From software and streaming services to meal kits and clothing rentals, the concept of paying for access rather than ownership has disrupted traditional business models, offering consumers unparalleled flexibility, convenience, and cost-effectiveness.
As this paradigm shift continues to gain traction, another new “norm” is emerging: 'Equipment as a Service' (EaaS). This innovative approach holds immense potential for small and medium-sized enterprises (SMEs), enabling them to access the latest equipment and technology without the burden of significant upfront costs or the risks often associated with ownership.
At its core, EaaS is a subscription-based model that allows businesses to pay a recurring fee for the use of a vast range of essential equipment, from specialist manufacturing machinery to office furniture. Rather than purchasing these assets outright, SMEs can leverage the expertise and resources of alternative finance providers, who can manage the acquisition, maintenance, and eventual disposal or replacement of the equipment.
The benefits of this approach are numerous and far-reaching.
1. Preserving cash-flow
By eliminating the need for substantial upfront investments, SMEs can preserve much needed working capital for other operational needs. They can lease equipment that is vital to their business’ operations in a way that gives them financial flexibility and agility.
2. Access to the latest technology
In a rapidly evolving technological landscape, SMEs can stay ahead of the curve by continuously upgrading to the most efficient and advanced equipment.
3. Predictable costs
With a fixed, monthly fee, SMEs can forecast their equipment-related expenses more accurately, enabling better budgeting and financial planning. With predictable costs, SMEs can also upgrade equipment when they need to and in way that respects their cash-flow needs.
4. Maintenance support and insurance
Equipment finance providers often have an option for maintenance and insurance. Removing the responsibility of maintaining and servicing the equipment, frees SMEs up to focus on their core competencies. Whilst insurance is necessary, using an equipment leasing company’s means you don’t have to source your own.
5. Environmental sustainability
Upgrading to greener and more sustainable equipment as it comes on the market, will usually mean that your business will become more efficient and therefore more competitive. The impact of your business on the environment is also likely to be reduced which in turn will contribute to a more sustainable future.
To unlock the full potential of EaaS, equipment finance providers are extending their offering of the range of essential assets that can be leased.
Greater education and awareness are crucial so that SMEs understand the alternative finance options that are available and the advantages of using them. Regulatory bodies and industry associations also have a vital role to play in raising awareness. GRENKE Leasing’s has also launched its own Lease of Life report, which examines the role and state of equipment leasing in the UK. It is supported by research conducted on SMEs in eight main industry sectors around the UK, and round table discussions with some of our key equipment resellers about their own experiences.
If you’d like to know about how equipment leasing can benefit your business and unlock new avenues for growth and success, get in touch with the GRENKE team who would be delighted to assist you.
