Asset refinance is a funding tool that provides a multitude of opportunities for businesses. Reducing monthly outgoings by consolidating equipment hire purchase and lease agreements can clear more headroom in a company’s finances. Or it can provide an injection of working capital to fund new projects, help with expansion costs, or provide a cash flow buffer.
A deal recently written at Praetura Asset Finance is a perfect illustration of a business utilising asset refinance to both reduce monthly outgoings and provide a capital boost to enable work to begin on new projects.
Hire and Supplies Limited is a growing plant and tool hire business with locations in the west of Scotland, as well as a significant online presence providing everything from excavators and dumpers to hand tools and workwear, with delivery UK-wide. As well as the hire side of the business, the company also provides a wide range of power tools, garden machinery and engineering equipment.
The company, which was founded in 2014 and now has 40 employees, is now planning to expand their offering into northern England, and the funding support facilitated by Greater Manchester-based PMD Business Finance and financed by Praetura Asset Finance, will enable them to do that.
The £2.52m deal involved the refinance of more than 250 assets across 160 hire purchase agreements (with a number of funders), structured over three agreements. All three agreements were completed and all incumbent finance settled within five working days. As well as providing a significant cash injection, the deal has also reduced the company’s monthly outgoings substantially.
Director of Hire and Supplies, David Chandler, told us: “This refinancing deal frees up significant cash that we will use to grow the business, specifically opening a bricks and mortar centre in Cumbria, where our sales have been steadily growing in recent years.
“The plant hire sector in Cumbria has seen some upheaval with some competitors leaving or scaling back in the region. We believe there is a gap in the market for a firm like ours, particularly as the economic conditions will lead more businesses to hire in equipment than to buy it.”
Will Brazel, Regional Sales Director at Praetura Asset Finance, commented: “This was a complex deal with many moving parts, but one that showcases the support that asset refinance can offer businesses. The primary challenge here lay in the sheer number of agreements which required settlements. It’s a strong example of how close collaboration between the funder, the business and their broker, PMD Business Finance, can drive swift execution and delivery.”
PMD Business Finance’s Structured Finance Director, Kai-Wynne-Jones added: “We are delighted to have been able to support a fantastic business and management team with this asset refinancing transaction ensuring Hire and Supplies executes its exciting growth plans which will create new job opportunities across Cumbria.”
If you’re a business finance adviser or asset finance broker and you would like to find out more about how the asset refinance funding available from Praetura Asset Finance could help your SME clients, please don’t hesitate to get in touch by calling 0333 323 7800, or emailing enquiries@praeturaaf.com.
