How Pay-Per-Use is Transforming Asset Financing

Many companies have experienced a lot of volatility in their revenue streams over the past year. COVID-19 has impacted specific sectors differently, and it is questionable whether certain sectors will ever recover to pre-COVID levels.

We are seeing a major shift in attitudes from businesses and manufacturers coming out of this COVID-19 crisis. The need to meet new customer demands, reduce risk and increase flexibility are all top of mind for companies that are considering acquiring new assets and now very much in focus for manufacturers who are selling these assets.

Businesses are looking to better match their revenue streams with their expenses and move away from traditional ownership and committed funding methods. Many inherent business costs can be insulated, but many fixed costs can be left exposed, putting pressure on cashflows and budgeting especially where a business experiences seasonality or fluctuations in demand.

These companies now want new innovative funding structures that align the assets to their actual usage, so that the amount they pay for those assets becomes a variable cost that matches more closely with the ups and downs of their business.

In addition to this, new lease accounting guidelines means many businesses find traditional funding methods are increasingly at odds with their treasury strategy. They are seeking more innovative ways of funding their assets and equipment in a way that does not impact their balance sheet.

DLL’s Solution

DLL's new Pay-per-use customized funding products allow DLL to work in partnership with its customers to create funding structures that align with their business model and any accounting requirements they must abide by.

The innovative Pay-per-use funding model relies on historical and predicted forecast data and telemetry to enable the client to right size and optimize the fleet through the working life. The potential removal of fully committed payments means that DLL has a vested interest in making sure the assets will be put to good use.

DLL takes a business partner approach and focuses on the asset chosen by the customer to enable the creation of a bespoke usage payment model for the asset. This could mean paying for assets by the mile, hour, day, kilowatt, lift, compaction, or specific output to align the rental payment to the actual usage of the asset.

DLL’s Pay-per-use products can be used as standalone funding products so that the customer remains free to arrange their own servicing in-house, or if preferred, they can also be set up to include service and consumables so that the customer has a bundled one-stop shop if required.

Users of hard assets are seeking true flexibility and alignment in today’s economic climate, and DLL’s Pay-per-use funding products help customers adapt to the new financial reality. If you are interested in learning more about Pay-per-use solutions, please contact us here.