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I've read good reviews of these:
http://freeridemadeira.com/bike-rentals/
http://www.lokolokomadeira.com/mountain-biking/I've found these trails that seem quite close to Funchal (no need for car/van transfer)
http://www.trailforks.com/route/pico-do-arieiro-funchal/map/
http://www.trailforks.com/trails/sao-roque/
I don't recall seeing any/many bike hire places. Have you found one of them?
http://www.madeira-live.com/en/bicycle.html