Scarce finance can be overcome, says Fleet Alliance
20 January 2010
Lending to small businesses to fund new vehicles fell by 20% last year, according to the latest figures. But, says Fleet Alliance, while this year is also expected to be tough, companies who select the right suppliers and use techniques such as competitive tendering can expect to achieve the most reliable credit lines and cost effective funding.
One tip is to work with an independent funding supplier which offers a multi-funder approach as this affords protection against the lending restrictions that a single funder might impose. So says Fleet Alliance managing director Martin Brown who, while expecting 2010 to be challenging year, thinks that funding for businesses will still be readily available.
The Finance and Leasing Association (FLA) reported recently that the decline in lending to business for new vehicle acquisitions may have bottomed out as this indicator rose by 7% in October 2009. This was set against the backdrop of a 20% decline in new vehicle lending to businesses in the previous 12 months.
The supply of funding issue could be exacerbated this year as more companies look to replace vehicles, after deferring purchases in 2009, says the FLA.
“It will be challenging for motor finance providers to meet any increase in demand from businesses in 2010 as the economy recovers,” warned Paul Harrison, head of motor finance at the FLA.
“The capacity of the market has been reduced by consolidation – with a number of high-profile mergers – and some funders leaving the market altogether.”
However that need not necessarily be the case, said Martin Brown. “It means that businesses need to shop around to find the best deals and to talk to suppliers like Fleet Alliance who work with a panel of different funders to obtain the best rates for their fleet clients,” he said.
“We fully expect fleet customers to begin taking buying and replacement decisions again during the first quarter of 2010. They will be encouraged to do so by recovering economic conditions and the fact that so many extended leasing contracts in the last 12 months.
“Contract extensions were undoubtedly the one major feature that characterised 2009 as companies put cost control firmly at the top of the agenda,” he said.
However with a need to replace ageing vehicles, many companies will come back into the market. In doing so, they will find a wide range of prices from leasing companies due to the impact of the credit crunch.
Many leasing companies have been under severe pressure due to falling residual values and the withdrawal of large-scale credit finance, resulting in a wide range of prices for the same vehicle from different lenders.
One way to tackle this issue is by the use of competitive tendering which creates competition between leasing companies, to obtain the lowest possible cost for each new vehicle.This is the basic premise behind Fleet Alliance’s competitive tendering approach, which has seen savings as high as 8-10% achieved on behalf of clients.
Fleet Alliance works with a panel of six or seven different vehicle funders, to ensure that when a fleet client requires a new car or wants to replace on existing one, only the cheapest quote currently available on the market from its preferred suppliers is the one put forward.
And by implementing competitive tendering on behalf of its fleet customers, Fleet Alliance is able to select the very best prices, based on what are often daily price swings in the market.
“Competitive tendering offers fleet customers the best of all worlds and removes the need for them to do all of the hard work themselves. This includes the benefits of a single point of contact for the fleet manager, plus the lower total fleet costs that competitive tendering undoubtedly generates, said Martin Brown.
For more information regarding competitive tendering, or for details of any other products or services, please contact Fleet Alliance on 0845 601 8407; email info@fleetalliance.co.uk; or visit the website www.fleetalliance.co.uk
20 January 2010
Lending to small businesses to fund new vehicles fell by 20% last year, according to the latest figures. But, says Fleet Alliance, while this year is also expected to be tough, companies who select the right suppliers and use techniques such as competitive tendering can expect to achieve the most reliable credit lines and cost effective funding.
One tip is to work with an independent funding supplier which offers a multi-funder approach as this affords protection against the lending restrictions that a single funder might impose. So says Fleet Alliance managing director Martin Brown who, while expecting 2010 to be challenging year, thinks that funding for businesses will still be readily available.
The Finance and Leasing Association (FLA) reported recently that the decline in lending to business for new vehicle acquisitions may have bottomed out as this indicator rose by 7% in October 2009. This was set against the backdrop of a 20% decline in new vehicle lending to businesses in the previous 12 months.
The supply of funding issue could be exacerbated this year as more companies look to replace vehicles, after deferring purchases in 2009, says the FLA.
“It will be challenging for motor finance providers to meet any increase in demand from businesses in 2010 as the economy recovers,” warned Paul Harrison, head of motor finance at the FLA.
“The capacity of the market has been reduced by consolidation – with a number of high-profile mergers – and some funders leaving the market altogether.”
However that need not necessarily be the case, said Martin Brown. “It means that businesses need to shop around to find the best deals and to talk to suppliers like Fleet Alliance who work with a panel of different funders to obtain the best rates for their fleet clients,” he said.
“We fully expect fleet customers to begin taking buying and replacement decisions again during the first quarter of 2010. They will be encouraged to do so by recovering economic conditions and the fact that so many extended leasing contracts in the last 12 months.
“Contract extensions were undoubtedly the one major feature that characterised 2009 as companies put cost control firmly at the top of the agenda,” he said.
However with a need to replace ageing vehicles, many companies will come back into the market. In doing so, they will find a wide range of prices from leasing companies due to the impact of the credit crunch.
Many leasing companies have been under severe pressure due to falling residual values and the withdrawal of large-scale credit finance, resulting in a wide range of prices for the same vehicle from different lenders.
One way to tackle this issue is by the use of competitive tendering which creates competition between leasing companies, to obtain the lowest possible cost for each new vehicle.This is the basic premise behind Fleet Alliance’s competitive tendering approach, which has seen savings as high as 8-10% achieved on behalf of clients.
Fleet Alliance works with a panel of six or seven different vehicle funders, to ensure that when a fleet client requires a new car or wants to replace on existing one, only the cheapest quote currently available on the market from its preferred suppliers is the one put forward.
And by implementing competitive tendering on behalf of its fleet customers, Fleet Alliance is able to select the very best prices, based on what are often daily price swings in the market.
“Competitive tendering offers fleet customers the best of all worlds and removes the need for them to do all of the hard work themselves. This includes the benefits of a single point of contact for the fleet manager, plus the lower total fleet costs that competitive tendering undoubtedly generates, said Martin Brown.
For more information regarding competitive tendering, or for details of any other products or services, please contact Fleet Alliance on 0845 601 8407; email info@fleetalliance.co.uk; or visit the website www.fleetalliance.co.uk
Phone: 0845 601 8407 | Email: info@fleetalliance.co.uk | Legal information |
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