Potential Vehicle Hire (PVH), the light commercial vehicle
rental business owned by Potential Finance Group, has expanded its
fleet size to around 1,000 vehicles.
The company, which also has a brokerage division, Potential
Finance, linked this growth, which has been achieved since its
launch 16 months ago, to a vehicle utilisation rate of 90 per cent
and improved service quality.
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Colin Swanston, managing director of PVH and Potential
Asset Finance (PAF), the general asset finance arm, claimed: “We
find we are now taking business from some established contract-hire
companies due to our flexibility in providing what customers
want.”
Another factor that has prompted growth at Potential is the
movement in the UK towards LCV rental, rather than outright
ownership. At present, around 90 per cent of the LCV target market
– about three million users – currently purchase their
vehicles.
However, this is slowly changing, Swanston said: “With the
vehicle rental market already growing at four per cent each year,
we are very positive about our future trading prospects in this
sector.”
Swanston aims to grow PAF to around £25m in outstandings by
2010. Potential Finance Group sources 30 lines of finance through
its panel of funders.
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By GlobalDataPAF is currently scrutinising proposals more closely than ever
in the wake of the credit crunch. “We are taking a strict view on
our underwriting,” Swanston said, “and expect new business
outstandings to top out at around £14.5m this year.”
He added: “We have noticed an increase in cash-flow arrears and
it is obvious some small companies are struggling with their
overdrafts. This is likely to prove a tough year for many lessors
and will clearly be a time for lenders prudently to select those
deals with the appropriate margin and with satisfactory credit
risk.”
Since the company’s recent implementation of Frontline
Solutions’ DealTrak system, approval turnaround times have been
“dramatically” reduced and “record levels of new business
applications are being received”, Swanston claimed. The DealTrak
system, he added, enables far easier cross-selling between group
businesses and results in higher levels of customer retention.
