Leasing economy

Andreas Mühlbauer,

Leasing share at record level

With a leasing share of 54.8% of externally financed capital expenditure, the leasing industry set a new record in 2017. Never before have companies realized such a high proportion of their externally financed investments in machinery, vehicles, production facilities, etc. - i.e. not financed via internal cash flow - through leasing.

"Leasing clearly dominates all forms of external financing," comments BDL Managing Director Horst Fittler on the results of the ifo Institute's latest calculations. "Leasing has long been more than just financing. Supplementary service offers, especially in vehicle and IT leasing, are the decisive factor for many companies to opt for leasing," Fittler explains the high rate. Full-service leasing takes the pressure off customers and frees up time for their core business. "Leasing also ensures that the equipment is always up to date. With technology cycles becoming ever shorter, this is an important motive for companies," says the Managing Director, explaining the success.

At the turn of the millennium, the share of leasing in externally financed investments had already exceeded the 50% mark. In 2017, the figure increased significantly compared to previous years (2016: 50.9%; 2015: 51.8%). According to estimates by the ifo Institute, the ratio of external financing to overall economic investment expenditure is currently likely to be significantly below its long-term average. In terms of overall economic investment in equipment, externally and internally financed, the leasing share is currently 24.1%.

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The ifo Institute defines external financing as "the raising of capital outside the company, namely deposit or equity financing (e.g. issue of shares, contributions from shareholders) on the one hand, and debt financing (e.g. bank loans, loans, public funds) and leasing etc. on the other."

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