Business car orders rising

I WAS talking to Mike Lloyd, boss of Central Contracts yesterday. Central Contracts is a BVRLA-accredited car leasing broker. Its key business is providing advice – and car leases – to small businesses wanting cars and vans.

Having spoken to many brokers, I know that it’s been a lean but busy time. However, few businesses had actually committed to new business cars despite the enquiries.

But Mike said there appears to have been a change of sentiment.

“It helps that when we quote a contract hire price it stays the same all month – and that’s thanks to the stabilisation, and indeed rise, of used car values,” said Mike (see our story Market vanishes for good value late plate business cars).

“There is an element of desire for new business returning to the market,” Mike reported. “It’s almost those green shoots we keep hearing about. But businesses are certainly showing more commitment now. They seem to be more receptive to two or three year contract hire deals with maintenance. We are beginning to see more business transacted.”

That sense of purpose, commitment, or confidence – lacking for so long – must be welcomed by us all. Sure, it’s tentative – but confidence is slowly seeping back into the mindsets of smaller companies.

But with new business comes risk. Will customers default? What’s their financial situation? It’s an issue being taken seriously: business information provider Equifax reports a 300% increase in its business monitoring service.

They’ve also seen a big rise in the number of credit reports for non-limited businesses such as sole traders and partnerships. Equifax reckons many organisations are recognising the value of understanding the financial circumstances of the people running a business, particularly a new start-up.

So there remains understandable caution – businesses must safeguard against bad debt – but signs that trade may be starting to improve.

Let’s hope it continues that way.