One key trend likely to occur this
year is the further diversification of leasing companies – gone are
the days where lessors can afford to simply offer leasing products
to their customers. Like it or not, the leasing industry is slowly
becoming an asset finance industry.
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Indeed, at a straw poll at Leaseurope’s annual
convention last October, over half of the attendees agreed that the
industry needs to broaden its scope to satisfy customers in the
future. Another quarter said that they had already widened their
product portfolio to include other asset-based finance
products.
Although some of the larger players have
already integrated their leasing divisions with other divisions –
such as GE Capital, which brought its fleet, contract hire,
business lending, factoring and equipment finance divisions
together, or CA Leasing and Eurofactor sharing functions – it
remains to be seen whether smaller lessors will also develop their
product portfolio.
Certainly, some players in the UK market have
already started. At the end of 2009, Close launched Close
Commercial Finance, bringing together its leasing arm with the
bank’s factoring business.
Davenham and State Securities have also moved
to diversify their products in past years.
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By GlobalData“It’s an obvious move for both types of
companies – either asset finance companies going into invoice
discounting [ID], or factoring and ID companies going into asset
finance,” said Andrew Bullard, formerly sales director at State
Securities, and now head of business at Cashflow UK.
“But I haven’t seen as much movement as I
would have expected. It’s been done in a limited way, but I am
surprised there haven’t been more players.”
As the market starts to recover this year –
and as confidence returns to the marketplace – lessors across
Europe are likely to adopt this new growth strategy, cross-selling
more products to more customers. It isn’t a question of whether
this will happen, but when.
