Haulage And Transport Businesses Can Benefit From Flexible Asset Finance
Article published in September 2017 issue of Roadway, the official magazine of the Road Haulage Association
Businesses in the transport sector of all sizes can benefit from a carefully planned injection of asset finance to help grow and develop the business. So says David Foster, managing director at finance specialists, Anglo Scottish Asset Finance.
“The haulage and transport sector is a vital part of our economy. However, increased costs and tighter margins mean that careful planning and a sound financial strategy is required to further develop businesses in the sector.
“This might involve funding solutions that spread the cost of the investment in new vehicles, or release working capital from the current fleet and equipment,” he said.
To underline the point, Foster cited three examples of transport clients that had been able to develop their operations or meet specific targets by injecting asset finance into the business.
The first business, a medium sized logistics company in Northern Ireland, was looking to purchase a 2013-plate DAF CF 250 High Roof Sleeper on hire purchase for £49,950 to help meet a new contract.
Anglo Scottish was able and put together a very flexible and attractive finance package that included a three month VAT deferral plus only one month’s repayment upfront.
This not only provided a major boost to the business’s cash flow, but meant that the company was able to secure the necessary asset and successfully fulfill the upcoming contract.
The second business was a relatively new start-up based in Scotland that was looking to acquire a 2015-plate DAF Tipper Euro 6 for £68,000 as it had a good long-term contract offer in place for the vehicle.
However, being a young company, it did not have the required number of years of financial accounts, nor did it have significant funds to put down the required deposit.
Anglo Scottish looked at a number of options including a directors’ guarantee, but there was insufficient personal wealth available to underwrite the new financing required.
However, indepth discussions revealed an unencumbered vehicle that had previously been purchased by the business outright. A quick valuation allowed Anglo Scottish to put together a finance package with the additional vehicle as security for the loan, and to provide the necessary funding to successfully acquire the new tipper.
The third example was with a much larger client looking to secure £1 million in finance, secured against its current fleet of vehicles and equipment that had been purchased outright over the previous 18 months.
The Yorkshire-based business was actually referred to Anglo Scottish by one of the major banks that was not interested in providing a refinance package. But the proposition was right up the finance specialist’s street.
The client’s assets were quite specialist in nature and required detailed knowledge of the sector, so a third-party valuation was swiftly arranged. And a member of the Anglo Scottish team visited the customer to assess the feasibility of the transaction.
Having received a favourable valuation of the various assets required as security for the refinance facility, Anglo Scottish was quickly able to offer terms that were acceptable to all parties, and the new funding was duly secured.
David Foster explained: “We work closely with our customers to make sure that even when a deal is not quite strong enough to be approved, or where the amount involved is substantial, we consider every angle and explore alternative solutions to make sure we get the transaction over the line to the benefit of our clients.”