John Hughes, managing director of Mann Island Finance, has called for the motor finance dealers to better serve the SME segment.
“While there is plenty of dialogue in our industry about developing mobility solutions and the changing way people buy and use vehicles, I’m mindful that there has been a significant change in the business market that we are almost certainly under-serving and that change is happening right now,” said Hughes.
“From a nation of shopkeepers, the UK is increasingly a nation of business owners. More people are backing themselves as entrepreneurs. Yet, business finance through dealers shows little change from when I first entered the industry in 1981.”
The government department for Business, Energy and Industrial Strategy reported 5.7 million private sector businesses at the start of 2017, an increase of over 62% since 2002. Collectively SMEs have a combined annual turnover of £1.9tn, 51% of all private sector turnover in the UK.
Hughes highlighted the growing opportunity of SME owners, perhaps disaffected with high street bank SME lending, who could seek alternative vehicle funding from other sources.
“As an industry, we need to adapt quickly to an economic model for the UK that sees SMEs as major players. These small businesses are buying new and used cars and LCVs and all too often it seems we are not recognising them as businesses that we could serve better,” he said.
“We have financial products to help SMEs to take advantage of cash flow and VAT considerations, but there is scant evidence in showrooms and online that these products and showroom expertise are on offer. In the absence of such a proactive approach, it seems inevitable that some sales are being lost.”
John Hughes has been managing director of Mann Island since March 2018, when moved from his position as head of sales.