Equipment Refinance

Cash flow is critical to any business – the saying goes that “cash is king”. In an ideal world business cash flow would be easy to predict, stable and regular. Unfortunately, this isn’t often the case and taxes such as VAT which are due quarterly in varying amounts can cause unwanted cash flow issues.

We were approached by a commercial laundry to help them with just such as cash flow problem.

They had a VAT bill due in the cash flow critical pre-Christmas period but didn’t have the funds available to settle it immediately. Traditionally they had prudently kept funds aside for tax and VAT payments but due to landing a new, large contract (which increased turnover by nearly £500,000 per year at good margins) had used the money to invest in stock and equipment.

The introducing broker had explained the various financing options available to them and the customer had decided that taking a longer-term refinance option gave them affordable monthly repayments as well as lowering the personal risk of any guarantors (especially when compared to options such as unsecured business loans).

We undertook a site visit to re-inspect the equipment being refinanced, drew up the paperwork and revisited to sign the agreement all within a week to ensure a speedy release of funds. However, this was delayed whilst we waited for an invoice from an existing funder for a piece of equipment we were refinancing and our Christmas closing date was missed. Nevertheless, our Directors worked out of hours to ensure that the funds were released and paid to HMRC on the 24th December, giving the customer peace of mind over Christmas.