Refinancing £130,000 To Fund Plant Hire Recovery Post-Pandemic
The COVID-19 pandemic led to enormous disruption in all aspects of UK business. While government-led initiatives have helped some businesses get back on their feet, others are left needing more support to revitalise their cashflow.
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In many cases, businesses that struggled during the pandemic are faced with something of a two-pronged challenge: they need finance to recover and grow, but raising said finance can be hard as lenders may struggle to overlook poor performance during and following the pandemic.
This presents an issue for businesses that need cash in order to diversify or grow: how can you raise money if lenders aren’t willing to lend? Many businesses, especially those operating in machinery-driven sectors like plant hire, agriculture, manufacturing etc have access to a useful finance option they may not even be aware of.
For a plant hire company that had struggled during COVID-19 and subsequently identified a need to improve cashflow over their quieter summer period, the option of asset refinancing helped them secure the cash they needed and get back on the pathway to growth. Their recovery was made possible through our work here at Rangewell, which focused on consulting individual specialist lenders, preparing their application and negotiating a deal.
Why was there a problem?
The plant hire company in question had encountered a slowdown due to COVID-19 and the subsequent economic downturn. Whilst they were recovering, they quickly utilised government-backed financial schemes to help stabilise the business. Once they’d exhausted that support, they were faced with an upcoming quiet summer period and no cash flow to secure the business.
After trying to discuss traditional business loans with lenders who refused them, the company approached Rangewell.
Why we were able to help
We spoke to the client’s team to build a robust understanding of their financial situation and the opportunities they had for raising credit. We identified three road sweeper vehicles with outstanding finance left on them which the client was still repaying to two separate creditors.
We then identified new lenders who would be happy to discuss asset refinancing, buying the debt from the other lenders and structuring a new agreement for the client. This allowed the client to release the equity they’d built in the sweepers, generating over £130,000 in cash they could use to grow the business.
Taking things one step further, Rangewell also negotiated a superior monthly rate over a longer term – meaning the client was repaying just 50% of their original payment despite unlocking a large sum of cash to use freely in their business.
Asset refinancing on encumbered assets
Asset finance can help businesses raise capital quickly, utilising existing assets as security for lenders. These assets don’t need to be fully owned – even if you still have outstanding payments left on an asset you can still seek a refinancing agreement.
Lenders will determine the value of the asset and your outstanding repayment to calculate the loan to value they offer. If you’ve been building equity for a number of years on a valuable asset such as plant machinery, you could potentially access hundreds of thousands of pounds to use to grow your business.
When negotiated with the help of an expert team like ours here at Rangewell, you can enjoy all the benefits of asset refinancing without facing a high monthly repayment. In many cases, we can slash your repayments significantly due to our experience in the sector and relationships with lenders.
Get in touch today if you’ve got assets you think you could refinance with and we’ll explore your options.