We have been in the ICT equipment financing business in Ireland for more than 10 years, specialising in leasing contracts for small and mid-size businesses and working with trade partners, both resellers and distributors. Most of that time, as we all know, was characterised by lean times and cash flow difficulties for most Irish businesses, in the ICT sector as well as generally. A large part of our success has been recognising and responding to those recessionary problems throughout a time when banks and other financial institutions were, by and large, simply not in a position to be responsive.
That in turn was based on the financial and trading strength of our German parent company the GRENKE Group, a 35-year old company and plc since 1997, quoted on the Frankfurt SDAX exchange. With that backing, GRENKE in Ireland has been trying hard to offer a higher degree of flexibility to our clients than any other finance house. We can tailor leasing solutions to the needs and circumstances of each client. We pride ourselves on a personal, local service which is why we have Dublin offices in both Sandyford and Santry and in Cork and Belfast.
We are not a big ticket finance company. Today we have more than 10,000 current individual lease contracts on our books, with some 7,500 clients and an average lease value of about €9,000. That principally involves any type of ICT kit, typically servers, SANs and some specialist equipment. Our SME business extends also to general office equipment and furniture, telecoms equipment, CCTV and some medical, dental and laboratory investments in specialised apparatus. More recently we have even extended into catering equipment and ‘white goods’, although strictly on a B2B basis for hotels, restaurants and large canteen franchises.
What does flexibility in leasing mean? There are a number of elements, but one that arises quite often is early termination, often combined with equipment refresh so that an item or set of technology is replaced by the latest version. Additional finance as required is normal practice for us, either on an ad hoc basis or as part of drawdown against a Master Lease contract. This enables a business to draw up a road map for its development and growth but only commit financially as the need arises.
Clearly, the financial benefit of our range of services to any business is eliminating the necessity for capital investment in favour of fixed lease repayments — Capex becomes OpEx
Our general route to market is through trade partners but we also deal direct, predominantly, through that Master Lease drawdown. A third line of business is our unique Service Collection facility. In essence, a client can pay for both the equipment and an ongoing service agreement from one of our provider partners. The payment from the client is taken as a single amount with the service element being passed to the partner.
Clearly, the financial benefit of our range of services to any business is eliminating the necessity for capital investment in favour of fixed lease repayments — Capex becomes OpEx. It also enables smaller service providers — and most of the regional companies in Ireland are SMEs themselves — to offer the winning combination of equipment financing and the ongoing service.
Eoin Christian is Country Manager of GRENKE in Ireland
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