Firstly, is the industry right to worry? A glance at the latest national business confidence and economic trend indicators would imply so. The Organisation for Economic Co-operation and Development (OECD) produces an aggregated business confidence indicator and this clearly shows that the UK is showing a steady, if gradual decline in business confidence. The Purchasing Managers' Index published by the Chartered Institute of Purchasing and Supply dropped to 50.4 in April, down from 52.1 in March and 52.5 in January (where 50 is the mark that separates expansion and contraction). Similarly, the Institute of Chartered Accountants' (ICAEW) Business Confidence Monitor shows confidence to have fallen consistently since Q2 2007 and now puts it at an all-time low.

So perhaps it will not come as a shock if credit conditions do tighten, especially when it comes to vanilla bank credit. The problem is that during the recent years of inexpensive credit, many firms across the UK have become over-reliant on bank credit and have not diversified their credit lines. Usually, it is prudent for businesses to complement bank credit with a range of other forms of finance, which serves to balance risk exposure and offer protection from economic extremes. One financing method that should form an integral part of the working capital toolkit is lease finance.

Vending operators who are worried about their own bank credit lines would do well to bear this in mind. Also, they are perhaps concerned that their customers may delay investment decisions due to similar financial fears. This presents an opportunity to work with a finance partner to help customers to make greater use of financing options open to them. Generally, this chimes with wider calls for a greater focus on efficiency in business investment - and operators who can help their customers take control of financial management will certainly steal a lead on the competition. But harnessing leasing to the full also helps operators gain a host of other advantages aside from enabling customer affordability.

It is fair to say that integrating finance into the sales process is well embedded in the vending industry - but I still believe there are many opportunities to take this one step further. A leasing-based approach can produce more profitable, long-term customer relationships, as they become viewed as a ‘one stop shop' to facilitate investment in the latest equipment and services. With or without the credit crunch, operators who use leasing help customers afford a higher specification solution and also leave the door open to ‘upselling' - as associated costs (hardware, maintenance, insurance, consumables, etc) can be included in leasing contracts.

In summary, we expect a marked swing towards asset finance-based services over the coming year, as leasing is increasingly viewed as a prudent and sustainable form of finance. The credit crunch is already driving interest in alternative options to bank credit - but whether or not we see further tightening of credit conditions, vending operators stand to reap substantial rewards by maximising the usage of finance in their sales process.

www.siemens.co.uk/financialservices

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