RGF support allows business to cut contract ties
Start Point Finance Ltd is a leading provider of bespoke alternative business finance and working capital solutions in Devon. A client of theirs is a growing full commercial waste collection business, servicing a wide range of clients across Devon and Cornwall. They provide a range of internal and external waste recycling containers on site at customer premises which they then collect. Further to collecting and recycling general waste, they also offer collection and disposal of food waste, glass and clinical waste.
The business has three directors who are all greatly experienced in the industry and currently employ 19 members of staff. The founding Director established the business in 2005 as a sole trader and became incorporated in 2008.
The current business model and future plans
Currently, the business has contracts with its clients to collect their general commercial waste and sub-contracts this to the local authority to use their refuse truck for the area. This outsourcing costs the business £33k pa. This contract is due to come to an end at the end of 2016 and the business is not looking to renew the contract and instead bring the work in-house. Therefore the business was looking to purchase an additional new refuse truck to service its customers. The cost of financing the new truck will be similar to the annual cost of sub contracting to the council for this one shift. The new truck will operate two shifts per day and therefore have capacity to generate more income as well as cost saving.
Tim Jones, Start Point Finance introduced his client to Carole Luck, Business Development Manager, Close Brothers Business Finance to discuss finance options to purchase the new refuse truck. Carole found Tim’s client to be a good established business that is growing and ideal for a Regional Growth Fund (RGF) grant. Four jobs would be created from the purchase of the new truck which further supported the client’s eligibility for RGF assistance. Following a successful application, the client was awarded an RGF deposit of £33,485.63.
The ideal solution
With the RGF deposit granted, Carole was able to tailor the remaining financial requirements via a Hire Purchase product which would allow the client to own the new refuse truck at the end of the agreement.
Tim Jones, Start Point Finance commented, “It is evident that our client’s business continues to grow year on year, as it gains more customers who are keen to improve their ‘green footprint’. It made perfect sense to explore the financial avenues in order for our client to purchase the asset and move the business forward.
“The natural choice to introduce our client to in sourcing the best and most suitable package was Carole Luck and the team at Close Brothers. Carole quickly identified that with our client’s employment of two teams of two; one driver and a driver’s mate to retrieve the waste onto the truck over two shifts per day, serviceability will be demonstrated and by not renewing the current council contract, this is a cost saving to the business.”