Financing opportunities through leasing and a new development law

By Leonidas Stergiou

The companies in the sector predict a big boost in the financing of the real economy through leasing, through the new Development Law. However, the provision for the extension of leasing for real estate and mobile phones to individuals is estimated to take time, as groups will need time to prepare for the leasing of individuals, while, at the same time, there is not yet a sufficient secondary market for used (e.g. x. computers), in order to develop operating leasing for individuals.

Expansion in retail

Expanding leasing to individuals, for mobile and real estate, could be the next step in the market, which, however, still requires considerable preparation both technically and procedurally. As he explains in Capital.gr o CEO of Eurobank Leasing, Mr. Harris Vlachos, abroad, for example, one can acquire a computer by leasing, e.g. for 3 years and then acquire the next model. In this way he is not faced with the problem of technological depreciation of the equipment, having at his disposal equipment of new technology.

This, however, requires the creation of relevant ecosystems for the management of the equipment and the creation of another market that can be made through wholesalers, suppliers and retail chains, in order to offer the alternative of financing or operating lease, to receive the old model, to calculate the depreciable value, to resell it at a lower price as a second hand. Even to sell and price some electronic products as scrap taking into account their safe storage and recycling and all the requirements for the protection of the Environment.

Leasing real estate to individuals is slow

Respectively, the extension of real estate leasing to individuals, ie the acquisition of a house by a natural person, instead of, e.g. with a loan, it involves the same difficulties, except that it is an asset of higher value and greater risk. Therefore, the expansion of leasing to individuals and the creation of such a market will take time to develop, as market players will have to decide in which sectors and how they will operate and the feeling is that such an organized market is not expected. to operate immediately. Real estate in particular requires greater risk-taking and serious support, given the complexity of procedures and legal prerequisites for conducting real estate transactions.

Leasing does not apply to those who do not have access to bank lending

Besides, as Mr. Vlachos adds, leasing can be an alternative to bank lending, with tax and other advantages, but it is not an alternative for a business and an individual who does not meet the banking criteria. If, for example, an individual can not get a loan, of any kind due to banking criteria, he can not even get leasing. In addition, credit criteria and interest rates are at the same level as banking, with slight variations due to the nature of the leasing instrument.

For example, in bank lending the same participation is required, in leasing an increased first rent is provided. Also, in leasing there is no charge of 0.6% of Law 128175 on the interest rate. In addition, the VAT on the equipment is covered by the leasing company. The company that acquires the fixed asset through leasing at the same time can carry out depreciation, the lease is treated as the installments of the bank loan, while there is the advantage to acquire something new, without the risk of depreciation before the full depreciation.

According to Mr. Vlachos, the use of leasing is offered for the acquisition of specialized and medical / equipment, which can be quickly surpassed technologically. For this reason, Eurobank Leasing expands its collaborations with reputable suppliers in the field of automotive, electronic and medical equipment, in the context of creating relevant ecosystems Vendor leasing.

Development strategy

Besides, according to Mr. Vlachos, the development strategy of Eurobank Leasing is based on the dynamic and extroverted sectors of the Greek economy, such as Industry and Trade, financing most investments in the categories of machinery and equipment, while giving special emphasis to its sectors. ESG, with funding for the Electricity and Communication Networks Generations. Eurobank Leasing holds the first place in the sectors of industry and trade with market shares of 35% and 42% respectively, while it occupies shares of 42% in the categories of fixed Machinery and Equipment and 18% in Passenger Cars. The annual production of new Eurobank Leasing contracts amounted to 131 million euros (+ 42% compared to 2020), with the total production of the Leasing market showing an annual increase of 20% and amounting to 642 million euros (of which 165 million relate to real estate leasing). The company’s share in the new operations of the sector, excluding real estate, amounted to 26%.

Eurobank Leasing closed with positive financial results for the year 2021, with a doubling of production compared to the average percentage of the total market, while it expects further improvement in the coming years. Also, the transformation of ERB Leasing has been completed and the company has focused its interest, mainly, on the increase of new operations. Eurobank Leasing’s strategy includes the support and financing of any serious investment project, the support of Greek industry to renew its equipment, with the aim of improving its competitiveness, while special emphasis is given to the market of Northern Greece, where, traditionally, the company holds a significant share, added Mr. Vlachos.