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Leasing: a rental and financing method in line with the circular economy

Published On 03.05.2018

Fifty percent of consumers in France say they would like to access more products through a subscription model. Access has replaced ownership through a massive shift in consumer mindset. BNP Paribas Leasing Solutions aims to drive these economic and social transformations by helping its partners adopt financing solutions that favor access and, by extension, the circular economy.

A beneficial system for a wide range of equipment

Leasing consists of renting an asset with the option of buying it at the end of the contract term for a fixed price determined when signing the lease. It is open to individuals, businesses and organizations, while it can also cover assets as diverse as a personal car, a combine harvester or an entire IT infrastructure. Central to this system is the financial organization that buys the asset from the manufacturer on behalf of its customer. In return, the customer pays a monthly rent as the lessee. 

This system offers many benefits: access to the latest models, no need to purchase or resell the equipment, budget control, optimized cash flow and even certain tax incentives. This financing model also makes it possible to acquire equipment when an immediate purchase is not possible or not desired. 

Leasing is the core business of BNP Paribas Leasing Solutions, the European leader in financing professional equipment. This subsidiary of BNP Paribas helps companies, professionals and institutions develop their activity by offering rental and financing solutions for various equipment: farming machines, material-handling vehicles, construction equipment, utility and industrial vehicles, technology and software, medical equipment, etc. 

BNP Paribas Leasing Solutions joins the Ellen MacArthur Foundation’s Circular Economy 100 (CE100)

The Circular Economy 100 program brings together businesses, public institutions, researchers and innovators seeking to develop the circular economy. BNP Paribas Leasing Solutions’ participation in this program illustrates the commitment of its teams to researching and promoting financing solutions to support businesses’ as they transition to sustainable new economic models. 

In addition, BNP Paribas Leasing Solutions’ industrial partners are now looking for ways to extend their equipment life, reuse equipment and increase recycling. 

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Leasing, a lever of the circular economy

Leasing has become a lever of the circular economy by aligning with sustainable development approaches and aiming to maximize the “reusability” of products and raw materials. This economic model offers an alternative to the classic “make, use, toss” model by creating reuse options based on repairing and reselling products.

Through its leasing activity, BNP Paribas Leasing Solutions also takes part in the circular economy—equipment used through a leasing agreement can be rented again to one or more customers to extend its life, while also recycling the equipment in an ecological and responsible way. 

Indeed, leasing represents a small revolution offering an interesting alternative to the usual choice between buying and renting. It’s a shift from an “ownership economy” to an “access economy”—or “on-demand economy”—in which access to an asset takes precedence over ownership. 

It’s a shift from an “ownership economy” to an “access economy”

Technology creates the access economy on a massive scale

Developments in technology have now made it possible to apply the leasing model to many asset types. On a broader scale, technology also enables renting and sharing durable goods, notably through peer-to-peer web platforms connecting equipment owners and renters. In 2018, BNP Paribas Leasing Solutions launched Kintessia, the first platform enabling professionals to rent and sell equipment for farming, transport, construction and public works. 

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