The coach sector’s strong bounce back from the pandemic in the past couple of years and a significant input of government cash for bus has led many to believe now is a good time to invest in vehicles.
However, with the rising prices of used stock showing no signs of slowing and the high cost of new zero-emission vehicles exacerbating the issue, finance and leasing options are eagerly sought by operators and local authorities that are replenishing their fleets.
Two of those suppliers agree that being able to offer the customer a bespoke package and a high degree of flexibility is crucial to the appeal of this particular route to acquiring a vehicle.
Asset Alliance: ‘Comprehensive’
Asset Alliance Group’s Bus and Coach Division offers a comprehensive range of financial solutions, including hire purchase and operating leases.
“As a funder owned by Arbuthnot Latham, we utilise our own competitive funds to provide tailored financing options,” says Commercial Director Martyn Bellis.
“Additionally, we have the capability to broker business to a panel of trusted funders, ensuring our clients receive the best possible terms. Our core product offering is complemented by a well-founded rental service, providing flexible and high-quality vehicle solutions to meet diverse business needs.
“Beyond vehicle financing, we also offer general asset finance, enabling customers to secure additional funding for other aspects of their operations, from warehousing racking to manufacturing and plant equipment.
“This comprehensive approach ensures that our clients have access to the financial resources they need to grow and succeed in their respective industries.”
Recently, Asset Alliance Group has expanded its rental division from bus rental to include coach rental, which it says is a significant step in its growth strategy.
It adds that the move has been well-received by the market, with a diverse range of businesses taking up the new rental offerings.
“The flexibility and variety of rental options have particularly suited small- to medium-sized operators who benefit from not having to commit to long-term ownership or leases,” says Martyn.
“The new coach rental offering has been taken up enthusiastically, especially by businesses that require flexibility in their fleet management, such as tour operators, event transportation companies, and educational institutions.
“The ability to access high-quality vehicles without the financial burden of ownership has been a key attraction.”
Asset Alliance Group has noticed a growing demand for flexible leasing options over the past 12 months as businesses seek short-term and adaptable solutions to meet their varying needs.
This has been further accelerated by ongoing technological advancements and the increasing emphasis on sustainability within the industry.
The ability to access high-quality vehicles without the financial burden of ownership has been a key attraction – Martyn Bellis
“Asset Alliance Group is well-positioned to capitalise on industry trends by offering innovative and flexible financial solutions that cater to the evolving demands of its customers,” adds Martyn.
“With our expertise and customer-focused approach, Asset Alliance Group is uniquely equipped to support your business’s evolving needs, ensuring you have access to the financial resources required for growth and success.”
Close Brothers: ‘We’re flexible to customers’ changing needs’
One long-term funder of the coach and bus sector says it is key to recognise that finance and leasing packages should not be “one-size-fits-all”.
Close Brothers Asset Finance offers refinancing, hire purchase, sale and HP back, finance lease and operating lease and is keen to understand the right option for the customer.
John Fawcett, CEO of Close Brothers Asset Finance’s Transport division, says: “There are various products that come under the broad umbrella of asset finance with one of the key ones being refinancing or capital release.
“It’s a proven way to make your assets work for you and release cash back into the business.
“It’s pretty straightforward and works by the finance company purchasing the asset and financing it back to you, with repayments calculated in line with the income the asset is expected to generate; at the end of the refinance term, you own the asset.”
When it comes to other options, hire purchase is a product where the borrower agrees to pay for an asset in instalments over an agreed period, during which it is responsible for the maintenance and repair of the asset. When the agreement ends, the borrower has the option of purchasing the asset outright.
Sale and HP back is a form of refinance where the lender purchases an asset and finances it back to the borrower. Repayments are calculated in line with the income stream that will be generated by the asset, and at the end of the refinance term, the borrower owns the asset.
We ensure each deal is bespoke to a customer’s needs – John Fawcett
Finance lease lets the borrower use equipment without having to buy it outright. Rent is paid to the lender for its full use, and the rental period is flexible and can be tailored, depending on requirements. During the rental period, the borrower pays the full cost of the asset, including interest.
Operating lease is a type of asset finance where the borrower rents the asset for a short period. At the end of the lease term, the borrower can choose to either return the asset or continue leasing it.
John adds: “It’s important to understand that, 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, we look outside the box to provide the solution needed.
“Each product is tailored to a customer’s individual needs — it’s not one-size-fits-all.
“Our evolution is about ensuring we’re flexible to customers’ changing needs, offering agreements that fit their cash-flow requirements at a given point in time, rather than merely providing a standard vanilla offering.”
