- Working capital released
- £40,000
- Total finance facility
- £132,000 (including settlement of three existing HP agreements)
- Assets refinanced
- Hydrema dumper, two CAT excavators
- Sector
- Plant hire and quarrying
- Location
- Glasgow area
- New term
- 60 months (consolidated from three separate agreements)
- Outcome
- Lower monthly payment than before; £40,000 to fund materials contract
The business
The client ran a plant hire business alongside a small rural quarry near Glasgow, providing plant and operator for hire with a particular focus on landscaping work on large private estates. It was a father and son operation, with a third generation due to join the business within the year.
The situation
The business had accepted a significant landscaping contract for a longstanding high-profile client. Following a difficult winter, cashflow was already under pressure. The materials cost for the job was going to run to around £45,000, and that needed to be covered before the client would pay. Asking for payment upfront was not an option. The owner called Martin instead.
The asset inspection
Martin met with the owner and his son and visited their main yard, where he inspected a Hydrema dumper and a smaller CAT excavator. He then travelled to the quarry to inspect a larger CAT excavator. All three assets were currently under existing hire purchase agreements.
Through the conversation it became clear that the preferred outcome was not simply to raise the £40,000 needed for the job. The owners also wanted to consolidate the three existing HP agreements into a single facility and extend the term to 60 months.
The numbers
The total finance requirement came to £132,000: the settlement amounts on the three existing agreements combined with the £40,000 cash needed for the contract. Spread over 60 months, the new monthly payment was lower than the combined payments the business had previously been making across the three separate agreements.
Martin was transparent that a longer term means more interest paid overall. But the reduction in monthly cashflow pressure was the right decision for this business: it gave them room to breathe, room to grow, and as it turned out, room to absorb the cost of the third generation joining the business that same summer.
The outcome
Three existing HP agreements settled and consolidated into one. £40,000 released to fund the contract. Monthly payments reduced despite a larger overall balance.
The client had, before calling Martin, walked into the bank his family had used for over 40 years to ask about a business loan. He was handed a card with a phone number and reached a call centre menu system. He did not pursue it. A phone call to Martin delivered a solution within the week.
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.