Bank Of Scotland & RentSmart to Launch UK's First Point of Sale Small Business Product

31st March 2003

Scotland's 143,000 small and medium sized businesses will soon have access to a previously unavailable source of finance, with the launch of a pioneering point of sale rental finance facility.

Bank of Scotland Business Banking and innovative Australian financial services company, RentSmart have created a joint venture, RentSmart Ltd that will launch the new facility in the UK in May. The joint venture reflects the Bank’s pioneering approach to business banking, which sees it challenging the competition as the real alternative for businesses’ banking needs.

The RentSmart Ltd product, a first to market offering, will allow businesses to rent rapidly depreciating technology items like computers and printers directly from retailers – with significant business benefits such as speed, convenience, the ability to upgrade to the latest technology and ultimately improved cashflow.

Point of sale rental finance for SMEs is one of the fastest growing finance sectors in Australia. More than 1,000 Australian retail outlets offer RentSmart’s retail finance solution, with 90 per cent of contracts taken out for computer and associated technology items.

Bank of Scotland Business Banking and RentSmart estimate that the total market for small business IT and business equipment in the UK is in excess of £12bn. With speed, convenience and keeping up to date with rapidly changing technology, three key issues for small businesses, the scope of the opportunity for RentSmart Ltd is clearly significant.

Says RentSmart founder and managing director, Ned Montarello: “Traditionally, banks and other financiers in both Australia and the UK have not been able to meet the needs of point of sale finance for businesses in the retail environment. This is because they simply don’t have the automation of systems to be able to credit check and turn around small transactions in the time required, and with the efficiencies to make doing so worthwhile.

“A small business doesn’t want to jump through the same hoops for financing a £1,000 PC as they do for a £50k facility and our systems have cut through this, delivering a convenient point of sale service.”

Says Gareth Parry, director of Bank of Scotland Asset Finance: “RentSmart Ltd is focused on satisfying the demands of a neglected niche in servicing small ticket transactions for small business.

“It’s a niche that has now become one of the fastest growing finance sectors in Australia and we believe it’s a product that is right for the times in the UK now. As small businesses are traditionally time poor, they need access to simple, convenient financing solutions.”

Point of sale business finance applications
RentSmart’s core competency is its ability to process a high volume of low value transactions. It can turn around point of sale credit applications from businesses for purchases between £250 and £15,000 in minutes thanks to a combination of streamlined credit matrices, proprietarily developed credit approval software and a powerful call management system.

The powerful back-end software that drives automated systems is also married to a web-based front end that enables customers to drive their own credit approval online.

Many existing ‘online business finance’ facilities merely act as an email form to collect customer information, which is then processed by back room staff. These financiers can therefore only promise to get back with finance approval in 24 hours. RentSmart’s system, by contrast, can automatically deliver a binding finance approval in just three minutes.

The success of this system currently sees RentSmart in Australia write around 30 per cent of all its business over the web.

Business benefits
RentSmart’s rental finance product satisfies two primary needs of the small business IT customer: the convenience of on the spot finance and ‘future proofing’, which enables customers to stay up to date with technology.

Convenience is derived through the point of sale delivery of the product.
Future proofing is inherent as equipment is rented for its useful life enabling the business person to update to the latest equipment when they need.
In addition, the small business customer is provided with all the inherent benefits of a business finance product, with upfront capital costs eliminated allowing them to improve their cashflow by paying low cost monthly rentals that can be fully tax deductible.