- Client: Long-established UK logistics business
- Asset: Worth £200k+
- Loan Amount: Circa £200k
Enness was approached by a long-established UK logistics business that had been operating since the 1970s. The company had an established relationship with a high-street bank, but changes in the bank’s lending appetite meant that it was no longer able to provide the additional finance the business needed.
The client had already purchased two high-value assets using cash and wanted to refinance the purchases quickly. With only seven days available to secure the required funding, the speed of the transaction was just as important as finding a cost-effective structure with a high level of leverage.
Rather than pursuing a conventional asset finance structure that would require the business to contribute a significant deposit, Enness looked across the wider lending market for a solution that better matched the client’s circumstances.
We identified a challenger bank offering a ‘VAT only’ deposit structure. This meant the lender could provide funding equivalent to 100% of the value of the assets, with the client only required to contribute the VAT element. This significantly reduced the amount of capital the business needed to commit while allowing it to release cash that had already been used for the purchases.
Enness secured the facility at a flat rate of 3.88% over approximately three years. The structure provided the high level of leverage the client was looking for while keeping the cost of borrowing competitive.
The speed at which the finance was arranged was particularly important. Because the assets had already been purchased, the business needed a lender capable of moving quickly and working within the seven-day timeframe. Enness’ understanding of the specialist asset finance market allowed us to identify a suitable lender without limiting the search to the client’s existing banking relationship.
The case demonstrates how established businesses can sometimes benefit from looking beyond their incumbent bank when lending appetite changes. A strong trading history does not necessarily mean an existing lender will continue to offer the same level of funding, and alternative lenders can provide structures designed around the specific asset and cash flow requirements of the business.
For businesses looking to finance high-value assets while preserving working capital, asset finance can provide a flexible alternative to using significant amounts of cash upfront. Enness works with a broad network of lenders to identify bespoke corporate finance solutions for established and growing businesses.
If you are considering finance for new or recently acquired business assets, speak to a mortgage specialist to discuss your requirements.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal or tax advice. Finance is subject to status, underwriting, asset assessment and lender criteria. Terms and availability will vary depending on individual circumstances and the proposed transaction.
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