It has been another tough month for UK
lessors, and most people in the industry know funding is top of the
agenda.
Small ticket lessor 1pm is certainly no
exception, having seen its funding lines reduced by 15 percent.
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In a trading statement, the AIM-listed lessor
said that one of its block discounting funders had withdrawn from
the market, and another had reduced its credit facilities.
The growing number of customers requesting
payment variations has also had a “consequent” impact on cash flow
and on the timing of prospective profits.
Not one to give up, Mike Johnson, 1pm’s
chairman, remained positive, saying that he was confident that his
strong relationships within the market place would enable the
company to find new funding sources.
Elaine Levitton, the operations director at
Genesis Capital, said that her business had been affected by
funders withdrawing facilities or limiting their appetites for new
business.
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By GlobalDataGenesis closed its Leeds office last summer
and stopped taking on new vendor relationships due to the lack of
funding available. Since last August, new business has fallen by
half – which has led the business to reduce headcount by 60
percent.
Even though Levitton said that she expects new
business to continue to fall, she believes that it will be far more
gradual, at least until the end of the summer.
“But it’s difficult to predict when the
funders will be genuinely ready to write new business again,” she
explained last month.
General Capital, the AIM-listed asset finance
specialist, also admitted that due to funding difficulties, its
future was “uncertain”.
But it is not all bad news out there,
either.
In conversation during a gathering at The Ivy
– generously hosted by LPM Outsourcing to celebrate its 21st
birthday – Syscap CEO Philip White said that his company had
actually renewed and expanded funding facilities
with two of its funders, Lombard and BNP Paribas Lease Group.
Things certainly are difficult in the market
place right now, but companies will need to tough it out to prepare
for the upturn.
