Your banks no longer want to extend your credit line?

Your banks no longer want to extend your credit line?
Even then, lessors can still provide new liquidity on an asset-based basis!

A reluctant stance from your banks is hopefully a fictional scenario for you – but unfortunately, it is one that an increasing number of companies are currently facing.

Are you noticing this too?

Recently, there has been a growing number of voices, studies, and podcasts lamenting that banks have become more restrictive in their lending decisions.

I believe this reluctance is understandable in the current economic climate – not least because banks are currently experiencing painful lessons about the defaults they face despite having collateral in place.

👉 Make use of alternatives in good time and diversify your sources of debt financing!

👉 Compared to banks, leasing companies are in a privileged position, as they legally obtain a significantly stronger collateral position with respect to the financed assets.

This also explains why leasing companies can assess the value of tangible assets such as machinery and factor that value into their risk decisions as a risk-mitigating element – in extreme cases, this can extend to purely asset-based financing with no regard for the borrower's creditworthiness.

👉 Banks and leasing companies therefore operate under different conditions and should consequently take on different roles in your company's financing mix.

You know the value and longevity of your assets best!

Leasing companies can understand and account for this asset value in their risk assessments. Banks do not evaluate your machinery – they evaluate your balance sheet.

So make use of banks and leasing companies where their respective strengths lie, and don't let things reach the point where you might hit your limits with the banks.

👉 Finance assets from the outset with maturity-matched #Leasing!

👉 Convert assets that have already been acquired – and perhaps largely depreciated – into liquidity through #SaleandLeaseback.


#LeasingPilot #CFO #Treasury #CorporateFinance