Canon's vendor finance scheme

Top companies like Canon, offer vendor finance. As part of the deal, they also lease out the equipment. Puneet Datta, director - professional printing division at Canon, says the Gurgaon-based offers a range of asset finance products – Finance Lease.

27 Mar 2015 | By Ramu Ramanathan

Datta says, “Our team can assist printers with questions, however we recommend customers seek advice from their accountants. Funding amounts vary as well. We can finance as little as 10% and have funded in excess of 80% on the higher end. Typical transactions in the Indian print industry sit between double digit lakhs to crores. Many Canon business owners are second generation clients with Canon Finance.
“Cash flow is imperative in running a business, so our financing scheme can be structured to match high and low cash flow cycles. We can also provide step up installments where newer technology is introduced into a business. This enables the business to on-board new technology, train its staff and build revenues without having a large up-front drain on cashflow.
He says the rates are determined by the market conditions and the customer.
“We offer unsecured asset finance, which means we rely on the financial strength of the customer and do not take real estate security like a bank does,’’ he says. “Our rates are influenced by such factors as the amount financed, the finance product, the term of the funding and general market conditions. However, we are competitive in this space and regularly monitor the markets.”
So what does an Indian printer have to do raise finance through Canon?
“Our credit requirements are determined by the amount financed. Typically, higher the loan amount, deeper the analysis it requires,’’ he says.
“We require some basic questions to be answered. We need documents about the structure and ownership of the applicant. Also, we request for three years financials and the director's or owner's guarantees to be supplied. For businesses with less than three years trading or seeking to borrow more than the set amount, the documentation is determined on a case by case basis.”
The downside of vendor finance: A printer can be stuck with a piece of equipment that might not perform as expected. However with Canon’s direct service model the customer does not ever face this challenge. Moreover, with financial lease, the ownership of the asset is with Canon till the end of the lease period and the asset gets transferred to the customer at the end of the financial period.
The pros of vendor finance: Greater availability.
Datta says, "Higher the loan amount, deeper the analysis it requires."