Effective Leasing Models and Market Trends for 2023

Effective Leasing Models and Market Trends for 2023

by Renia Kydonopoulou, Financial Applications Manager at SingularLogic

Modern leasing models offer opportunities for growth, flexibility, and cost reduction. Enterprises choose these models based on their fixed assets, sector of activity, business needs, and available capital.

Classic solutions such as operational and financial leasing will continue to exist. However, the new models we expect in 2023 are those of sale and leaseback, which allow enterprises to release capital tied to fixed assets while retaining their use, and pay-per-use leasing, where businesses can lease vehicles or equipment and pay according to specific usage metrics related to the fixed asset, as well as managed services leasing, where the lessor not only provides the asset through leasing but also takes responsibility for managing and maintaining it throughout the lease term.

Beyond the traditional reasons why a business chooses leasing, such as converting capital expenses to operational expenses or facilitating investments without high upfront costs, today, companies have more reasons and benefits from leveraging leasing capabilities, such as:

• Increased liquidity and stable cash flow

  since it doesn't need significant upfront payments to acquire an asset.

• Low initial cost of leasing agreements,

  which mainly aids a business at its inception.

• Technological development,

  enabling frequent equipment renewal after a usage period facilitating the transition to newer-generation equipment and assets.

• Rapid depreciation of a fixed asset

  immediately after its purchase

• Reduce financial risk

  with relevant insurance programs, which most leasing companies now provide.

• Tax benefits

  deriving from the use of leasing agreements.

• Increased operational demands

  lead businesses to adjust lease agreements with lessors' flexible leasing arrangements.

At SingularLogic, we have implemented numerous IT projects for leasing companies with our Digital Tools for Leasing Management by the CFMS platform.

The CFMS Leasing solution is scalable, contemporary, and encompasses all the necessary functionality the industry requires. Moreover, it can be enhanced with other CFMS platform solutions, such as Debt Collections Management and Legal Management, further strengthening financial sector businesses' efficiency and competitive advantage.