The equipment financing and leasing paradigm has shifted in Australia. Before, small assets such as commercial kitchen equipment and computer hardware were difficult to finance as the property was unregistered and therefore at high risk of being sold with the financier losing money.
This all changed with the introduction of the Personal Property Securities Register allowing companies to register details of security interests in personal property. This has created a niche market for small equipment finance. Finally, Australia is able to replicate and emulate the proven business model that has been operating in New Zealand for the past 10 years, and the US for 20 years.
“The new PPSR has substantially removed the risk of unauthorised sale of assets reducing credit risk”, says Managing Director of Broadway Leasing, John Dear, who outlines how systems, processes and understanding the customer helps reduce risk, “Since launching we have experienced no losses and have no arrears above 30 days. This is because we understand our customers and can quickly assess their risk profile to make a quick decision.”
Mr Dear explains how the Broadway Leasing business was born from customer frustrations. “Banks can’t handle small transactions under $30,000, their overheads kill them. So they frustrate the customer in his desire to move quickly because they are slow to make a decision”. This is where Broadway Leasing becomes the go-to partner for finance brokers who want a small simple transaction completed quickly with the minimum of fuss. Broadway Leasing have systems in place to facilitate a quick turnaround policy that delivers a fast credit decision with approval within 24 hours, and paperwork completed within 48.
Broadway Leasing has experienced substantial growth in its business since it started in the middle of the GFC. “In 2012, demand for operating leases and equipment finance was so strong that our only barrier to growth was the size of our capital base.”
Strong interest has been received from around the country since listing its capital raising offer on Wholesale Investor. The main aim to sufficiently capitalise the company for significant growth. “We have a strong network of 600 ASIC-accredited finance brokers that package applications around the country – we have only been able to activate 25 of these due to capital constraints.”
There are strong financial fundamentals that underpin a solid return on investment, “We have 50% Return on Capital Employed, and there are 3 or 4 public companies in our space that are outperforming the market with profit multiples of 10 and above. There is ample room for Broadway, with much unsatisfied demand that can be captured by us”.