Restricted finance for small firms is signposting a trading loss for vehicle tracking company Minorplanet Systems – despite a massive increase in corporate business.

The Leeds-based operation, which manages 40,000 vehicles for 4,000 UK customers, claims the clampdown on lease finance in the small and medium enterprise sector has had a ‘profound’ effect on revenues in the first half of its financial year.

“All the criteria has changed after the credit crunch and our customers are concerned about survival.

"Even when we get orders, it is almost impossible to get leasing finance for the equipment.

"Things are tough,” chief executive Terry Donovan told Fleet News.

Speaking as the Minorplanet board announced it expected full-year results to be “significantly below” current market expectations, he said the tougher approach to finance had cost the company at least 25% in lost business, resulting in a loss even though sales surged by 169% in the last six months.

“The Government is trying to help lots of people, but many of the initiatives are not reaching a lot of our customers.

"We are looking for a different lease finance model for both now and in the future as we work to build a recurring income,” he said.

A 15% cut in workforce has left Minorplanet with 135 staff at its Leeds head office and in Scotland, Bristol and the London managed service office.

“We can scream and shout about the credit crunch and everything associated with it, but we have to get on and do something about it. We are all having to work harder,” said Donovan.

“I’m not waiting for the upturn – I don’t think any of us can afford to expect it – and I need to drive the business forward to being profitable and successful.

"The more we can reduce our costs, the more we can cut our prices and increase sales…we’re now focused on making sure we trade cash-flow positive in every area of operation.”