Do you know what your leasing portfolio is costing you?
There is significant optimization potential hidden here!
As a trained banker who has focused primarily on structured finance and syndicated lending since 1999, I didn't get to know and appreciate the leasing business until 2015.
In practice, there are a few things that continue to surprise me:
One of them is that on the customer side, companies typically have an overview of
🔹 the total amount of their leasing liabilities,
🔹 but not what their individual leasing contracts and the leasing portfolio as a whole are actually costing them.
No help comes from the tax or finance departments, as they only capture leasing for their own purposes — calculating trade tax add-backs or disclosures in the notes, or as a "right of use" under IFRS 16 — and not for the strategic management and optimization of financing costs.
In practice, we therefore encounter (even among companies with strong credit ratings) an inexplicable price premium of 0.5 to 4.0 percentage points for leasing, even though leasing can be comparable to or even cheaper than other financing components!
Treasury departments are often unaware of this range in actual financing costs.
The conclusion from our experience:
👉 For LBOs and sub-investment grade companies, it is currently always worthwhile to significantly increase the share of leasing in the financing mix!
👉 With leasing — even for companies with the strongest credit ratings — optimization potential can always be realized!
Let's talk!
#LeasingPilot #Treasury #CFO #PrivateEquity #LBO #LeasingRechner
Do You Know What Your Leasing Portfolio Is Costing You?
