The latest Bank of England announcement confirms that its base interest rate will rise from 1.75% to 2.25%. This takes UK interest rates to a level not seen since 2008 and comes amidst the rising costs of goods and energy which are already pushing businesses’ finances to the limit.
In light of the new base rate, resellers need to offer financially viable solutions to their customers who may forgo investment in new equipment if they can no longer pay large sums outright or secure a business loan due to the increased cost of borrowing.
Lease Group, one of the UK’s leading technology finance providers, is today calling for AV, energy and IT resellers to advise customers that currently operate with a capital expenditure (CapEx) model to investigate operational expenditure (OpEx) leasing models.
While partnering with an equipment and technology finance provider is common within the telecoms and printer resale sectors, the majority of resellers in other sectors including AV, energy and IT do not offer leasing options to their customers.
Simon Fabb, Director at Lease Group, commented:
“Economic downturn will force resellers to find new ways to appeal to their customers, so companies that do not offer leasing options could find themselves falling behind their competitors.
“We want to encourage businesses that don’t currently feel confident in offering lease deals to investigate the finance options that are out there, as leasing can make a business more resilient to the current market changes.
“Leasing has advantages for both resellers and the end user. Resellers benefit from sped up payment terms, and eliminated risk, as each loan is accepted directly by the bank. Customers are able to avoid the time-consuming process of applying for a traditional business loan and benefit from a saving of up to 19% in corporation tax, and lower interest rates as the loan is secured against the assets being acquired.
“Now is the time for resellers to investigate a leasing solution. Not only to protect their own cash flow, but to ensure that expenditure on new equipment and technology remains a viable option for the businesses they serve. Our team is happy to provide advice to resellers about the solutions available to their customers.”