A clever solution to the problem of funding gaps in supply companies is described by Mrs. Marlene Brockmann in an article published in the Financial Times Deutschland (FTD). The author deplores that in particular suppliers more and more often have to struggle with financing problems. Although these companies benefit from increasing outsourcing by their customers, they also have to bear the risks and preproduction costs until the product has been supplied. According to the author, quite often development costs are covered only when new products are paid or licence revenues flow in. Until then the preproduction costs weigh heavily on the balance sheet and therefore also on the financial rating of these companies. If the worst comes to the worst, there would even be a liquidity gap threatening the very existence of the company.
However, according to Mrs Brockmann, this gap can be closed by a leasing agreement. It works as follows: The subject matter of such an agreement is not tangible, but intangible assets of the SME such as patents, licences or trademark rights. According to the FTD magazine, an example of such a kind of leasing is the relationship between the Alfmeier company, which is a car component supplier based in the federal state of Baden-Württemberg, and the Südleasing GmbH leasing company. An ad hoc special purpose vehicle founded by the Südleasing covers the preproduction costs which in turn receives part of the payment once the product is supplied to the customer.
According to the author of the article, this kind of »structural financing« is more and more frequent. Financing solutions for the covering of preproduction costs are mainly offered by the subsidiaries of banks: Apart from the Hypovereinsbank subsidiary HVB-Leasing and the LBBW subsidiary Südleasing, solutions are also provided by the AGV company which is held by the savings bank affiliate Deutsche Leasing together with the HSH-Nordbank bank. Other leasing companies providing this kind of financing are the IKB-Leasing which is an affiliated company of the Industriekreditbank as well as the Commerzleasing. The original article is available here. 