This month Olen Hunter sat down with Prime Mover magazine to discuss the benefits of leasing.
“Running a modern road transport fleet is a huge financial commitment that can quickly tie up more capital than expected,” says Olen Hunter, head of PACCAR Australia’s newly founded leasing arm, PacLease. “You have on-going expenses like fuel, insurance and maintenance, but you don’t get paid with the same frequency. The resulting gap is one of the main issues transport business face here in Australia and around the world and the reason why they often get stuck in neutral.”
With the Australian economy caught up in a transition phase from mining-led growth to a more broad-based model, transport businesses are especially prone to suffering from constrained cash flow, says Olen, a leasing industry veteran who previously led PacLease Sales in North America. “Trucking is closely aligned with the economy at large, which is why the market has become so volatile as of late. Even those with a well-balanced business model now have to make sure they don’t fall into the cash flow trap.”
To counteract that development, Olen says leasing and renting equipment is now becoming a viable alternative to owning it outright, as it can avoid locking away capital and thereby restricting cash flow. Rather than applying working capital to purchasing a vehicle – or tying it up in long-term loans that reduce borrowing reserves – he says lease customers can put their money to work in programs directly related to their businesses’ growth and profitability; adding that the trend is spreading rapidly across the industry. “It’s a different way of thinking about business and people slowly realise that not owning equipment doesn’t mean a disadvantage for them.”
Read the rest of the article here http://www.primemovermag.com.au/featured/article/new-value-in-leasing or in the August issue of Prime Mover Magazine