Dale Trenam, Head of Transport Finance at Paragon, shares his thoughts on the start of 2023 and what it tells us about the year ahead:

If the start of the year is anything to go by, 2023 is going to be a busy time for the team at Paragon and the transport sector.

As specialists in transport finance for SMEs, my team is speaking with brokers, manufacturers, and customers daily and the message is clear – businesses want to move forward with optimism and find solutions that will help them succeed.

Our sector will be crucial in the year ahead. Businesses throughout the country rely on the ability of goods and people to move with ease. Whether it be LCVs or HGVs, skip or refuse vehicles, and recovery vehicles or buses – our sector is central to enabling the economy to both perform and grow.

At Paragon, we are proud to play a key role in making this happen. Whether it be directly with businesses or through our partners, by working with fantastic companies we have been able to ensure that the right assets get to the right people – benefiting not just the companies themselves, but the economy as a whole.

But the economy does not stay still. Changes to working practices and lifestyles are a constant and our sector has always been successful in adapting to that change. In fact, if you want to see how society and business is evolving, all you need to do is look at transport finance and see which vehicles are increasing in demand.

The recent growth of the delivery and logistics sectors did not start with the pandemic, but it further accelerated their use and cemented their place as a fixture of modern life.

With this growth came increased demand for LCVs, putting pressure on supply chains and rising prices for second-hand assets as both companies and sole traders sought to meet the rise in demand for deliveries.

While the pandemic is now behind us, the use of delivery services has not abated. Concerns last year over the wider economy and the impact of the cost-of-living situation on consumers led to a cautious end of 2022. However, as the economy heads into recovery we will likely see a further rise in demand as businesses look to replace older vehicles and expand their operations.

The transition to EVs will also continue. With a wider and more technologically advanced range of assets coming onto the market there will be greater opportunity for businesses to acquire new or pre-used vehicles that suit their needs – creating fresh opportunities for finance providers to support clients.

The year ahead will also provide us with greater clarity on the future of other alternative fuels. While EVs will continue to play a substantial and increasing role in the sector, alternative fuels, including hydrogen, will start to become more prominent.

As the range and availability of EVs and alternate fuel vehicles increase, so will the spectrum of jobs they are able to do. More environmentally friendly LCVs have become a fixture on our roads, but so soon will HGVs, refuse lorries, and recovery vehicles.

Now is the ideal time to start looking ahead. We know the year has started on a more optimistic note, and clients can see the economic road to recovery in front of us. They will be looking to secure new assets and replace existing stock – and the risk lies in not being ready and prepared to support businesses when wish to do so.

Visit our website to learn more about how our Transport Finance team can support your business.

Article first published in Issue 181 of Leasing World.