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Credit is still on offer for those with
Page 13
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a 1patient approach' in the recession
CREDIT underwriters have shown a reluctance to commit to deals because of the economic crisis, according to some in the road transport industry.
However, there are still deals being done that should help bring the haulage sector out of recession.
Juliet Smith, joint managing partner at commercial vehicle finance specialist lndelease, says there's no denying funding has become a scarce commodity in recent times. "Finance companies now need much more detailed information spread over a longer period of time before signing off a deal," she says, -but, funding is still available, and deals are being concluded."
Truck finance
John Boyce, director at Liverpoolbased company 'filly Hire, says his firm recently bought two 7.5-tonne Mercedes-Benz trucks worth £80,000 through Mercedes' own finance arm.
He says: "We went to a couple of banks, but they wanted 20% or 30% deposits, while Mercedes' finance company was happy with more like 5% to 10%." Steve Barfoot, UK country manager for Paccar Financial, the finance division of DAF's parent company, says banks will probably offer similar terms to truck-makers' finance arms, but only to firms they know or to blue-chip companies. He adds: "Since we only deal with truck finance, rather than other things such as financing real estate or equipment (commercial property), we understand what the asset is, how its price is made up and we can come up with a much better way of structuring a deal."
Barclays Commercial Bank would not comment specifically CM the commercial vehicle sector, but says its lending criteria have "remained consistent during the recession': and that companies showing excellent management skills and good book-keeping will secure finance deals A spokesman adds: "Banks will also seek to find out what the 'Plan B' is, in case things don't go as expected. They'll look for experience drawn from previously difficult trading environments, be it within the businesses or among trusted advisers."
RBS says that it is approving 85% of all business applications for credit.
A spokesman adds: "It is difficult to talk specifically about the commercial vehicle sector. Rather than taking a rigid sector-wide view, we always judge lending decisions on their individual merits" Smith says one of the advantages her company offers is that it works with a range of funders to spread the risks. She adds: "A patient approach to obtaining credit is the way forward in the present economic climate."