Increasingly banks to return to vehicle leasing market
SMALL business van operators struggling to find credit lines to support their firms should find plenty available in the vehicle finance market it appears.
The British Vehicle Rental and Leasing Association (BVRLA) believes more banks will return to the vehicle rental and leasing market this year, bringing extra funding to help what it believes will be a growing demand for rental and contract hire.
According to BVRLA chief executive John Lewis, this improved funding outlook for the vehicle rental and leasing industry could not be coming at a better time.
Mr Lewis said: “The recovery we expect to continue this year will be a largely credit-less one, with smaller businesses in particular struggling to meet their borrowing requirements.”
Mr Lewis added: “I am confident BVRLA members will provide the vehicle finance to ensure this economic growth can continue.”
Mr Lewis said that while some SME van operators had been affected by what he described as a “tumultuous end to 2010, with a number of companies being taken over, exiting the market or going into administration”, Mr Lewis said that in the long-term the product offering from larger operators with greater economies of scale and the ability to invest in value-added services such as fleet management would be to the benefit of smaller firms using these van rental services.
“Our members forecast a continuing growth in demand for commercial vehicle rental and leasing in 2011, particularly for vans. As the latest truck and van sales figures show, many of them are investing in new vehicles and there is no danger of the market not having enough capacity. We appear to be moving towards a more balanced market where supply capacity is more closely matched to demand,” Mr Lewis said.
One route to securing additional business van finance could be through BVRLA accredited leasing brokers, such as Central Contracts and Concept Vehicle Leasing, both of which are partners of Business Van Manager. Leasing brokers understand SMEs and can work with small businesses to find the right vans at the right funding levels.
Mr Lewis confirmed his beliefs that leasing brokers would be good for SMEs: “This will be the year when leasing brokers finally come in from the cold,” Mr Lewis said.
“A combination of rising standards and more stringent underwriting criteria from funders will see a smaller but more professional core of brokers emerging. With a growing market of SME customers and a more receptive group of manufacturers willing to work with them, 2011 looks like being a good year for this route to market,” Mr Lewis added.