost objection, and leasing is the perfect and proven answer to this objection. So to sumarise briefly, by using Oak,  we can help alleviate the softening of the currency, give you increased credibility to your customers by showing your awareness of the problems in the Eurozone, and crucially helping your market penetration.  Not too bad to start the new year with I think, but I would ask the question, has your existing funder or leasing company flagged up this to either your sales team or finance team? If not, have they taken their eye off the ball or simply looking at a profit opportunity?

I make no apologies about this blog being a hard push for business, this year we have linked up with three very large US companies, and two large European companies who use Oak to help them increase their sales in Europe. Next year, 2015, will be no cake walk, you have to have someone at your side proven leasing pedigree to guide you through leasing in Europe. Someone with years of experience, and someone with a finger not only on the pulse, but looking to the future with financial insight.

Whatever equipment that you sell, from IT, Audio, Scientific, Medical, and even Spa rooms, you know where to come for a tailormade european leasing programme. Come and join us in 2015, and let us take some of the pressure off your shoulders.

That’s it for 2014, lets look forward to making 2015 a cracker!!

 

 

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Where is the anchor?

I have been amazed over the last few months listening to politicians and commentators saying that the UK has to leave Europe.  What they really mean is that they wish the UK to leave the European Union, for as far as I know, to leave Europe, we would have to haul up our anchor, and then supposedly drift off into the Atlantic. The UK has been part of the continent of Europe for many thousands of years, and I have to tell them, continental drift takes millions of years !  These broad cliches and sound bites that they spin out, reflect their shortsightedness, and are very much playing to the gallery.

We all are fully aware that the EU as it stands needs to change in many aspects, but to leave, is fraught with dangers. Figures and statistics can prove anything to anyone, always has, and always will, you can make them support any side that you wish to take.

I am a firm believer in together is stronger. Scotland decided to stay togther with the rest of the UK. East and West Germany came together, and as a unified country are definitely stronger. Oak grew stronger by moving our leasing experience into Europe many, many years ago.

In the last two months, three very large US companies, two of which are household names have chosen Oak Leasing to be its European leasing partner. Is it because we understand the European leasing market better than most others, well yes; is is because we have the spread of expertise in our european leasing partners, enabling them to fully support their new leasing programmes in Europe, well yes again.

It simply boils down to this, together, with our leasing partner, we are stronger than being alone, together we can offer support in almost every European country, and together we can offer a complete leasing solution for any company or manufacturer who wishes to either set up or sell their equipment using leasing in Europe.

The FT last week stated that companies should speak out in favour of Europe, instead of keeping quiet. From Oak’s perspective, we have raised our head above the parapet.

For a comprehensive european leasing programme, look no further than Oak Leasing, straight talking, strong european partners, and successful european leasing programmes, that’s Oak.

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Low pressure spreading from the Atlantic

As the rain falls on yet another Bank Holiday, the general feeling in Europe is as bright as the UK’s weather!

In weather forcaster’s jargon, there is a large depression sweeping in from the Atlantic, this low pressure area will cause disruption to the countries that it moves over. All of the Euro countries will be affected in some way. Some of the larger economies will be affected quite hard. The main attention will be firmly on France and Italy. Here the general economic malaise and spectre of deflation is looming. You only have to look at Japan over the last decade to see what effect this has on a countries economy.

The UK is however looking quite bright, might have a few showers, but no major storms on the horizon. The economy has changed gear, and is accelerating at quite a brisk pace. More and more companies are now investing in their future, and accordingly using leasing as the chosen way to finance . As the most tax efficient way to acquire the use of equipment, this is hardly surprising. Leasing has always been a very accurate indicator of equipment sales and investment over the last 40 years.

The number of suppliers asking for a vendor leasing package to help them increase their sales this year is quite staggering. With cost the main sales objection, a simply leasing amount over say a week or a month, minimises the cost, and helps overcome the price objection. Nothing new there, as leasing has always been the best closing tool in any salespersons’s box .

Yet our main growth area is European companies asking for a leasing solution for their customers throughout Europe. With the looming low pressure about to settle over the Continent, leasing is proving to be the main driving force to help increase sales for companies. The suppliers vary from IT, Medical, and scientific, to audio visual, and airport fire tenders.

As with all weather related issues, there is always blue sky somewhere, and Oak is able to help you locate this patch of blue in whichever country that you require. So for the best weather in The UK or Europe, you know who to use, Oak Leasing, the UK, and European leasing specialist, we have invented the wheel, we simply find the correct tyre to help you accelerate your sales!

Posted in Equipment Leasing, European Leasing, leasing for SMEs | 1 Comment

Now is the time to use equipment leasing, not tomorrow!

As the UK economy starts to re-boot itself out of the latest recession, businesses are looking to invest in new equipment. Up to now, many companies only bought new equipment if the old equipment was unrepairable. But things have changed, companies are now investing in the future.

Coming out of such a recession is the best time to invest, and seize the opportunities that are available for growth. The other key factor is that bank rates and interest rates are at the lowest they have been for many many years.  This point neatly brings me to the crux of my article. Equipment leasing is a fixed repayment at the time of signing the agreement. So as Mark Carney, the Govenor of the Bank of England has already warned, that  bank base rates will start to increase over the next year,  from their historic low of 0.5%. The golden opportunity of obtaining your new equipment at the lowest rates for over a decade is here now, not tomorrow or next month or after the holidays .

 

Often, people think of equipment leasing as only applicable for machinery, or office equipment or IT hardware. Think again , 100% software, no problem, shopfitting and shelving, no problem, and in this sunny weather, air conditioning systems, no problem.It gets even better, Oak can arrange leasing throughout most of Europe, so if you sell into Europe, leasing is available for you to offer your equipment on a lease to your customers, and helping you close perhaps one or two extra deals per year that you would have lost.

 

Especially now as many European companies are finding that their existing credit lines in their respective countries have been reduced and cut back. We have an example of a very large US company, who sells capital equipment in the UK, and now we handle their leasing throughout Europe. We simply took the stress out of them trying to find an european equipment  leasing company is each country, they now have one point of contact to arrange their leasing throughout Europe. The best part is that it works well for both them and their customers.

 

If you really take your blinkers off, this is just the tip of the iceberg! With Oak, we can offer refinance on existing equipment or assets that you have, so that you can enjoy the lower rates that are available now, and free up cash for either working capital on new projects or opportunities.

So this Summer, dont let it simply drift past you, windows of opportunity are only open for a finite period, and then they close. Give Oak a call now, and let us keep the window open for you and enable you to seize your opportunities!

 

 

 

 

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