Secured Funding from Barclays
Capital and TFC sees ACF planning new offices and a review website.
Claire Hack reports.
Go deeper with GlobalData
The future of ACF Car Finance has been
secured, as primary lender The Funding Corporation (TFC) renewed
its banking facilities for the next two years.
Banking facilities are usually only renewed on an
annual basis and this is the longest period in the company’s
history for which funding will be secured.
Working with corporate lender Barclays Capital,
which has been supplying the funding since TFC was founded in 2001,
the money will be used exclusively to help ACF, a subsidiary of
TFC, to grow its brand.
TFC does not provide finance for any other company
outside ACF, which is the largest provider of subprime car finance
in the UK (profile of ACF Car Finance).
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By GlobalDataACF sales and marketing director Norman Beaumont
said: “Sales were very strong in the first quarter of this year,
they are actually 14% up on the first quarter last year.”
ACF itself has been around for more than 12 years
and was taken out of receivership by TFC seven years ago.
Beaumont added: “In terms of financial performance,
2009 was the best under TFC’s ownership. We are now ahead of where
we want to be and ahead of where we were last year.”
In the course of the next year and beyond, now that
funding has been secured, there are a number of new initiatives on
the cards for ACF, he added.
Beaumont said: “We are looking to improve our
choice of stock – whether that is specialist cars like Mercedes,
Jaguar, BMW and Audi, or whether it is more niche cars like
convertibles and Minis.
“We are looking at a much better range of cars and
a much, much newer car proposition for our customers.”
The company has also been refurbishing and
relocating its eight dealerships around the country in a bid to
make itself more appealing to its customer base, according to
Beaumont.
He said: “We have got to make sure our proposition
matches up to their expectations.”
Following the opening of its flagship dealership in
Birmingham, three more relocations are imminent and another is in
the pipeline.
Staff are also set to be given the opportunity to
take up professional qualifications through NVQ courses, training
with the Retail Motor Industry Federation [RMIF], and an
apprenticeship scheme is to begin recruiting school-leavers so the
company can continue to “grow its own wood”.
Beaumont said: “There is a state of flux created by
the general election so [the NVQ scheme] has been put on hold. As
soon as the election result is in, it will be picked back up with
RMIF.”
ACF is also to launch a new review site at
acfcarfinancereviews.co.uk, which will publish customer
satisfaction survey results.
As the only major company in the subprime car
finance market, it is faced with very little competition and also
has a growing number of customers as more people consider subprime
lending as a way to secure car finance, Beaumont said.
“There is nobody doing what we do at our level,” he
said.
“The biggest competitor was Welcome Car Finance and
they are no longer around. There may be some larger dealer groups
who dabble in it but this is all we do, effectively.”
TFC managing director David Challinor added there
was a possibility of opening more dealerships, but this will not be
until after banking facilities have been renewed again.
Challinor said: “At the moment, we are not looking
at massive growth. We are being more pragmatic about things.
“We have increased the banking facility to enable
ACF to sell more cars and potentially open a new dealership but,
realistically, that is after 2011.”
Following a two-year programme of getting rid of
its “non-performing” elements between 2006 and 2008, TFC is now
working exclusively with ACF.
By the end of May, TFC will also join ACF as being
Specialist Automotive Finance (SAF) accredited through the Finance
and Leasing Association.
Challinor said: “We will be refocusing everybody
through a series of workshops. We are planning to communicate with
everybody in the company regardless of their position to ensure
they know where we are going and what their contribution is.
“We have been through change and the reason we have
come out of that successful is because of the staff.”
The series of workshops is expected to be completed
by the end of July.
