5 questions to Michael Hölzel: why is Sale-and-Leaseback especially beneficial at present?
Mr. Hölzel, as a fleet expert you are currently observing a great opportunity in fleet financing via Sale-and-Leaseback. What exactly is meant by this?
Sale-and-Leaseback is a modern form of off-balance sheet fleet financing, that enhances the cash flow and releases financing sources as well as administrative resources. Thanks to a Sale-and-Leaseback solution, tied capital can be turned into liquid funds.
How does it work?
The fleet management expert purchases the suitable vehicles in the existing fleet of a company and leases them back to the company right afterwards for a previously agreed, fixed monthly rate. Thereby, ALD Automotive takes over the complete processing. The company that uses this service therefore receives instantly available, free capital and benefits from a professional fleet management.
Why might this be a solution for many companies especially in the current time?
Because of the corona crisis and the related uncertainties, many companies hesitate to make bigger investments or want to optimize their financial ratios. This is where a Sale-and-Leaseback solution comes in, by giving immediate liquidity. Companies can strengthen and secure their core business that way. Also, the fixed leasing rates contribute to this, allowing better planning and budgeting. Since the vehicle remarketing at the end of the contract is outsourced, the residual value risk and the associated administrative effort are significantly reduced.
For whom is Sale-and-Leaseback the right solution?
Basically, it makes sense in all situations, where the liquidity should be enhanced. For example, as previously mentioned, if a major purchase or investment is to be made. But also, if a company wants to modernise their fleet step by step, or wants to integrate alternative drives and electromobility, Sale-and-Leaseback would be just right. In addition, it is especially recommendable for vehicles that are entitled to the deduction of input tax.
What are the prerequisites? Is there a minimum fleet size?
Potential vehicles are identified as part of the analysis. In particular, the age of the vehicle or the current mileage and the expected mileage are taken into account. Experience shows that it makes sense to consider this solution from a minimum quantity of 5 vehicles.