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Small businesses have driven up the demand for new commercial vehicle finance in Q1 says the Finance and Leasing Association as they seek to replace their old vehicles with newer vans on finance

Small businesses: big demand for van finance

Plumbers, builders and trades seek van finance rather than pay outright

“Our evidence shows that small businesses like plumbers, builders and delivery companies are turning to asset finance rather than paying upfront.”
Julian Rose, head of asset finance, FLA

THE big surge in sales of commercial vehicles – van sales are up over 25% in the first four months of this year according to the SMMT – has been driven by commercial vehicle finance.

Small and medium sized businesses have been financing new vans with alternative finance sources says the Finance & Leasing Association (FLA), as tradesmen seek to replace and renew their vans following the recession.

According to latest FLA statistics finance provided for commercial vehicles was up by 32% in the first quarter of the year, compared with Q1 2010.

More than £1 billion was provided by finance companies for leasing or hire purchase of around 20,000 new vans, trucks and lorries in Q1 2011 said the FLA, which added that businesses were changing the way they found finance for new vans and double cabs.

Finance provided through commercial finance brokers was up by 19% and finance arranged by equipment dealers and distributors was up by 24% in Q1.

Julian Rose, head of asset finance at the FLA, said: “Many of the small businesses that provide the services that keep our homes and offices going are replacing their old vehicles with more suitable and more environmentally-friendly models; our evidence shows that small businesses like plumbers, builders and delivery companies are turning to asset finance rather than paying upfront.”

“More and more businesses are making use of the wide choice of available asset finance. Finance direct from a bank or finance house is still the most popular, but finance from an equipment dealer or distributor, or through a commercial finance broker, is increasing in popularity.”

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