Flexible financing and leasing schemes could hold the key to unlocking new catering equipment sales, making it easier for operators to purchase vital kit for their kitchens, say leading industry figures.
ITW – the owner of brands such as Foster and Hobart – has just set up a UK division to manage the full cost of customers’ purchases, meaning there is no credit risk to dealers and they will see the full invoice value in their books.
Adande, Williams Refrigeration, Quintex Systems and Synergy Grill have also announced leasing schemes to specifically help operators with purchases as the industry gets back on its feet after lockdown.
Simon Frost, director at Hoshizaki UK, believes the automotive sector offers clear evidence of how powerful innovative financing schemes can be in stimulating transactions.
“I think it’s the future, personally – you only have to look at the automotive industry and the way that has been transformed in terms of new car sales. People don’t buy cars anymore, they lease them or they have these PCP contracts, and I think that will probably be the saviour of the automotive industry as we come out of lockdown.
“I think that looking at innovative ways to finance equipment for operators, and through dealers that we work with, is absolutely the way forward because, let’s be honest, capital expenditure is going to be squeezed, people are going to be looking at anywhere they can to save money but they still want to progress their business. So to have some kind of cost-effective way to be able to finance that is going to be a real bonus.”
Although concepts such as leasing are not new to the catering equipment sector, there is a growing consensus that the current economic climate makes them more attractive to users than ever before.
“I think the onus will be on the finance companies to promote the best sort of rates that we can then give to our customers,” continued Mr Frost. “We have looked at it before but we tried to do an interest-free offering that wasn’t quite geared in the right way and it didn’t really capture the imagination, but it certainly works and Hobart and Foster have certainly demonstrated that there is a market place for this to work. We need to find a similar series of actions that we can promote as well because I think it is definitely the way forward.”
Mr Frost was speaking on this week’s episode of Market Talk, which also featured Peter Kitchin, managing director of kitchen house C&C Catering Equipment.
He also agrees that the availability of more financing options can only be a good thing.
“I don’t think we use them as much as we should. We insure all of our debts – we’ve got an order for a job with a massive builder and we can’t get any credit on them even though from memory I think they had £480 million in the bank last year, so incentives like that are good.
“Jack Sharkey [managing director of Vision Commercial Kitchens] told me about a lease company that’s really good and gave me the contact details. Any tool like that is great. What we want to do is if someone’s opening a pub or bar and we need £50,000 worth of stuff, if you can do it on some kind of a [financing] agreement with Hobart or whoever then that’s great.”