Autumn Newsletter
With over half a decade of successfully providing funding to SME's and Corporate Businesses across the country, we’ve had our busiest month to date. In just the first week of October 2014 we had advanced almost £1m+ of funds to customers/suppliers with additional requests coming in daily for a range of assets being purchased by businesses across every sector.
These numbers reflect the overall trend in the Asset Finance market place and new figures released by the Finance & Leasing Association (FLA) show 11% growth in asset finance during the twelve months to August 2014, bringing the annual total to more than £24 billion – the highest reported by the industry for five years.
The strongest new business growth in August was reported by the business new car finance sector, up 38% compared with August 2013. Plant and machinery finance and commercial vehicle finance were also up by 7% and 5% respectively over the same period. IT equipment finance recorded a second consecutive month of strong growth in August as new business increased by 10% on the same month a year earlier.
Commenting on the figures, the FLA, said: “The asset finance market has grown in each month so far this year, driving the annual total of new business up to its highest level since August 2009. Recent months have seen growth extend beyond the commercial vehicle and plant and machinery finance sectors, which were the key drivers of growth over the last year.”
As increase in demand continues and the trend for businesses to look 'outside of their own bank' for asset finance, we ensure our panel of funders continue to evolve and meet our customers' varied immediate and future funding requirements. With the advent of 'peer to peer' funding we have one of the largest funders on our panel as well as other new entrants to the market strengthening our proposition further. Quite simply, if you are a business operating in any sector, buying any type of asset we are able to facilitate this purchase through competitive funding packages.
In line with previous Newsletters we are keen to share with you 'real life' case studies, detailed below.
Deal Summary
Established Print & Design Company looking for strategic cash flow benefits…
We have worked with this client for the last 3 years funding a variety of equipment essential to their business. After 30+ years trading and significant capital investments (supported by Affinity) we were approached to reschedule the existing equipment over a longer term. The rationale for this being the life span of the equipment is significant and to extend the term in line with long term contract work would be far more sensible from a cash flow perspective.
We were able to package the facility quickly whilst offering a few options to the client, all of which offering the cash flow benefits they were looking to achieve.
National Logistics Company looking to replace and extend its trailer fleet…
Having been introduced to this client over 2 years ago we have established a very strong relationship based on our speed and efficiency of service. The client had historically been let down by their own Bank on numerous occasions which had not only cost the client money but also negatively impacted on their other Bank facilities. These factors alone have meant that we are approached for every purchase and the latest acquisition for £160k of trailers and cranes completed last month.
New Start Haulage Business…
We worked closely with the Director of the above business and established a significant facility based only on an 9 month trading period. His previous business had failed through no fault of his own, yet he had kept the key profitable contracts and the new company was showing a good consistent performance. They had commitments with large blue chip organisations, however due to the new start nature vehicle rental was their only option. Therefore, the costs were expensive and restricted margin within their contracts.
Following a meeting with the client and gaining a good understanding of the business we successfully placed 4 vehicles, totalling £106K with a competitive funder over 3 years. The facility was on Finance Lease which helped with cash-flow and the terms weren’t onerous as our funder recognised the strong underlying business. This is a perfect example of how Affinity can assist new start businesses access sensible funding at competitive rates and terms.
Established Nottinghamshire Plant Hire Business…
We were introduced by a well respected local accountant who had a client looking to purchase a mobile crusher, however a quick conclusion was imperative in order to secure the deal. The business was buying the equipment under a distressed sale scenario and needed to complete the payment before the supplying business went into administration.
We acted quickly and gained an approval within a matter of hours, the terms were over 4 years with a 10% deposit and 3 month VAT defer to help assist with cash-flow. The customer was delighted as they managed to secure the machinery at a significantly lower value due to the distressed nature and had a customer to hire it within 24 hours.
Leicestershire based printers…
We have known the above business for over 5 years and have supported numerous plant and equipment acquisitions during that period. The most recent was slightly different as they had bought several items from varied suppliers both in the UK and overseas. As the equipment was arriving at different times and in different currencies the client was able to pay cash initially, allowing us to reimburse them once the goods were in the country.
We quickly provided a suitable Sale & HP back facility, grouping everything together and releasing c.£100K cash back to the business within days of their initial outlay.
WATCH THIS SPACE UPDATE…Affinity have now been shortlisted in the 'Leading Advisor 2014’ category in The Family Business Awards – http://www.familybusinessawards.co.uk/2014-finalists
We are delighted to be 1 of only 5 to be shortlisted in this prestigious event, taking place at Nottingham Trent University on November 13th. This is recognition for our continued support of several family businesses and owner managed operations across the Midlands. We are passionate about supporting their growth through funding and hope our efforts will culminate in success on the night!