Small and medium enterprises (SMEs) are carrying £6.7bn (8.4bn) worth of depreciating light commercial vehicle (LCV) assets which are limiting growth potential, Lex Autolease, the fleet finance arm of Lloyds bank, has warned.
In a statement the lessor said over two thirds (68%) of the 1.5 million vans and light commercial vehicles registered to British businesses are owned by SMEs and bought using the company’s cash reserves or with a bank loan, according to its research on Department for Transport figures.
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According to the finance firm, the average UK SME-owned van or LCV is eight years old; will have depreciated by more than £10,000 since it was first purchased, and will now be worth around £6,357, leading to a £6.7bn figure for the UK.
Lex Autolease surveyed 250 SMEs in the UK, which found over three quarters (77 per cent) admitted to never having leased a vehicle before and more than half (54 per cent) said they were unlikely to consider leasing in the future.
Tim Porter, managing director of Lex Autolease, said; "Our research shows that SMEs have a significant amount of capital tied up in depreciating vehicle assets, which could restrict their long term potential. The billions invested in vehicle ownership could be better used by businesses to pursue new growth opportunities, pay down debts or upgrade essential business infrastructure."
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