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Business advice: leasing and invoice financing in Ireland

Cash flow management is one of the biggest challenges for any SME. Business is strong, but you are waiting on payment from your customers. Or you need some equipment that will improve business, and ultimately your cash flow, but you just don’t have that cash right now to invest.

Of course, banks can offer loans to help with these situations, but such finance isn’t always straightforward to come by. You’ll typically have to produce documents such as a business plan, and generally speaking there is a lot of paperwork involved. And in some cases, for whatever reason, you simply don’t want to approach your bank.

We all know that purchasing equipment can be one of the biggest drains on cash flow. But purchasing isn’t always necessary. And it certainly isn’t always the best option, as it comes with other headaches. For example, when it comes to purchasing equipment that becomes quickly obsolete, such as IT equipment, how much it will cost to replace when it becomes outdated?

Leasing items such as IT equipment

Leasing is a great alternative to purchasing. Leasing allows you to deal with technology obsolescence much better. If it’s time for an upgrade, you can simply return the equipment at the end of the lease.

Leasing offers the obvious advantage of requiring less cash up front, and the cash outlay is lower as you are only paying for the use of the equipment. Although you will have the option to purchase at the end of the lease, if that is something you require.

Improve liquidity with invoice financing

Another way to address cash flow issues is with invoice financing. Also known as factoring, it allows you to raise money from funds you expect to receive. Essentially, you are selling your uncollected invoices at a discount in order to access the cash straight away.

We recently came across a company that offers both leasing and invoice financing to Irish businesses. Grenke started out in 1978 in Germany, but they also have significant knowledge of the Irish market, as they have been operating here for 12 years. They are not affiliated with any bank and financed €1.7bn in 2015.

Grenke: leasing and invoice finance

You can get pre-approval for a significant amount of leasing in advance, with Grenke’s Master Lease product for IT equipment. This means you get a preferential rate, and can also add equipment as you see fit over the year, without having to get approval for each individual item as you add it. And you won’t have to go through multiple credit checks. This product is ideal if you are planning to spend more than €25,000 on IT equipment over the next twelve months.

Grenke offers leasing on a wide variety of equipment for your business. This includes IT items such as PCs, laptops, copiers, printers, and even software, but also things such as office furniture, telephone systems, and alarm systems. The range of equipment you can lease with Grenke is significant, but what if you require funds for some other reason – expansion, for example?

For this, Grenke offers invoice finance. This service offers prepayment against sales invoices which you have not yet received payment for. The obvious benefit is you can improve liquidity quickly, without having to turn to the banks. There are numerous other benefits too. Grenke’s invoice financing service means you won’t have to spend as much time chasing up invoices that are due, which can also save you money. Getting the funds is extremely quick; they can get the funds to you within 24 hours. And the prepayment rate can be up to 90%.

An online solution from start to finish

The terms Grenke offer are impressive, but one of the big things which sets Grenke apart is the technology they use to deliver their products. Grenke’s customer portal stands out. From start to finish it makes the process very straight-forward. When it comes to getting leases approved, this can be quickly done online. Grenke’s esignature option means you don’t have piles of paperwork to sign. You don’t even need a printer. With a few clicks you can agree the contract online.

It also offers easy management of your existing contracts with them. It allows you to deal with the basics easily, such as updating contact details, which can be done in just a few clicks. It also allows you to handle trickier aspects of your leasing with ease. For example, the portal allows you to easily submit claims to Grenke’s insurance department for equipment that is lost or stolen.

We’re really glad to see that Irish SMEs are getting better access to financing alternatives. Grenke isn’t the only company offering alternative financing solutions like these, but Grenke are specialists in both leasing and invoice financing, and their customer portal allows users to go through the process without any stress.

If you’d like advice about how your business could benefit from the different types of financing solution now available in Ireland, contact us today!

Rory