FOREIGN FINANCE
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LFB Humberclyde of Basingstoke, which lends to both fleets and truck distributors on new and used vehicles, does not move money across frontiers — yet. But "It's something we're looking at," says the company, acquired last year by the UK division of UFB Locabail, Europe's fourth largest leasing company.
Like all UK-orientated lenders, UFB is constrained by the 15% base rate. But in France the rate is around 10%. The saving is not nearly as great as 5%, by the time administrative and currency costs are accounted for, but savings can be made and passed on. This can make all the difference in a competitive tender.
French banks are attracted to the UK because they can lend at higher rates than at home yet remain competitive. And they judge that sterling will retain at least parity with its present level against the French UK as a major source of European expansion. The value of sterling should stabilise, to a degree, if and when the UK enters the European ex change rate mechan ism.. But if a haulier can find a big, reput able lender prepared to take the risks, he could benefit greatly from a low finance rate.
Cload comments: "Everybody is a bit sleepy with regard to the panEuropean issues. A lot of very traditional English are frightened to death by these European treasury techniques."
He insists that what he and Societe Generale are doing now, more and more finance suppliers will do in the future.
by Jack Semple