Finance facts ITread with interest your feature on the recent
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London Trans-Action demonstration (CM 9-15 April) and I was particularly interested in the reference to and comments made by John Donald of Donald Transport. I also noted mention of the business's demise.
Back in early 1996 I was less than happy with the inference in a CM article which suggested that MAN Finance was not helpful to Mr Donald in his search for finance. Indeed, Mr Donald's printed comments suggested that MAN Finance was less than professional and that our decision not to provide support in his case was a slur, not just against him but against hauliers generally.
It is true we did not provide finance on this occasion. However, our decision was based on financial information about Mr Donald's business made available to us at the time, and it involved a full evaluation of the proposal. Our view was that this was not a business that we wished to support and we refused the lending request In view of the numerous and varied pressures facing the haulage industry we take our role, which is not insubstantial in this sector, very seriously and not lightly or in a cavalier manner, as was suggested.
The provision of funds to weak businesses is not what we are about Indeed, such actions are irresponsible and have a detrimental effect on the genuine and efficient haulage sector.
Providing funds to inefficient businesses lowers the entry barriers to the sector and enables low-cost "cowboy" operators to compete with established hauliers by under-cutting rates. It also means picking up the pieces when such weak businesses fall over, as they invariably do, and the losses incurred have to be met by higher credit prices for all. Those funders who supported this particular business will now be counting the cost.
Philip Stanley, Commercial Vehicle Finance Basingstoke, Hants.