- Assets refinanced
- Coach fleet (within the acquired business)
- Sector
- Passenger transport (local authority contracts)
- Location
- Central Scotland
- Purpose
- Part-funding of business acquisition
- Structure
- Refinance within the acquired entity; legally separate from buyer's existing business
- Outcome
- Funds released on due date; acquisition completed on schedule
The business
The client was an established coach operator in central Scotland, running local authority contracts with a well-maintained fleet. The quality of his fleet was fundamental to the contracts he held. This was a profitable, well-run business.
The opportunity
A competitor in a nearby town was retiring and looking to sell. The business held good contracts and was a well-known, established operation. The seller wanted a clean, friendly exit before the new school year started, which put a clear deadline on the transaction.
Why refinancing the acquired fleet was the right structure
The acquired business needed to remain a separate legal entity, and the finance had to sit within that business, not the buyer's existing operation. The solution was to refinance the vehicles within the business being acquired, using the asset values to release a portion of the purchase price.
Martin inspected the fleet with the current owner and secured a valuation that supported a meaningful refinance balance. The refinance was one component of a larger, multi-party transaction also involving the client's own funds and separate property finance.
Efficiency when it mattered
Once approved, Martin had the paperwork completed and everything submitted to pay out well in advance of the required date. The refinance element was ready. The payment date ultimately had to be pushed back twice, on both occasions because of legal delays with the property finance element of the deal, not the asset refinance.
The client remarked afterwards that if there had been enough assets within the business to fund the entire acquisition through refinance, he would have done the whole thing that way from the start.
The outcome
Funds were released on the correct due date. The acquisition completed. The client expanded his operation into a new area with established contracts already in place, without disrupting his existing business or compromising the legal separation between the two entities.
Mackenzie Commercial Finance Ltd is an Appointed Representative of Crystal Business Finance Ltd which is authorised and regulated by the Financial Conduct Authority. We are a broker and not a lender. We will receive a commission from the lender for all completed agreements.