Leasing of production equipment showing constant growth

The leasing market expanded by over 16 percent in 2007, compared to 2006. Financing of real estate and equipment have been the main driving forces behind growth. 15 new specialised leasing companies appeared in 2006-2007, reducing the combined market share of the leading nine companies from 77 percent to 71 percent. As Anikó Mikola, head of CIB Lízing Vendor has told us, leasing is a very popular form of financing among SME-s, often being the only form of financing accessible to them. The organisational structure of the machinery and equipment division has been built up by CIB Lízing in accordance with the types of equipment. They have separate departments for agricultural machinery, medical and cosmetic equipment, general machinery and equipment financed through vendors. An increasing role is played by the leasing of equipment. The liquidity and cash flow of the client are the primary considerations in risk assessment, but are treated less exclusively than in traditional risk assessment. Another important factor is the assessment of the secondary market for the equipment to be leased. As clients pay their fees in the currency of their respective agreements, the strengthening of the HUF has not had an effect on profitability. When SME-s apply for government subsidised financing, it is a precondition that equipment to be purchased should become the property of the applicant within two years, which means that only financial leasing with a two year term can be offered. However, this is not a user-friendly arrangement. In order to remedy this problem, a special product has been developed by CIB Lízingcsoport, where the equipment is encumbered with a ingójelzálog. Further growth depends on the conditions determined for EU financing and the speed of assessing applications. As Jelena Lejtasz has explained, SME-s often build their development plans on such financing.