Summer Newsletter
Hope you’re well and enjoying the fine weather, a proper summer at last!
Further to our previous communication in the Spring, it’s fair to say the finance world continues to change and evolve at a pace. As we all know, the whole country is witnessing a huge rise in inflation with energy costs and fuel at the pumps going through the roof, combined with interest rates creeping up and no sign of them slowing down going forward.
It’s yet another uncertain time and the normal reaction to rising inflation would mean a general slow down in spending and businesses being on the cautious side. However, we are experiencing quite the opposite, as the majority of clients continue to invest in all types of equipment and vehicles. This can largely be attributed to the demand from their customers post-COVID as everyone is back up and running, plus a general lack of stock across the board from suppliers, meaning quick decisions need to be made before losing the opportunity. There is also enhanced tax benefits (as per below and attached) when making purchases currently, please scan over our helpful factsheet and simple highlights as a reminder to you and your client’s not to miss out.
Company Electric Vehicles – A ‘no brainer…’
From 6 April 2020, businesses can claim 100% of the cost of an electric vehicle against the profits of the year of purchase and there are no restrictions on the value of the vehicle.
130% Capital Allowances – Deadline end of March 2023!
For expenditure incurred from 1 April 2021 until the end of March 2023, companies can claim 130% capital allowances on qualifying plant and machinery investments. Under the super-deduction, for every pound a company invests, their taxes are cut by up to 25p.
Deal Summary
Haulage firm secures £700K re-finance package to help remove banking constraints and expand…
We have known this client since 2012, having assisted with several HGV purchases historically. In June, we were approached to provide a valuation of their vehicle fleet to assist with several challenges the business was facing. They wanted to take the opportunity to remove their Invoice Discounting line as they were out of contract but found it restrictive. They also required a workshop to be built on their new premises as it was just land and in addition, they had recently purchased offices that required refurbishment.
Once approached, we acted swiftly to provide a ‘no cost’ desktop valuation of their fleet which was valued at c.£800K. Once the lender saw the strength of the business and following a subsequent underwriter visit, they were delighted to support over 5 years. The deal completed within a week and the client was delighted they could remove the shackles and strains on their business and move forward with growth plans thanks to the cash injection.
We complete numerous re-finance packages, both large and small which we find popular with our clients. Therefore, whether it’s to support expansion plans or re-shuffle the assets by extending the term or even help support a business purchase, please do not hesitate to get in touch. We have attached a helpful one-pager to provide an overview.
Engineering Business looks at efficiencies…
Our client, an established 159 year old business based in the East Midlands, was looking at efficiencies within the business and identified a requirement for a new CNC machine. After extensive work looking at options they discussed a new Hyundai-Wia machine with TW Wards of Sheffield, a supplier with an extensive history themselves going back over 140 years. As preferred funder partners to TW Ward we were able to discuss the purchase with the client and review funding options and structures – ideally minimum deposit and maximum term to support cash flow. The facility was approved within days and the £99k machine was delivered and operational shortly after. The efficiencies this machine brought meant processing was 2.5 times quicker and on shift patterns of 24 hours, which meant a huge increase in workflow enabling the business to increase their customer base and volumes.
At Affinity we pride ourselves in our pragmatic and professional approach, the customer was new to us but they were so impressed with our service and professionalism they are already discussing a factory tour and further investment through ourselves.
Accident Centre invest in fleet vehicles…
Our relationship with this customer dates back beyond 6 years, when we were first asked to fund a fleet of new courtesy vehicles. The business, an accident repair company, needs to constantly increase and renew their vehicle fleet on a rolling 3 year term basis to keep up with the huge demands and backlogs as a result of the COVID crisis.
Our initial request this month was a further 12 vehicles which we funded on competitive and flexible terms. We have now been asked to support funding for a variety of workshop equipment such as lifts, alignment systems and general garage equipment.
Through a combination of Affinity’s extensive panel of funders and knowledge and understanding of asset funding we are looking forward at a further significant investment by the client taking them into a fleet size of over 150 upwards and enabling them to take on further business.
We as a business also continue to grow as a result too, with record breaking deal counts month after month which is encouraging in this current marketplace. Thank you to all our customers and introducers for your continued support as always, we remain as committed as ever to help you and your businesses grow through supporting asset acquisitions.