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Small firms 'want loans'

The booming local business market offers dealers an ideal opportunity to replace income lost as the private buyers 'strike' continues, according to Pawan Pandya, Paragon Car Finance managing director.

Registrations in the business sector this year were up by 31% according to Society of Motor Manufacturers and Traders' figures to the end of July. Although some of these were undoubtedly false registrations designed to boost market share, Mr Pandya believes many small and medium sized businesses are replacing vehicles and looking for finance.

“Historically, the manufacturers and the major contract hire companies have been less interested in small businesses,” said Mr Pandya.

“Dealers should not miss out on sales to local businesses because they do not have the right contract hire product. These customers have a natural affinity with their local dealers and with finance houses such as ourselves. This is not a volume game for us. We are not after big fleets at cut throat prices.”

Paragon has developed its own funding model for both private finance and corporate contract hire which profiles the customer, rather than looking at the car.

This 'predictive pricing' method means factors such as business sector, fleet mix and driver profiles can allow a dealer to quote a bespoke rate for each deal, rather than take a standard rate.

A recent survey by Paragon found 50% of fleet managers questioned thought standard industry rates unfairly penalised the overall cost of their fleets. Almost nine out of 10 said they would prefer a price calculated on their individual fleet profile.

“Our predictive pricing model means quite simply that good customers don't subsidise bad ones,” said Mr Pandya. Paragon Car Finance now offers a full range of corporate and personal funding products, all based on the same financial model.

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