Started four years ago by two black chartered accountants, InnoVent Rental and Asset Management Solutions has used a strategy of transparency to grow at more than 100% per year – financing almost R1-billion’s worth of assets – and expects to double that in the next 24 months.
Starting in information and communications technology (ICT) equipment and office automation, the company has since expanded its asset base to cellular base stations, vehicles, medical equipment, and yellow metal.
Clients include blue chip organisations such as Woolworths, Edcon, Discovery Health, Stanlib and PricewaterhouseCoopers, as well as a number of universities.
InnoVent CEO, DJ Kumbula, says that while working at other financing organistions he saw clients becoming increasingly wary of the fine print on contracts but having no freedom of choice in the market because all the rental companies were operating in the same way.
“Neither Zakhe Khuzwayo, now InnoVent’s chief operating officer, or I were comfortable with the situation in terms of our personal integrity. Then we realised that our integrity would, in fact, be a business asset for us. All we had to do was be utterly transparent about the client’s risks and then come up with the means to mitigate them – and we’d have clients knocking on our doors. And that, indeed, has been the case.”
Khuzwayo says: “As chartered accountants, we have the business insight not only to be able to structure our products and services in ways that free cash flow for clients, we can also engage at CEO and financial director level in terms of using rental and asset management to help an organisation achieve its overall business objectives.
“So, clients choose us initially because of our transparency and then learn to see us as a financial partner who can tangibly enhance their profitability.”
Not content simply with eliminating disadvantages to clients inherent in the old-style fine print, InnoVent takes an innovative approach to structuring deals, often inventing entirely new ways of handling rental and asset management.
One example is InnoVent’s approach to obsolete equipment and asset disposal. “We take a cradle to grave stance, handling the financing at inception – and subsidising costs by taking a residual position or enabling customers to take their rented assets off balance sheet, managing the assets with the client during the rental term, and taking care of the asset disposal at expiry of rental contracts,” Kumbula says.
“And, unlike other rental companies, we have our own fully kitted reverse logistics division – to handle all end of term returns, ensuring that client equipment is handled safely and no artificial damage charges are incurred by relying on third parties. Imagine renting a car from a car rental company and then having to return it via a third party who passes it back to the rental company! You have no control over the third party’s activities and are vulnerable to any charges levied by the rental company. With us, the dreaded ‘damages bill’ is a thing of the past when it comes to equipment that is returned damaged.”
Innovation also significantly expands client choices regarding their rental and asset management. They can upgrade or refresh their assets without incurring increased payments or additional upfront outlays of cash.
“Also, because we structure our agreements to suit a client’s specific need, using tools that range from straight leases to balloon structures, clients have the flexibility to change their minds at any time during the run of the contract,” Kumbula says. “They can go from ownership to pay-for-use, or upgrade their assets through our patented renewal offering, or, simply, opt for our asset management and tracking tools.
“We believe profoundly that choice is what successful business is all about. We started InnoVent so that we could choose to do things in the way that made most sense to us. And we try and enable our clients to do the same. It seems to be working for them – and for us.”