Solution
Vendor lease is a financial product allowing suppliers of equipment (e.g. cars, forklifts, agriculture machines, computer equipment, copiers and printers, etc.) to offer rental or leasing contracts as part of their business model. Usually, other related services are offered in parallel, such as maintenance, whether or not integrated into the rental or leasing contract (principle of one-stop-shopping). Equipment sellers use this financing product to simplify the customer's buying decision and shorten the decision time. Thus, the vendor lease can be used as a marketing tool to boost your sales (*).
How does it work?
1. You enter into a contract with us so that you can offer your customers rental or leasing solutions for the financing of two types of equipment:
- Technological equipment such as IT equipment (hardware and software), medical equipment, telecoms and copiers, but also vending machines, ‘green’ assets (LEDs, solar panels, charging stations) and monitoring equipment.
- Logistics equipment and solutions: construction, agricultural, loading and unloading machinery, light commercial vehicles, forklifts, agrifood machinery.
2. You integrate the leasing contract (in the form of financial leasing, financial rental, or operational leasing) into your sales process.
3. There are both financial leasing and operational leasing. Usually, additional services are offered, such as maintenance. The 'vendor' or 'equipment seller' can organize this activity independently, although in practice this is usually done in collaboration with the leasing company.
Advantages
- You become supplier of a total ONE STOP SHOPPING solution.
- More sales: you make it easier for your customers to buy the equipment.
- Customer loyalty: you strengthen the relationship with your customer by offering a global solution adapted to his specific needs.
- Simplicity and security: no credit risk, reduced administrative costs and rapid processing of financing requests by a team of experts.
- You preserve your margins.
- Digitalized management thanks to the ‘Lease Offers’ communication tool.
Good to know
- Your business must have an annual turnover of at least 2 million euros.
- The leasing volume is at least 200,000 euros per year.
- Vendor Lease gives you access to financial leasing (on balance formula) and financial rental (off balance formula).
- For IT equipment (or high-tech installations), the lease duration is 18 to 36 months.
- The purchase option for financial leasing on balance is approximately 1%.
- There is no purchase option in the case of financial rental.
- For industrial equipment, construction and agriculture equipment and light commercial vehicles, the lease duration is 24 to 84 months (or even more in certain cases).
- The purchase option for financial leasing on balance is 1 to 15%.
- For financial leasing off balance, the purchase option is higher than 15%, but there is also a formula without purchase option. This is called financial or operational rental.
Useful link(s)
(*) Vendor lease is offered by BNP Paribas Leasing Solutions, a specialist subsidiary of the BNP Paribas group.