Spring Newsletter
Hope you’re well and the start of 2022 has been good to you and your businesses.
The world of finance continues to face yet further challenges as we move throughout the year. No sooner have we managed to gain a grip on the impact of COVID, we’re met with soaring inflation and increased uncertainty following the atrocities in Ukraine; for which we all hope a peaceful resolution is sooner rather than later.
At Affinity; we remain as productive and busy as ever witnessing a variety of opportunities on a daily basis. In January we hit the ground running with several significant and complex transactions which involved re-finance of a large haulage fleet and we also completed a deal to enable a considerable business purchase, in amongst our daily enquiries. The amount of cases we see continues to rise across different sectors, which proves each marketplace is thriving in one way or another. There is no limit to the size of deal or type of asset being funded, we remain focussed ensuring our panel of lenders covers a diverse range of appetite and deal structure meaning our clients have all the options available to them.
Asset finance remains a key part of any business when considering capital expenditure, with even more importance being attached in the coming year due to increased Capital Allowances (130%) until the end of March 2023. Please find a useful HM Treasury fact sheet attached which gives an overview of how your business can benefit. If you (or your clients) are considering any large purchases, now is the time to take advantage of what could prove to be a significant tax saving as this unique opportunity won’t be available forever.
Super Tax Deduction – Claim 130% Capital Allowances on qualifying Assets!
Deal Summary
Local business re-finances fleet enabling further business acquisitions…
We had been working with this business for several years before it was purchased towards the end of 2021. We were introduced to the new owners who are part of a small private equity group of companies with ambitions to grow their portfolio, which includes a diverse range of businesses. The remit was to raise working capital against the existing fleet, providing a cash injection which would assist with future business purchases/investments. We acted quickly to gain the necessary desktop valuation and submitted a deal which eventually totalled £590K over 5 years, approved within 48 hours. The client was delighted with the speed of turnaround and our ability to provide the right solution and we’ll certainly be involved in future transactions.
National confectionary business requires comprehensive finance package…
The business, involved in confectionary manufacture and distribution, were introduced to us in 2021 by a professional mutual contact. This fast growing, forward facing business was in the midst of a growth strategy and needed a range of commercial funding solutions. After an initial meeting with the Management and Operational team, we discussed their requirements over the short and medium term.
First of all; an expensive Recovery Loan Scheme (RLS) loan facility they had in place for c.£300k needed to be refinanced with another more competitive funder, this was a simple fix and would realise immediate savings of over £25k. Their next investment was in plant and machinery which would enable in house manufacturing and the obvious cost and time efficiencies that come with it. After a final machine specification was provided we secured funding for £400k based on a low deposit, a long funding term and with £80k of VAT due, we secured a VAT payment deferral for 3 months – they can claim it before having to pay it offering an ideal solution to support cash flow.
The final piece in the plan was to ensure the new premises was capable of manufacturing in line with BRC Certified production and the obvious solution was to invest in BRC compliant manufacturing ‘pods’. Each of these units are interconnectable and can be increased in line with manufacturing growth requirements, they can also be repositioned anywhere providing flexibility for the future. As they are classed as ‘temporary’ buildings we secured over £100k of funding, again minimal deposit, maximum term and a VAT deferral for 3 months.
This is a new client to Affinity and through our focus on client needs, access to many bespoke funders and a ‘can do’ attitude we have put together a full funding package of almost £1M in a very short period and have secured an exceptionally strong relationship with this client going forward.
Once again, thank you to all our customers and introducers for your continued business and support. It’s been great to be back out there seeing familiar faces and socialising with some of you more recently.
We continue to push forward and keep you up to speed with any significant developments in our marketplace.