Key Challenges Impacting Leasing Decisions

 

Can you afford not to use Oak Leasing in Europe?Economic Uncertainty

1.Global Economic Headwinds:

The global economy remains sluggish, exacerbated by geopolitical tensions, trade conflicts, and uneven post-pandemic recovery. Declining exports to major markets like China and the U.S. have particularly impacted Germany’s manufacturing sector.

2.Potential Tariffs and Trade Barriers:

Uncertainty over the imposition of tariffs, particularly on goods traded with non-EU countries, is causing hesitancy in capital investments. Tariffs could significantly increase equipment costs and disrupt supply chains, forcing businesses to rethink procurement strategies.

3.Inflation and Interest Rates:

Persistently stubborn inflation rates and elevated interest rates are discouraging investment. Borrowing costs remain prohibitive, particularly for SMEs, while financial institutions remain risk-averse.

4.Economic Stagnation in France and Germany:

France faces subdued consumer spending and high public debt levels, creating a drag on private sector investment. Meanwhile, Germany, the EU’s economic powerhouse, is grappling with slow industrial growth and labour shortages, limiting its ability to rebound.

Regulatory and Environmental Pressures

1.Environmental Regulations and Carbon Tariffs:

Stricter environmental regulations and potential carbon tariffs are compelling businesses to adopt greener technologies. However, the cost of transitioning to sustainable equipment remains a significant hurdle for many companies.

2.Technological Advancements and Obsolescence:

The rapid pace of technological change continues to present challenges. Companies are reluctant to invest heavily in equipment that could become obsolete within months due to advancements in automation, robotics, or digitalisation.

 

Sector-Specific Challenges

Capex under pressure, use Oaklease1.Industrial Sector:

The industrial sector, particularly in Germany, faces mounting pressure to modernise, but high costs and the uncertainty of returns on investment make it difficult to adopt automation and robotics on a large scale.

2.Service Sector:

SMEs in the service sector, especially in France, are struggling to access the capital required for upgrading equipment, further limiting their ability to compete.

 

The Investment Climate in 2025: A Challenging Outlook

1.Risk Aversion Among Lenders:

Financial institutions and investors are exercising greater caution, holding onto cash reserves and focusing on compliance with stricter regulations such as Basel III.

2.Shifting Venture Capital Trends:

Venture capital continues to prioritise investments in AI, software, and digital solutions, leaving traditional industries like heavy equipment and manufacturing overlooked.

3.Tariff Risks:

Businesses in Europe are factoring in the potential for new tariffs on imports and exports, which could significantly increase operational costs and reduce profitability, further discouraging investment in high-cost equipment.

 

How can Oak help your sales team?

Sales are based on features, advantages, and benefits. By minimising the amount required that a customer has to consider, not say €84K, but a quarterly rental of €4,762, just under €53 per day you are minimising the cost objection over the advantages and benefits of your equipment. The larger the equipment cost, the better the monthly rental will appear.

For €84k, your customer will automatically ask the question, what is the best discount you can offer, but if the cost is presented as a rental, there is less of a pushback from the customer.

The customer can upgrade his equipment to the latest at any time during the rental period, overcoming obsolescence.

Why use Oak?Europe's leading equipment leasing broker Oaklease

1.With access to over forty European funders, we have the robust financial capacity to fund your customer’s requirements.

2. Oak covers thirty European countries, local documentation and support.

3. Established for over thirty years

You will not win every opportunity that may come your way, but by using Oak, you will close more sales, and at a better margin.

Look what our suppliers say,

Video call Oaklease

As a leading worldwide precision CNC manufacturer, ANCA provides our customers with crucial production elements with our machines and technology. Our customers require quick and flexible decisions to optimise their capacity. Oak is a crucial ANCA partner to this end. Their professionalism and excellent funding network make them an ideal finance partner for efficient and effective financing throughout Europe.”

Martin Winterstein,  Managing Director, ANCA Europe GmbH 

We are available on Teams, Zoom, FaceTime and Meet, why not give us a call just like Martin did, he knew where it would lead!

 Check these case studies below

Oaklease Case Studies. Insight into European Equipment Leasing 2024