- Vendor Programmes
- Captive Lessors
- Joint Ventures
Sales Aid Market
- Business Equipment
- Small Ticket
- Middle Ticket+
- Structured Finance
Vendor Finance Market
The vendor market is by far the most buoyant area in terms of NEW opportunities at the present time. Various Lessors are concentrating on developing manufacturer ties across a broad range of industry sectors. This includes financing for heavy industrial and commercial assets, but with an equally large demand in the hi-tech arena. Some players have also been seen to adopt aggressive residual value positions in the past, but this has somewhat fallen away given recent poor market conditions and greater cautiousness.. A good knowledge of the more complex / operating leasing issues is often essential in the “front line” - but with a definite shortage of qualified specialist personnel this is also opening up a considerable number of options for those individuals whose exposure has thus far been limited to the direct corporate market alone.
Many programme management and necessary supporting positions are being born out of already established and growing captives and manufacturer relationships, with new entries from the likes of the USA being somewhat limited over the past few years.
The medium term business intentions between Lessors and Manufacturers are often plagued with uncertainty. Many programme management relationships eventually progress to “true” joint venture status. Others are best termed “virtual JV’s”, whilst many relationships simply grow out of medium term programme agreements. This is a very active and ever changing arena, with many exciting roles available out of UK headquarters established as central operations for Europe.
Sales Aid Market
This is the high volume small ticket end of the market – with fast responding systems, communications and process support being the order of the day. Dealers and suppliers might often encourage a number of Lessors to pitch for business alongside each other, but we are now seeing a definite increase towards certain larger relationships being established (with many such Lessors having to provide pan-European solutions) on a sole supplier/programme basis.
With a considerable number of new players entering the market (a lot of those previously having limited their focus to direct corporate leasing) this is certainly a highly competitive environment. Underlying assets are spread across a broad spectrum, ranging through office equipment, PCs, Telecoms, CCTV, some medical, materials handling, engineering and agriculture.
A strong emphasis continues to rest in the recruitment of good account relationship managers in the “sales” side of this sector, particularly given what are very often long lead-in times for the identifying and establishing of new and worthwhile sales aid programmes. Not surprisingly, the back-office support staff play an integral part in the ongoing management and success of any given relationships. We are seeing a definite rise in opportunities, many of which happen to be found in the credit function of sales-aid lessors at the present time.
Direct to Corporate Business
This is an area where we have seen the most radical of developments in recent times. Certain small/middle ticket lessors have already very publicly retrenched their business focuses, with a concentration on reducing “on the road” salesforces balanced in some cases by growth in marketing via newly established or growing call centre operations. Others have chosen to channel most of their efforts through existing corporate banking offices. And we are also witnessing the huge impact of the internet / finance websites on this route to market.
Brokers have found the market a very difficult one since 2009 – with many lessors withdrawing their funding support, and with upward pressure on margins this sector has been extremely hard-hit. Many have downsized, or disappeared altogether.
A few stronger and better established brokers have succeeded in continuing to attract business directly from lessees, whilst also supporting a wide range of distributor/supplier financing arrangements across a broad range of assets.
The direct to corporate sector may be contracting at the present time, but we are confident that it will never find itself redundant. There are too many lessors continuing to succeed in this traditional business area (particularly within the IT/Technology Sectors) and too many talented individuals who are successful, and enjoy, this very arena. We are always handling assignments which can utilise these very same skills across all industries.