Fleets will find it increasingly difficult to get funding for new vehicles after a number of major lease companies either stopped using brokers or significantly reduced the number of brokers on their books.

Smaller fleets – typically those operating less than 50 vehicles - use brokers to source funding for new fleet vehicles, often through contract hire deals with major lease companies.

However, LeasePlan and Lex Autolease recently took the axe to their broker networks.

LeasePlan has almost halved the number of brokers it uses, taking some 80 out of its Network operation, while it is believed Lex Autolease has let 70 of its brokers go.

This follows Lombard and Hitachi Capital Solutions both stopping using brokers altogether.

Lombard said it has cut out the middleman and is now going after broker-generated business itself, while Phil Peace, director of sales at Hitachi Capital Vehicle Solutions, said it exited the broker market because “the business introduced through the broker channel did not generate adequate returns”.

Brokers are reeling from the news. One established LeasePlan Network broker said there has been a “cull” and that those who are left face an uncertain future.

He warned fewer lenders using brokers means less competition. He said tthere are now just five main funders left – Lex Autolease, LeasePlan, Arval, ALD and Pendragon - and two of these have just reduced the number of brokers they use.

This succession of lease company withdrawals and reductions in broker business could have a devastating effect on the ability of small businesses to fund new fleet vehicles.

However, the BVRLA, which has brokers as well as lease companies among its members, explained why lenders are moving away from brokers.

“With credit in short supply, funders are looking to maximise their return on investment,” explained BVRLA chief executive John Lewis.

"Although some leasing companies are cutting the number of brokers they deal with, it remains a major route to market for them.

"There is still more than enough competition in this part of the market. With leasing companies, brokers and manufacturer-captive programmes looking for business, small and medium-sized organisations will still be able to drive a hard bargain on their fleet requirements.”

But lending to businesses for new vehicles is falling - down by 22% in the past year. According to the Finance and Leasing Association (FLA) just under 360,000 new cars were acquired on finance by businesses in the 12 months to August this year.

Now fleets are finding fewer brokers in the market and those that remain have fewer funders on their books.

Although according to the FLA brokers still offer a significant service to fleets.

“It may be the case that some lenders have exited the market, but there is still a broker market and, therefore, access to finance – albeit with a reduced choice of brokers,” said an FLA spokesman.

Brokers provide significant business to lease companies – they generated £4.7bn worth of fleet business in the 12 months to July – mostly from small and medium-sized companies operating fleets of less than 25 vehicles.

But that has not stopped the recent cull, as the chief executive of the National Association of Commercial Finance Brokers (NACFB), Adam Tyler, explained: “Over the last 12 months, some lenders and funders have looked at their existing book, and decided that business introduced by brokers is subject to a higher default rate than business from direct channels and, because of this, the broker arm of the business has been either severely restricted or cut off altogether.”

Lombard’s decision not to use brokers was criticised by Tyler. “The brokers gave Lombard a nationwide exposure which cannot be matched with their own direct resources. In reality they will not be a player in the SME market but will gravitate to the larger or corporate sector,” he said.

Unlike Lombard, both Lex Autolease and LeasePlan still continue to use brokers, although LeasePlan’s hardline attitude has left brokers angry.

“We are disappointed that only 12 months after signing these brokers up and assuring them of a future of partnership, Network has pulled the plug,” said Tyler.

LeasePlan said the brokers were let go because they were not achieving.

“This rigorous process is undertaken with all of our intermediaries annually and, as a consequence, where standards or performance levels are not achieved will result in us parting company,” explained David Brennan, managing director of LeasePlan, stressing that LeasePlan is “still be the biggest player in the broker market by a long way”.