Leasing and installments can accelerate a green transition

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Published: June 2, 2023, 4:15 p.mNiels Jörgen Larsen, head of the leasing and installment business area at Danske Bank. In a strained economic situation, one of the biggest priorities for companies is to maintain liquidity in the company to manage cash flow. This often means that investments in new environmentally friendly technology are postponed to the future. But by financing new investments via leasing, the cash flow is not burdened and sustainable investments can be prioritized. – The advantage of leasing is that equipment costs are distributed over the life of the leasing contract. You don’t have to burden the balance sheet or cash flow with expensive acquisition costs and can therefore create room to switch to modern equipment, which can lower both operational costs and at the same time contribute to the company’s transition work, says Niels Jörgen Larsen, head of the leasing and installment business area at Danske Bank. The green transition that several companies are currently trying to implement often requires investments in new technology. Investments are also often assessed based on a possible efficiency gain with lower operational costs as a result. This is, for example, the case when companies try to reduce fuel-related costs by switching from fossil-powered vehicles to electric-powered vehicles. But another important driving force for change is the need to live up to future sustainability requirements and expectations from both authorities and customers. But new technology costs money. And in a macroeconomic environment with rising interest rates and declining demand, the financial calculus for investment may need to be revised. Financial leasing as a financing option is therefore a possible way forward. – Financial leasing means that you rent the equipment from the bank but retain the right of use. The equipment is purchased according to the company’s specifications, and the financing period is usually from three years and up to more than ten years, depending on the equipment in question. Almost all movable property can be financed through leasing. Another important advantage is that we can finance equipment upgrades during the contract period. For example, planned replacement of batteries and motors, concludes Niels Jörgen Larsen.

Facts about leasing and installments

The liquidity can be distributed over the entire financial life of the equipment You don’t have to use your cash or burden the overdraft with an expensive acquisition Often no additional security is needed for the financing The working capital can be used for current expenses instead of being locked in an investment It becomes easier to budget costs and cash flow Almost all movable property can financedRead more information about the difference between the two forms of financing:Business leasing – Leasing and installment payments on the company’s equipment (danskebank.se)

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In moments that determine the future, we have used financial power to help private individuals and companies make decisions and choose a path forward. With specialized advice, analysis and services, we work together with our clients to unlock the potential of people and companies. Regardless of whether you have plans for an exit or expansion and regardless of the situation you are facing, we are here for you.Talk to us about the company’s challenges and opportunities – welcome to Danske Bank. The article is produced by Brand Studio in collaboration with Danske Bank and not an article by Dagens industri

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