Belgian leasing association launches charter on circular economy

Based on three general conditions, the sector wants to ensure that entrepreneurs looking for financing for a circular project are given the green light more quickly.

In addition to a summary of the criteria and practical examples, the charter also contains a handy checklist for companies that want to properly prepare their application for financing for a circular project.

In order to evolve from a linear disposable society to a circular economy, it is important to use as few (new) raw materials as possible in production, to extend the lifespan of goods as much as possible and to reuse or recycle raw materials or parts after use. There is a good chance that in the future we will pay much more for using a good or service than for owning it. Today, for example, we already see this in the use of shared cars and bicycles and various streaming platforms.

In that transition we also have to take a closer look on the financing of our products. Leasing – a form of investment in which the use, rather than the possession, of goods is central – can be a nice alternative to the traditional buy-sell model. Thanks to their many years of experience, leasing companies already have a great many suitable and proven financial solutions to enable the switch from ownership to use.

That is why the Belgian Leasing Association researched how leasing can play a role in the development of the circular economy. The result is a charter in which the leasing sector is committed to help accelerate the development of the circular economy. By setting three general conditions, the sector wants to ensure that entrepreneurs who are looking for financing for a circular project get the green light faster. In this way, the leasing sector brings the circular economy one step closer.

The purpose of the charter is to ensure that circular projects of entrepreneurs receive better and faster support from the financial sector. The example below shows how leasing companies can do this.

Suppose: an entrepreneur wants to offer smartphones to his/her employees. This is often an expensive and complicated matter: they contain sensitive information and also many valuable components. In such a case, leasing can offer a solution. If the entrepreneur chooses to rent the smartphones from a leasing company for a certain period of time, the entrepreneur has a lot less to worry about. For example, he does not have to buy smartphones himself, he always has a number of devices in stock and he can monitor every smartphone via a digital platform. At the end of the rental period, the smartphones are returned to the leasing company. Once the appliances are completely emptied, they are given a second life on the second-hand market in Europe. Defective smartphones are recycled by recognized partners so that the raw materials are not lost

Entrepreneurs who want to put this example into practice must ensure that their project meets the following conditions:

In addition to a summary of the criteria and practical examples, the charter also contains a handy checklist for companies that want to properly prepare their application for financing for a circular project.