ING Vendor Lease: a three in one solution

Vendor leasing is different from traditional leasing formulas in that the vendor – whether or not acting in his own name – makes a capital good available to his client on the basis of a rental or leasing contract. For the vendor, this formula has some major advantages. Discover these advantages in this article.


  • Vendor leasing enables a company to boost sales

  • Growth in sales leads to faster inventory turnover, while extra cash may be earned through offering complementary services

  • The vendor takes control of the second-hand market.

Vendor Leasing: how does it work?

Vendor leasing needs the involvement of three parties:

1) a company as vendor,

2) his client and

3) ING Lease.

The idea is that the option of leasing is proposed directly by the vendor to his client. ING Lease then purchases the capital good on the basis of a rental assignment agreement. The vendor delivers the good to his client, and the client pays the rental to ING.

This formula is cost effective for the client, who does not have to do the rounds to find a loan. But this also works particularly well for the vendor, as there are three major advantages.

Advantage 1: Broadening range of services offered

Thanks to vendor leasing, the vendor is able to broaden the range of services he offers: in addition to sales, the vendor can also rent out a good to his client without being exposed to any additional risk or extra administrative costs. He uses an online tool to get an instant decision on obtaining a loan: his client then receives immediate confirmation that the financing is granted. Through this solution the vendor can boost his sales, because his client wastes no time in coming to a decision. This decision is usually positive because leasing allows the financial cost of the investment to be spread over the economic life of the good. It also means that the residual value of the good at the end of the contract will be taken into account.

In addition to renting, the vendor can also include some extra services such as maintenance in the client’s monthly instalments. That allows him to increase his turnover while at the same time stabilising his cashflow through the creation of more recurring revenues.

Advantage 2: Positive impact on the balance sheet

An additional advantage for the client: there is no need to include the good as an asset on the company balance sheet, or record it as a liability. The good is recorded as an expense in the profit-and-loss account. But vendor leasing also has a positive impact on the vendor’s balance sheet. In fact, the transaction is recorded in the accounts as a sale and not as a lease contract, since ING is the actual purchaser of the good. Quicker sales mean that inventory levels are a lot lower for the vendor or his dealerships, leading to less capital being “parked” on the balance sheet until a sale is concluded. Alternatively, the additional resources this frees up can be channelled into new strategic investments.

Advantage 3: Creating and controlling the second-hand market

At the end of the rental period, the vendor usually recuperates the good. In other words, it takes control of the second-hand market, since it becomes a major seller – or indeed the only seller. The vendor can then have better control of the prevailing market prices in this area. Besides, the maintenance contracts also contribute added value, leading to a higher resale price on the second-hand market.

Choose flexibly

The vendor has three possible ways of working together with his client :

  • working with ING contracts. Right from day 1, ING Lease takes on all billing and collecting;
  • using his own rental contract. The contract is then transferred to ING Lease, which purchases the good and takes on the billing and charging;
  • a sophisticated customised formula. The vendor sets up his own contracts and does the billing and charging himself. Advantage: his relationship with ING Lease remains unknown to his client, and he retains complete control of all contacts.

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