“We’re running out of funders”.
“We’ve made losses in the past and the funders won’t give us the credit we need”.
“The interest rates we’re being charged by the funders are far too high”
These are typical comments we regularly hear from Vehicle Hire Companies.
In our experience there is always a reason behind these problems. When you get to the crux of the matter we find that in most cases a solution can be found.
Asking the questions and finding a solution is the value that we bring to our clients and this is exactly what we did for a South London vehicle hire company recently.
Firstly, we needed to find out why they were running out of funders. The response was that the funders didn’t like to give much credit, because historically the company had made losses and their net worth was modest.
Next we needed to know who they used for funding, which transpired to be mid/subprime funders whose repayments had been serviced satisfactorily for the past 18 – 24 months.
On reviewing the accounts, we found out there were good reasons for the past losses, but profits had been made in the last year.
Lower interest rates and higher credit lines
We obtained a statement of account in respect of the current agreements and explained to three new funders the reason for the past losses. We immediately gained 3 x £50k credit lines at much cheaper rates. These lines quickly grew to 150k, £200k and £350k respectively.
With the recent issue of better audited accounts, we’ve just obtained a credit line with a very low rate funder. Now rates have come down from 15% to well under 50% of that and credit lines have tripled.
Expansion for South London Vehicle Hire Company
The great news is that the vehicle hire company has just acquired another depot on the basis that we can fund even more vans and cars during 2017.