Close Brothers Asset Finance

INTERVIEW: JOHN FAWCETT As CEO of Close Brothers Asset Finance’s transport division, John Fawcett is at the forefront of supporting the haulage sector. In this Q&A he shares his thoughts about current trends and demand in finance.

CM: What’s been the trend in finance for vehicles, trailers and related equipment since the beginning of the pandemic?

JF: Demand dropped in the first lockdown last year but gradually picked up as restrictions lifted and has remained strong ever since, though supply issues are currently impacting on new vehicle finance levels, resulting in the used vehicle market enjoying strong demand.

CM: What was the impact on hauliers and how have you been able to help?

JF: Many vehicle operators experienced a significant initial impact on work and income in lockdown one last year. Since then, those working with the high street retail, hospitality and entertainment sectors have had many challenges, while those in most other sectors have enjoyed strong demand.

We have assisted those in challenged sectors with payment support and CBILS funding, while providing funding for growth in the fleets of those operators doing well.

CM: Where are you seeing the greatest demand coming from in the haulage sector now?

JF: Currently, the highest levels of demand in this sector are for larger payload capacity vehicles, from long-wheelbase light commercials to the largest tractive units.

with the income the asset is expected to Closing up the gap generate. And at the end of the refinance term, you own the asset. Other examples of asset finance products include hire purchase, which allows the customer to buy the equipment on credit. The finance Close Brothers Asset Finance has a range of options company purchases the asset on behalf of to help operators in the post-pandemic recovery the customer and owns the asset until the final instalment is paid, at which point the customer is given the option to buy it. Then there is the finance lease, under which the full value of the equipment is repaid to the finance company with interest over the lease period. At the end of the term, the company can choose to continue to use the asset by entering a secondary rental period; sell the asset and keep a portion of the income from the sale; or return it. At Close Brothers Asset Finance, we ensure each deal is bespoke to a customer’s needs by offering a personal face-to-face or virtual service, and we look outside the box to provide the solution needed. Each product is tailored to the customer’s individual needs – it’s not CM: What are the emerging trends for one-size-fits-all. haulage finance as we start to emerge Our evolution is about ensuring from the Covid crisis? we’re flexible to customers’ changing JF: The need for flexible payment needs, offering agreements that fit their structures to match recovering income cash flow requirements at a given point streams plus seasonal cashflow peaks and in time, rather than merely providing a troughs to support the affordability of standard offering. operators’ monthly commitments.

CM: What does a finance leasing package CM: How would you expect this to affect look like for EVs, given the uncertainty demand for finance into the future? over residual values?

JF: We expect the demand for vehicle JF: We’re looking closely at EVs across finance to remain very strong in the all vehicle classes and are committed future, particularly where lenders can to providing scalable funding on them. adapt to customers’ changing needs. We continue to research and work with partners who can give us the insight and CM: What are the main products relevant knowledge we need to confidently lend to the haulage sector? on the right EVs. JF: There are various products that Commercial EVs are still in their come under the broad umbrella of asset infancy but we already have significant finance with one of the key ones being experience in, among others, the London refinancing, or capital release as it’s also electric taxi market, which has launched known; it’s a proven way to make your viable EVs. assets work for you and release cash At Close Brothers Asset Finance, we back into the business. It’s pretty straight- are ready to champion this transition for forward and involves the finance company hauliers by working with them to provide purchasing the asset and financing it back the right structured finance solutions for to you, with repayments calculated in line them.