The impact of elections on the leasing market

Posted: Friday, 24 May 2019 @ 16:19
Politics continues to take centre stage in 2017 it seems, as Brexit surges towards implementation, the snap general election looms and France has a new President-elect in the form of Emmanuel Macron - a former investment banker no less.

Theresa May seems confident of her position in the polls but who really knows what the result will be until the ballot papers are counted. Certainly tensions are rising and anxiety has the capacity to loom large in business as well as in our personal lives, should we let it and unless we have a plan.

The next month, and indeed the next few years will inevitably affect the shape of the business environment and the financial market in the UK and across the world. Uncertainties exist; who will lead us into the Brexit negotiations and will they have a mandate of our confidence? How hard will the EU play? Does a change of President in France make it better or worse? And will President Trump’s next Tweet cause global meltdown?

If you follow and believe the political drama Spin on Channel 4, which purports to show the manoeuvrings and intrigue inside the Elysee and Matignon, then the new President of the Republic will have much more to worry about than the UK. Then again if you read the Financial Times, he has every chance of turning his victory into success, albeit something of a political tightrope he needs to walk to get there.

This month the Kennedy Profile in Courage Award, a private award given to recognise displays of courage similar to those John F. Kennedy described in his book Profiles in Courage, was awarded to President Obama. When Kennedy’s grandson Jack Schlossberg was interviewed about the award, he cited Kennedy’s Moon Speech at Rice University, paraphrasing it by saying: “great challenges are actually great opportunities.”

While we hope that the upcoming events do not prove to be ‘great challenges’,in the face of upcoming changes, an understandable business tactic may well be to hunker down and play safe until the storm has lifted. It may well increase the chances of a company’s survival, however it will not help to move the economy forward and it definitely will not allow a business to take advantage of opportunities that will arise.

This is where leasing can help by bridging the gap between playing safe and exploiting those opportunities. Cash provides a cushion, and leasing frees up cash by allowing capital expenditure to be paid for out of future income, and/or releasing locked-in cash from past expenditure. It may just be a useful tool to have in the armoury for the battles ahead.

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