06 September 2010

There was a time when the target of a dealer’s wrath was always the manufacturer. Wandering in and out of dealerships these days, I have noticed a change. It is the banks who have all but replaced the manufacturers to become the subject of dealers’ gripes.

The accusations vary from having to deal with business managers who have nothing to say other than ‘I’ll need to check with my boss’, to exorbitant fees, needing to perform gymnastics to get any credit whatsoever and to banks being totally deaf when the word loan is mentioned.

Many dealers complain that they are being starved of credit by the banks. But the banks say that applications for business loans have fallen in the last 3-months and that millions of pounds available for corporate overdrafts have not been used.

Dealers tell me that is disingenuous on the part of the banks. The reason dealers are not taking-up offers of loans from banks is that they make the terms too prohibitive. Even if a dealer has no record of credit problems the bank imposes huge increases in rates to extend a loan.

So what is a dealer to do? You could take heart from Leicestershire multi-franchise group Sturgess which, after more than 110-years, has just switched to Lloyds TSB from another leading bank which it would not name. Chairman, Chris Sturgess, says the company has been with the same bank since his great grandfather began the business in 1897. You don’t need me to tell you that it was not a decision taken lightly.

He said there were a number of reasons behind the decision to switch ‘including interest rates and fees’. After 110-years I’d say it’s all credit to Sturgess.

Tags: banks, Barry's Blog, Dealer problems, manufacturers