Story threeee

Challenges

One of our key clients needed a financial solution to invest in a new d&b KSL speaker system to service larger events at a Manchester venue, which presented specific challenges. The investment was critical to the business as without the new speaker system the client faced the risk of losing the existing smaller jobs that they were currently servicing.

The KSL system required a significant investment of £354,000. Our client needed a solution to make this investment affordable on a monthly basis to avoid overstretching their cash flow. The limited size of the customers balance sheet meant we knew this was not a transaction that that we could get funded with one lender, it was going to need to be syndicated across a few lenders.

Our Approach

We leveraged our expertise and network of lenders to address these challenges by providing a comprehensive financing solution. We understand that the lifespan for d&b speakers is 10-15 years and that these speakers are highly sought after, holding very good resale values. Having discussed the target monthly repayment with the client we identified the need to deliver a 7 year financing solution. Most lenders standard credit policy restricts lending on speakers to 5 years however we worked closely with our lenders to identify a selection that would consider the application on a 7 year term. We needed to demonstrate to these lenders the value and lifespan of the equipment extended beyond the proposed 7 year term. Having a close relationship with the supplier was key to this transaction as it enabled us to gather real life examples of current and historic second hand sales of d&b systems. In addition to this we worked with a professional valuer to secure a valuation giving the lenders the required comfort to consider our applications over 7 years.

Result

We secured the total investment amount of £354,000 financed across 2 lenders over a 7 year term on a Hire Purchase facility with a 3 month vat deferral. The financing terms secured allowed the client to make the KSL system investment affordable whilst ensuring he maintained existing work and providing the opportunity to secure new additional revenue.

The time to secure the approval from the initial application took 7 days and the equipment was delivered on the day of approval. All documentation was signed 3 days later, the agreements were activated and payment received by the supplier 1 week after delivery including a bank holiday weekend.

Since taking delivery the customer has already secured very good levels of work for the new KSL system and currently they have generated income that will cover the next 5 months of repayments which they are very pleased with.

If you are considering new equipment investments and you would like to explore different financing solutions then please talk to one of our team who will be happy to provide advice and help tailor a financing solution to meet the needs of your business.