theLeaseBlog - Connection Network
International Leasing & Asset Finance Network
ESPECIALLY FOR NORTH AMERICAN EQUIPMENT LEASE BROKERS
When over viewing the European leasing landscape, early 2006, I noticed the following:
• larger vendor finance companies only have an appetite for vendor finance programs if the in country lease volume is substantial (say € 1 million+);
• their appetite is restricted to specific assets and we all know these categories (IT, transportation, office equipment, agricultural machinery, materials handling equipment etc.);
• finally, ticket sizes were a decisive criterion for the choice of entering into a vendor finance relationship (small ticket ‘flow’ business, or only mid and larger sized transactions).
Following a market survey, I decided to start focusing on internationally operating manufacturers in the professional ‘sound- and lighting’ industry, and I did so for the following reasons:
• sizeable number of manufacturers, all with country specific sales revenues that are too small to draw the attention of the larger lessors;
• excellent asset values and good re-marketing opportunities;
• individual transactions that are generally > € 50k;
• from a leasing perspective: a relatively immature segment – so importing features (e.g. tech refresh) from other equipment lease sectors appears attractive;
• (by excluding start ups) assumed credit approval ratios in the 60-70% range;
• a very sizeable network of individuals throughout Europe in senior positions with reputable financial institutions, built during 20+ years in international finance, would enable me to find a home for serious finance applications. Besides, I would offer finance transactions to these institutions on a ‘no cure-no pay’ basis.
Over the past 3 years, 8 international finance programs were concluded. A good example of one of these programs can be found at http://www.robe.cz/default.aspx?contentid=E2FCF620-048D-4058-B04B-1F28C8B51CEF&lang=9D2D0548-2D4A-46FB-8AB2-3E356457EE73
Apart from that, a sizeable number of ad hoc transactions were concluded.
And then came September 2008 and it did not take me too long to assume that we were heading for a crisis that would be worst then what we have seen in this industry segment in the aftermath of 09/11: a global drop in revenues of some 40% during 2002. My fears have materialized (parties in this segment continue to postpone serious investments in equipment for a while) and I do not yet see the light at the end of the tunnel. Of course, my company stays loyal to the existing vendor partners but it is clear that opportunities outside of this segment must be found in order to survive.
Now that’s where your company might come in!
May be you are responsible for running a vendor finance program with an equipment manufacturer in North America. May be your vendor has international operations (either direct or through a network of distributors). May be your vendor’s sales revenues outside of North America –especially on a country specific basis- are too small to be of interest for any of the larger European lessors. May be his average transactions are in excess of € 50k (we can’t handle smaller deals on an international basis). May be you can convince your vendor that there is merit in offering financing –especially in the current environment.
So may be you could enhance your value proposition towards your vendor. Your vendor could offer financing to his overseas customers. We would see more leads and both your company and ours could generate more income (scenarios to be discussed).
Now that you’ve come this far, you may as well let me know whether there is merit in the thought of pursuing this further. Thank you very much for your contribution to the discussion.
Best regards,
Frans Jansen
• larger vendor finance companies only have an appetite for vendor finance programs if the in country lease volume is substantial (say € 1 million+);
• their appetite is restricted to specific assets and we all know these categories (IT, transportation, office equipment, agricultural machinery, materials handling equipment etc.);
• finally, ticket sizes were a decisive criterion for the choice of entering into a vendor finance relationship (small ticket ‘flow’ business, or only mid and larger sized transactions).
Following a market survey, I decided to start focusing on internationally operating manufacturers in the professional ‘sound- and lighting’ industry, and I did so for the following reasons:
• sizeable number of manufacturers, all with country specific sales revenues that are too small to draw the attention of the larger lessors;
• excellent asset values and good re-marketing opportunities;
• individual transactions that are generally > € 50k;
• from a leasing perspective: a relatively immature segment – so importing features (e.g. tech refresh) from other equipment lease sectors appears attractive;
• (by excluding start ups) assumed credit approval ratios in the 60-70% range;
• a very sizeable network of individuals throughout Europe in senior positions with reputable financial institutions, built during 20+ years in international finance, would enable me to find a home for serious finance applications. Besides, I would offer finance transactions to these institutions on a ‘no cure-no pay’ basis.
Over the past 3 years, 8 international finance programs were concluded. A good example of one of these programs can be found at http://www.robe.cz/default.aspx?contentid=E2FCF620-048D-4058-B04B-1F28C8B51CEF&lang=9D2D0548-2D4A-46FB-8AB2-3E356457EE73
Apart from that, a sizeable number of ad hoc transactions were concluded.
And then came September 2008 and it did not take me too long to assume that we were heading for a crisis that would be worst then what we have seen in this industry segment in the aftermath of 09/11: a global drop in revenues of some 40% during 2002. My fears have materialized (parties in this segment continue to postpone serious investments in equipment for a while) and I do not yet see the light at the end of the tunnel. Of course, my company stays loyal to the existing vendor partners but it is clear that opportunities outside of this segment must be found in order to survive.
Now that’s where your company might come in!
May be you are responsible for running a vendor finance program with an equipment manufacturer in North America. May be your vendor has international operations (either direct or through a network of distributors). May be your vendor’s sales revenues outside of North America –especially on a country specific basis- are too small to be of interest for any of the larger European lessors. May be his average transactions are in excess of € 50k (we can’t handle smaller deals on an international basis). May be you can convince your vendor that there is merit in offering financing –especially in the current environment.
So may be you could enhance your value proposition towards your vendor. Your vendor could offer financing to his overseas customers. We would see more leads and both your company and ours could generate more income (scenarios to be discussed).
Now that you’ve come this far, you may as well let me know whether there is merit in the thought of pursuing this further. Thank you very much for your contribution to the discussion.
Best regards,
Frans Jansen
Tags: emea, equipment lease brokers, multiple countries, north america, programs, vendor finance
Add a Comment
4 Comments
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Comment by Frans Jansen on May 26, 2009 at 8:54am - Yes, in principle I can - I have contacts with two funding sources in Athens. However, transactions must be over Europ 100k. Best regards, Frans
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Comment by Gus on May 25, 2009 at 7:56pm
- can you do transactions in greece or cyprus?
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Comment by Frans Jansen on May 22, 2009 at 8:17am
- Kevin, thanks for your enquiry. As a result of the co operation that I have with some 8 internationally operating manufacturers, I have established funding relationships with financial institutions throughout Europe, as well as in Asia Pacific and North America. If you have any specific needs, please let me know. Kind regards, Frans
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Comment by Kevin Becker on May 21, 2009 at 2:58pm - are you speaking specifically about transactions in Europe, or are there opportunities for funding internationally?
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