As CEO of Close Brothers Asset Finance’s Transport division, John Fawcett and his team is at the forefront of supporting the haulage sector. In this Q&A he speaks about what’s been done to support hauliers during the lockdown and beyond.
How is the finance/leasing industry helping operators who had to park up their fleets during lockdown?
At Close Brothers Asset Finance, we have a proud history of supporting our customers through difficult times and the pandemic is no different in that respect.
Several measures have been implemented that have been specifically designed to help existing customers whose turnover has dropped, including repayment holidays or reduced repayments. We also called everyone who needed ongoing assistance, ensuring we provided a solution that was right for them.
We are an approved lender on the CBILS (Coronavirus Business Interruption Loan Scheme) scheme, which has allowed us to continue to lend to customers adversely affected by C19. We’ve provided both CBILS unsecured loans and released equity from existing finance agreements to inject much needed cash into customers’ businesses.
For those customers who can no longer afford deposits because C19 has drained their case cash reserves, additional funding has been provided to assist with purchasing new or replacement assets.
What’s the impact on the finance/used/leasing markets been?
The impact has been huge in terms of the amount of time and resources we’ve allocated to talk to customers and finding out what support they need; how we can help them navigate this very challenging period; altering the terms of agreements to assist their cash flow, and then processing their requirements.
Very early on our people were moved to homeworking - with no-one furloughed - ensuring we had sufficient resources to support customers. People were also redirected from other duties to help process payment holidays and CBILS lending.
There was virtually no demand for new borrowing early in lockdown through April and May, but, that said, it’s really picked back up as firms’ work levels have started to recover and since we launched CBILS in late May.
What are the current trends and future forecasts?
We expect to continue to be very busy supporting new borrowing requests until the CBILS scheme is withdrawn by the Government, which has now been extended to the end of November.
For at least the next 18 months, we’ll be working closely with our customers and providing support as they recover from the pandemic.
Are finance or leasing products ever going to evolve?
Our main products are HP (hire purchase) and Finance Lease, which have stood the test of time; however, at Close Brothers Asset Finance we ensure each is bespoke to a customer’s needs by offering a personal face-to-face or virtual service where we look outside the box to provide the solution needed.
Each product is tailored to a customer’s individual needs - it’s not one size fits all. Our evolution is about ensuring we’re flexible to customers’ changing needs, offering agreements that fit their cash flow requirements at a given point in time, rather than merely providing a standard vanilla offering.
What’s the finance leasing package going to look like (or does look like) for EVs, given the uncertainty over residual values?
We’re looking closely at EVs across all vehicle classes and are committed to providing scalable funding on them. We continue to research and work with partners who can give us the insight and knowledge we need to confidently lend on the right EVs.
Commercial EVs are still in their infancy but we already have significant experience in, among others, the London electric taxi market, which has launched viable EVs.