Broker: Enable Finance
Industry: Hire and sale of excavator cutting tool attachments
Product solution: Sale and HP Back
Quick decision and turnaround provides perfect funding solution
Enable Finance works with business owners and brokers to help them access the UK commercial finance market. It is focused on using technology to provide a service that helps towards a smoother process for its customers and prides itself on offering a comprehensive and professional service based on years of experience.
First to use hydraulics for cutting
Enable’s customer is a solution provider and specialises in the design and development of tool attachment technology to the construction, mining, nuclear and utilities industries. It was the first to use hydraulics for cutting. Over the years they have moved and diversified with the times by developing machines and attachments for the construction industry for shaft sinking and tunnelling and boom conversions for standard excavators.
The customer designs a range of attachments which are then manufactured on licence, mainly in Germany via a strategic partner. Once manufactured, the strategic partner has the licence to sell worldwide and pay Enable’s client a royalty on the worldwide sales.
The equipment for use in the UK is transported back to the UK and the client hires the equipment to various groundworks customers on a standard CPA hire contract. Assets in the main are also used for groundworks on house building and cross rail contracts.
Meeting at NACFB Commercial Finance Expo
The customer was looking to refinance three rock grinding attachments that were currently in use by a third party hirer on the new nuclear site being built at Hinckley Point in South West England.
Director and Owner of Enable Finance, Phillip Evans, introduced his client to Mark Gilman, Senior Broker Development Manager at Close Brothers Business Finance to discuss finance options for the assets. Philip and Mark had already discussed the requirements for the client and any next steps that needed to be taken when they met at the NACFB Commercial Finance Expo in June.
Refinance and Sale and HP Back product
Mark met the customer to gain a full understanding of the business and the assets it supplied. The client advised Mark that they have full audit trail of all assets on hire using industry standard Inspire software system which shows where the assets are currently working and to who they are on hire.
The customer had title to the attachments following “payment” under a netting off process. The supplier owed more to the customer than they were owed and agreed to supply the assets in lieu of payment which was fine, but the customer ideally wanted the cash for working capital and therefore an agreement was reached to refinance the rock grinders and a Sale and HP Back product was put in place over 48 months with 10% deposit with advance of £81,000 over four years. With the little debt in the business, this was easily serviced and Mark managed to complete the deal within a week.
Commenting on the deal, Phillip Evans, Enable Finance said:
“The end to end process and the time it took to complete this deal was outstanding. Considering that Mark and I first discussed my customer’s requirements at the NACFB expo towards the end of June and the deal was completed in early July, it is a testament to the Close Brothers ethos in ensuring a swift and efficient decision-making process.
As there is a substantial inter trading position between the manufacturers in Germany and the customer for royalties, the capital from the assets and the Sale and HP product puts my client in the best position to move the business forward.”