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UltraCar
DriveWrite
September 30, 2013


UltraCar
Credit where credit is due as hike in new business ‘start-ups’ boosts subprime fleet market.

Young entrepreneurs operating out of so-called ‘bedroom boardrooms’ are turning more to subprime vehicle leasing to get their growing workforces mobile because they cannot get credit through conventional channels.

Figures produced by leading subprime fleet provider Ultracar reveal that the company is receiving more than 60,000 website hits per month – many of them young start-ups looking for credit lines because they have been stifled by traditional lenders.

Banks and other mainstream lenders will not grant vehicle funding for at least two years – the time it takes to lodge accounts with Companies House – which can put the brakes on expansion for many entrepreneurial companies looking to grow.

Ultracar, previously a conventional vehicle leasing and contract hire business based in Southam, Warwickshire has seen its daily website hits dramatically increase after the company shifted its business to pure subprime leasing.

“Subprime leasing has come into its own during the recession because many people simply cannot get credit, and it may be through no fault of their own, as in the case of young start-ups who need mobility but cannot get fleet vehicles because of having no credit score,” said managing director David Riches.

“Independent research revealed that nearly 30 per cent of companies were started by 18-25 year olds since 2009 when the recession started and 22 per cent of them were technology companies– which reflect the landscape that we see every day,” he said.

“We see many fledgling companies who simply can’t get the streams of credit they need to get started. Getting vehicles is fundamental to their early success in a difficult economy and I am convinced holds them back: they find it difficult to find conventional jobs and launch their own enterprises if they do not have mobility in the first place".

Riches argues that the current credit scoring system is unfair and discriminates against younger start ups.

“We see people from a wide range of backgrounds and circumstances who for often no fault of their own cannot get credit. All we need to see is their ability to pay the lease and proof of address which can usually be determined by three months of bank statements. This applies for most cases even if the start ups have failed or they have got into other difficulties as a result,” he added.

“The UK needs the entrepreneurial spirit and the current credit scoring system is stacked against enterprising young companies that can help us drive out of recession,” he added.

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