Breaking the Hire-Purchase Cycle: £115K Funding Package Paves Way to Major Contracts for Construction Business
Company Sector: Construction & Plant Works
Loan Types: Asset Finance & Short-Term Loan
Loan Amount: £115,000
Loan Purpose: Purchase of plant & short-term cashflow
The Challenge
Proudly delivering high-quality building work for homes and businesses, our client had reached a pivotal growth phase; they had secured several large contracts but lacked the immediate cashflow and assets to begin the work efficiently. As the business did not own assets, they were relying on costly plant-hire, adding further pressure to cashflow. Compounding the issue, the business was carrying credit issues from prior years (including a CCJ) and their HMRC payments were overdue.
Our Solution
We reviewed the situation and created a staged plan to tackle both the immediate cash requirement and the longer-term need for assets.
Short-term Loan
We secured a fast £20,000 short-term facility so the business could begin their contracts immediately and settle their HMRC debts. A short-term loan was ideal for this client’s situation, providing fast access to funds with the knowledge that they could repay the loan once the contracts started and payments started to flow. Repayment of the loan within a short time-frame meant the interest payable was limited.
Tier-1 Asset Finance
Once the immediate issues were addressed, we sourced Asset Finance with a Tier-1 lender for a dumper, excavator and lorry. The Asset Finance was structured to provide an affordable, longer-term solution. This reduced ongoing hire costs, improving their margins and the assets strengthened their balance sheet.
The Results
Total funding secured: £115,000
- £95,000 in Asset Finance (across three pieces of equipment)
- £20,000 Short-Term Loan
- Immediate impact: The short-term facility allowed our client to start the contracted work on time, avoiding costly plant hire and preserving relationships with a major client.
- Operational benefits: Ownership of the dumper, excavator and lorry reduced hire expenditure, improved efficiencies and increased margins.
- Financial benefits: Improved cashflow, a cleaner credit profile and avoidance of HMRC penalties.
- Strategic: The business moved from a reactive stance where they relied on hiring, to an improved financial situation, providing a strong base for planned growth and expansion.
If you're facing similar challenges and want to explore the options available, get in touch 01832 770 273
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