Business Car Manager: Editor’s Blog

I’VE just finished writing a story on contract hire for Professional Driver magazine – edited by Mark Bursa, who edits Business Van Manager, the sister title to Business Car Manager.

Now, contract hire and leasing is right up my street. But actually, the sources of finance for executive hire and chauffeur firms is quite limited. Many of the contract hire companies I contact were willing to help with the feature…but wouldn’t underwrite any cars used for private hire. Hmmm. Giving with one hand, taking away with the other. So where could chauffeurs go for car finance?

Well, there are the car manufacturers – such as Audi, BMW and Jaguar with their specialist chauffeur programmes – but otherwise it was pretty limited, and often involved going to alternative finance sources.

So the fact that the Forum of Private Business (FPB) is suggesting alternative forms of finance for credit-starved small businesses rather caught my eye.

With traditional forms of lending to SMEs in short supply, the Forum or Private Business (FPB) believes that a move away from bank lending could help many firms to stay afloat.

The FPB wants the government to look to look into creating more alternative options for small businesses which have been denied finance by traditional sources of lending. This follows the Public Accounts Committee report, which found that the banks had broken their promises to lend to small businesses, placing many in danger of insolvency.

The options which the FPB believes policymakers should look into include corporate bonds, leasing, invoice financing, supply chain credit and, following the recommendations made by the Rowlands Review, venture capital.

The FPB has set out its thoughts in a paper to the Treasury.

Matt Goodman, the FPB’s policy representative, explained their thinking: “Our research indicates that smaller businesses are too dependant on the banks for finance.

“At the same time, the recent crisis in the banking industry has made it clear that access to credit should be less dependent on the economic cycle. Any way of reducing the ‘feast or famine’ view of credit needs to be resolved before the next economic downturn,”