BMW Finance - Credit Crunch Worries?
Discussion
Just in the process of dealing with BMW finance, arranging the lease of 2 520d's for my business. Having been given very competitive quotes by them for 3 year contract hire, we place the orders......then BMW finance come back & say they will only go ahead if we place Personal Guarantees !!!
Can't beleive it - has the credit crunch got them that worried that they think every business in the UK will go bust ? I take it as an insult to be asked to personally guarantee to lease a vehicle from them for my business - cheeky sobs !! We had a MBO 4 years ago, paid for the business in little over a year, have a strong order book, we are profitable & have a strong balance sheet. Being a manufacturer, I can only think that they think we are a high risk.
They won't be getting my custom ever again, anyone else experienced this ?
Can't beleive it - has the credit crunch got them that worried that they think every business in the UK will go bust ? I take it as an insult to be asked to personally guarantee to lease a vehicle from them for my business - cheeky sobs !! We had a MBO 4 years ago, paid for the business in little over a year, have a strong order book, we are profitable & have a strong balance sheet. Being a manufacturer, I can only think that they think we are a high risk.
They won't be getting my custom ever again, anyone else experienced this ?
dickyt said:
Just in the process of dealing with BMW finance, arranging the lease of 2 520d's for my business. Having been given very competitive quotes by them for 3 year contract hire, we place the orders......then BMW finance come back & say they will only go ahead if we place Personal Guarantees !!!
Can't beleive it - has the credit crunch got them that worried that they think every business in the UK will go bust ? I take it as an insult to be asked to personally guarantee to lease a vehicle from them for my business - cheeky sobs !! We had a MBO 4 years ago, paid for the business in little over a year, have a strong order book, we are profitable & have a strong balance sheet. Being a manufacturer, I can only think that they think we are a high risk.
They won't be getting my custom ever again, anyone else experienced this ?
I guess they cant tell much about your business state as only those involved in the business itself will know. Again even checking last years accounts probably mean diddly at the moment, given how quick businesses seem to go under.Can't beleive it - has the credit crunch got them that worried that they think every business in the UK will go bust ? I take it as an insult to be asked to personally guarantee to lease a vehicle from them for my business - cheeky sobs !! We had a MBO 4 years ago, paid for the business in little over a year, have a strong order book, we are profitable & have a strong balance sheet. Being a manufacturer, I can only think that they think we are a high risk.
They won't be getting my custom ever again, anyone else experienced this ?
BMW finance arent the only people you can lease off though.
We have already re-sourced with a leasing company we have used in the past, matched BMW deal & guess what ? no request for a PG. Just realy surprised with BMW, I know times are hard and they feel twitchy - but also thought that they would need all the business they can get at the moment: Been observing another thread on this forum regarding how hard they are feeling things at the moment - it will get worse for them if they get too picky with who they do business with.
Oh well, their loss !
Oh well, their loss !
All lenders are a bit worried at this time and want more security, however with business being slow all you need to do is shop around as you should easily find a lender willing to a do deal without PG.
Have you tried the leasing division of the the bank you do your business banking with?
Have you tried the leasing division of the the bank you do your business banking with?
We used HBOS car leasing when we did the MBO, but unfortunately they no longer do this themselves & have farmed it out to one of the larger leasing companies who are just not competitive.
We are all sorted now with Sinclair leasing, who we know well & they know us - the company had traded for some 20 years before the buy-out 4 years ago, so no problems with them.
We are all sorted now with Sinclair leasing, who we know well & they know us - the company had traded for some 20 years before the buy-out 4 years ago, so no problems with them.
dickyt said:
We have already re-sourced with a leasing company we have used in the past, matched BMW deal & guess what ? no request for a PG. Just realy surprised with BMW, I know times are hard and they feel twitchy - but also thought that they would need all the business they can get at the moment: Been observing another thread on this forum regarding how hard they are feeling things at the moment - it will get worse for them if they get too picky with who they do business with.
Oh well, their loss !
Still, they're selling the cars to you, no matter who is doing the finance.Oh well, their loss !
I suspect BMW finance will be a lot tighter than it used to be both for private and company sales.
heebeegeetee said:
What is a personal guarantee?
I am no financial expert, but here is my understanding of a PG :A Personal Guarantee is when a company with whom you are doing a deal with asks you to guarantee to pay them an agreed lump sum of cash if your business fails / goes bust & they are not able to re-coup their losses.
It usually occurs when a business is being set up (ask anyone who has their own company), or when a business is looking to re-finance, when a Bank invests in that company. The Bank will clearly see a degree of risk for their investment & will usually ask the Directors / owners of the business to sign up to a personal guarantee for a sum of money - in the event that the business should fail, and the Bank was not able to get back all of it's cash, it would then go back to the Directors to stump up the cash agreed in the PG.
grahamm said:
If your company is financially sound what is wrong with giving a personal guarantee?
I understand that BMW finance will be very nervous in the current climate - they clearly see us a risk, which is why they are asking for the PG - that's fine, it's their business after all & they are looking to protect themselves - I am in business myself so I understand that to a degree.However, I don't think my business would last very long if I asked all my customers to give me a PG before I would deal with them. Remember, we are talking about leasing a couple of vehicle's here.... and not a major finance / investment deal. We have never been asked for a PG by anyone who we do business with or by any of our suppliers, other than with our bank when we did the MBO (the PG was removed after 1 year of trading).
I suppose it's an indication of the tough times out there, and everyone is very nervous - but I never expected to be asked for a PG when simply leasing a car. Perhaps this is something that will become more common in the current climate ?
I think it is more a case that they are nervous about the residuals than they are your company.
A year ago a £35k 520d would have been worth £30k on their forecourt at 6-12 months old, so worse case if they do have to repossess the car they stick the car on the forecourt and get their money back.
Try and do that now and they are stuffed, car will be worth £20k or there abouts, so they want a bit of back up.
A year ago a £35k 520d would have been worth £30k on their forecourt at 6-12 months old, so worse case if they do have to repossess the car they stick the car on the forecourt and get their money back.
Try and do that now and they are stuffed, car will be worth £20k or there abouts, so they want a bit of back up.
gizlaroc said:
I think it is more a case that they are nervous about the residuals than they are your company.
A year ago a £35k 520d would have been worth £30k on their forecourt at 6-12 months old, so worse case if they do have to repossess the car they stick the car on the forecourt and get their money back.
Try and do that now and they are stuffed, car will be worth £20k or there abouts, so they want a bit of back up.
???A year ago a £35k 520d would have been worth £30k on their forecourt at 6-12 months old, so worse case if they do have to repossess the car they stick the car on the forecourt and get their money back.
Try and do that now and they are stuffed, car will be worth £20k or there abouts, so they want a bit of back up.
They can't come after you for their loss at the end of a lease deal.
paoloh said:
gizlaroc said:
I think it is more a case that they are nervous about the residuals than they are your company.
A year ago a £35k 520d would have been worth £30k on their forecourt at 6-12 months old, so worse case if they do have to repossess the car they stick the car on the forecourt and get their money back.
Try and do that now and they are stuffed, car will be worth £20k or there abouts, so they want a bit of back up.
???A year ago a £35k 520d would have been worth £30k on their forecourt at 6-12 months old, so worse case if they do have to repossess the car they stick the car on the forecourt and get their money back.
Try and do that now and they are stuffed, car will be worth £20k or there abouts, so they want a bit of back up.
I think he means if the worst happens and they repo.
If he makes no payments on a 30K car (deposit, what say £1200) then they could have previously sold a 3 month old car for £25K - now what would they get for it??
They can't come after you for their loss at the end of a lease deal.
smartie said:
paoloh said:
gizlaroc said:
I think it is more a case that they are nervous about the residuals than they are your company.
A year ago a £35k 520d would have been worth £30k on their forecourt at 6-12 months old, so worse case if they do have to repossess the car they stick the car on the forecourt and get their money back.
Try and do that now and they are stuffed, car will be worth £20k or there abouts, so they want a bit of back up.
???A year ago a £35k 520d would have been worth £30k on their forecourt at 6-12 months old, so worse case if they do have to repossess the car they stick the car on the forecourt and get their money back.
Try and do that now and they are stuffed, car will be worth £20k or there abouts, so they want a bit of back up.
I think he means if the worst happens and they repo.
If he makes no payments on a 30K car (deposit, what say £1200) then they could have previously sold a 3 month old car for £25K - now what would they get for it??
They can't come after you for their loss at the end of a lease deal.
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