By opting for leasing solutions to finance equipment, a company outsources the risks inherent to ownership and thereby achieves significant savings, ranging from 1% to 5% of the original equipment value.
In addition, the services that usually come with leasing solutions can relieve the company of other indirect costs like repair, maintenance or upgrade, making it a smarter solution in comparison to a traditional loan or capital investment where a business would have to bear these costs in addition to those spent to acquire the equipment
Outsource the risk of breakdowns or poor condition
When you own equipment, you must regularly maintain, repair and even replace it in order to keep it in good working condition at all times. This is especially true for material that ages quickly such as electronic and IT equipment. Leasing allows you to avoid (totally or partially) these requirements: with each new contract, you are provided with a flawless and efficient product.
Moreover, our professional equipment leasing offers may come with various added services, like insurance covering the leased equipment in case of loss, theft, breakage or water damage. The financing of the product itself may also be covered in the event of death or total loss of autonomy of the company’s director. Risks related to equipment malfunction are also covered by maintenance services in a large number of contracts.
There is therefore no need for the lessee to earmark funds for potential faults in the equipment. Finally, the continued availability of assets with leasing reduces the risks of material depreciation due to use, which may lead to hidden costs.
Inspections and conforming to standards
There is another risk that is outsourced with the leasing option: material becoming obsolete due to its non-compliance with ever-evolving rules and regulations. For example: just like with private vehicles, a commercial vehicle is subject to periodic technical inspections conducted by an approved authority. For instance, a business using a leased fleet of commercial vehicles with fleet management services doesn’t have to worry about compliance, since the leasing company takes care of monitoring and maintaining the vehicles.
Equipment owners are sometimes forced to replace their material with newer models due to changes in legislation. This regulatory pressure applies to many types of equipment across various sectors: European standards on CO2 emissions from vehicles, European legislation on refrigerants, ban on the sale of halogen lightbulbs, and so on. In order to adapt to these regulatory changes, professional equipment lessees will only need to replace their models before the end of their lease contract, which has little or no impact on their budget.
Finally, obligations related to the end of the lifecycle of certain equipment don’t affect lessees, since they return their equipment to the owner, that is, financial institutions such as BNP Paribas Leasing Solutions, at the end of the contract. For example, under Waste Electrical and Electronic Equipment (WEEE) compliance, owners of professional goods placed on the market before August 13, 2005, are responsible for their disposal (by entrusting them to one of the approved eco-organisations)*. A business leasing its equipment, however, does not need to organise the end-of-lifecycle treatment of the equipment used.
Are you looking to outsource your ownership risk?
Contact us to learn more about our leasing solutions, with or without services!