vendor finance businesses
Company: Key Equipment Finance (Europe)
(KEF)
Name of the vendor finance (VF) head: Stewart
Good
Number of VF clients: 30
Countries you have VF operations in: 15
HQ of the VF business: Ascot (UK)
Total number of VF assets under lease:
50,000
Value of VF assets under lease: US$750m
Total number of vendor finance staff: 130
Total number of VF managers: 3
Total number of VF sales staff: 30
Average number of VF managers per deal: 1
Average number of VF sales staff per deal: 2
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KEF, an affiliate of KeyCorp, a US bank, while a relatively
small player, still has to cope with the high costs associated with
a pan European operation. Alun Richards, managing director of KEF’s
European region, said: “Europe is an expensive place to do
business, for example, the cost of employing people. You want a
cost effective system but you also need to understand the local
language and marketplace. We have front office staff in every
country in which we do business.”
It has a global front office system and, having recently set up
an Oracle-built back office accounting system in the UK, it is now
being rolled out across Europe over the next two years.
Unusually in the banking world, it takes residual value and
credit risk. Its average vendor finance deal totals US$400,000,
while they range in size from US$50,000 to US$25m, with 99 per cent
in the US$50,000 to US$10m range.
Company: BNP Paribas Lease Group UK (BPLG
UK)
Name of the vendor finance head: Mike Dix
Number of VF clients: 68,000 – 70,000
Countries with operations: Algeria, Austria,
Belgium, France, Germany, Greece, Hungary, Italy, Poland, Portugal,
Spain, The Netherlands, Turkey, United Kingdom.
Headquarters: Basingstoke
Total number of VF assets under lease: 120,000
(255,000 for BNP Paribas Lease Group SA)
Value of VF assets under lease: £1.1bn (BNP
Paribas Lease Group SA: €20.2bn)
Total number of vendor finance staff: BNP Paribas
Lease Group UK: 275 (BNP Paribas Lease Group SA: 2,385)
A lease specialist in agriculture, construction, IT, materials
handling, office equipment and transport, BPLG UK is no minnow, as
the figures above demonstrate. Last year its vendor finance deals
range from £500 to over £35m, with the average ticket being
approximately £20,000.
Company name: De Lage Landen
Name of the vendor finance head: Phil
Schneck
Headquarters: Eindhoven (Netherlands)
Value of VF assets under lease: 13.7bn Euros
Number of vendor finance staff: De Lage Landen
Group: 1992; Carlease: 442;
Consumer Finance: 23; Financial Institutions:
129
Number of VF sales staff: 1,398
A specialist in the leasing of equipment in healthcare, office
equipment, IT, communications, financial institutions and transport
sectors, De Lage Landen’s average vendor finance deal size ranges
between €25,000 and €50,000, which is comparatively small for the
European market.
Besides plans for continuing to grow its international presence,
it is also reviwing its back office procedures, particularly its IT
facilities.
The company has an advanced e-commerce system to process
applications and quotations efficiently right through approval
documentation to contract activation, and Ewald Jozefzoon, De Lage
Landen’s global managing director of marketing, says: “We invest
heavily in IT and run it in-house because we need to support our
processes in a consistent fashion.”
In 2006 De Lage Landen acquired Athlon Carlease, a car leasing
business with operations in seven European countries. To increase
efficiency it is considering sharing back office facilities with
Athlon if it enters new markets like Eastern Europe, and Jozefzoon
thinks there will be other opportunities for cross-selling.
Company: Siemens Financial Services
Head of vendor finance (VF) head: Peter
Austin
Number of VF clients: 2,000 in the UK
HQ of the UK VF business: Stoke Poges
(Buckinghamshire)
Total number of vendor finance staff: 150
Total number of VF managers: 25
Total number of VF sales staff: 50
The UK business of Siemens Financial Services does several
things to keep costs to a minimum. In doing so, it appears, it also
helps the business in other ways, particularly driving up customer
satisfaction. First, recently Peter Austin, its general manager,
moved to increase the number of people selling in the field. “We
would rather have more people on the road than customers having to
deal with a call centre. We believe in local offices in the UK and
have no plans to transfer operations overseas,” he said. This may
be a tried and tested method of operation, but should be considered
with other costs and efficiency savings activities. It also shares
back office functions across various divisions, and approximately
150 at any one time might be engaged in vendor finance
activities.
Third, in the UK it makes use of the so-called “‘ease-elease’
e-business solution” which enables users to get a quick credit
decision online so administrative costs are reduced. The product
cal also calculate rates with different profiles, load and manage
proposals in a secure environment, and upgrade existing agreements
online. Siemens claims it is the first of its kind in the market,
and now over 50 per cent of its vendor introduced business is
transacted online. Siemens is increasingly active across Europe,
and Austin talks-up its global strategic alliance with the IT
solutions provider, SAP. Developed to meet the growing demand for
IT financing tools, Siemens operates SAP Financing to offer
companies a long-term alternative to lump-sum payments for SAP
products and services, including hardware, software, installation
and training. With SAP Financing monthly payments are predictable
for up to seven years.
