Here’s how a tailor-made Hire Purchase agreement has allowed a successful business to recover from the effects of COVID-19 and continue with plans to grow and expand.
The business wanted to purchase two new assets at a total cost of over £1 million. These assets would allow for an increase in additional output requests from current customers, reducing the need for outsourcing work and ultimately with a view to expanding the business in the future.
Pre COVID-19 it was agreed that these assets were needed, but as the pandemic hit, this was put on hold in the hope that it would only be a short-term delay. As the severity of the world-wide situation unfolded, it seemed unlikely that the purchase would be able to go ahead.
Close Brothers Asset Finance already had a great working relationship with the customer, dating back to 2010. On hearing about the government’s release of the Coronavirus Business Interruption Loan Scheme (CBILS) and that Close Brothers were an accredited lender under the scheme, the business contacted them straight away for not only their financial expertise but also for their industry knowledge.
A Hire Purchase agreement was found to be the ideal solution and considered all current factors, ensuring affordability for the customer. By using the CBILS for this agreement it also meant that the customer did not have to pay any upfront costs and there was no interest for the first 12 months.
With the finance in place, the customer was able to purchase the machines, meaning they would be able to take on the additional work. A forecast was created demonstrating the positive impact the new machinery would have on the performance of the business which clearly verified the machinery was essential for growth and recovery of income lost due to COVID-19.
Close Brothers Asset Finance commented: “It’s great to be able to support our long-standing customers to stay afloat in the current situation. It’s a tough time for all businesses and Close Brothers are doing everything they can to be able to support SMEs with asset finance, in the hope that they can be successful in the future.”
The customer said: “Given current circumstances, many other businesses would not have even considered lending to us. I knew Close Brothers Asset Finance would consider factors other lenders would not. The deal has allowed us to continue our plan to grow and recover from the effects of COVID-19.”