A customer of MK Funding Ltd was seeking financial support to acquire a diamond cut alloy wheel lathe due to rising demand of alloy wheel refurbishment.
Established in the mid-nineties, the business provides three services – powder coating, wheel refurbishment and blast cleaning/shot blasting. There is no immediate local competition and business referrals come from garages, dealerships and body shops to this well established business. But as there is a high demand for the alloy wheel service, this is where the business wants to grow.
A gap in the market
The business owner has over 20 years experience in powder coating and metal refurbishment and has many long standing customer relationships. Over the last decade, many powder coating shops that carry out alloy wheel refurbishment have introduced a diamond cutting service as it provides a higher quality finish. The business has seen significant demand for diamond cut alloys and there is currently a gap in the market as no one currently provides this service in the local area.
In order to enable the business to provide this service and meet customer expectations, the customer approached Howard Shipstone at MK Funding to discuss financial options to support the purchase of a diamond cut alloy wheel lathe. Howard introduced his client to Michael Tyler, Broker Development Manager at Close Brothers Business Finance to discuss funding requirements.
Fulfilling high demand
Michael quickly realised that Howard’s client would be eligible for a Regional Growth Fund (RGF) grant as they were seeking to employ a powder coating technician. The purchase of the asset along with the additional employee would allow the client to generate more business.
The RGF application was successful and this coupled with a Hire Purchase agreement, allowed for a bespoke financial package to be put in place. MK Funding’s client could now purchase the diamond cut alloy wheel lathe and grow their business in response to the high demand for the alloy wheel service.
Howard Shipstone at MK Funding Ltd said: “The addition of this asset to the business will enable our customer to fulfil demand, generate more sales and increase profit. The creation of one job through RGF funding will allow the business to accept further wheel refurbishment work that they were previously unable to fulfil. Without the support of the RGF, our client would not have been able to take advantage of the gap in the market and grow the business. Michael Tyler at Close Brothers Business Finance quickly established that our client would be eligible for an RGF grant and supported this further with a Hire Purchase loan. He tailored a suitable financial package that met with our customer’s needs”.