Cash still king in £10million+ Hire Purchase deal
Cash’s obituary has been written many times, but in many sectors – including property development - cash really still is king.
Find out how Close Brothers Leasing, Specialist Finance and their broker partner worked together to secure a customer a large cash sum raised against their extensive car collection…
Company Background
Our client is a property developer and classed as a ‘high-net-worth individual’ who was referred to us by a new introducer.
The Opportunity
Having readily available cash is critical for property developers because it allows them to respond quickly to opportunities in the market.
To enable this agility, they were looking to raise cash – north of £10m - against part of their extensive car collection to reinvest into property purchases, with security coming from part of their unencumbered car collection.
Solution
On the face of it, this would appear to be a straightforward deal to put together, but the large amount requested, and the eye-wateringly high value of the vehicles made it a challenge.
We understood that the keys to approval were to understand the client’s true worth and their level of liquidity to ensure that serviceability could be proven. This is not an easy task with high-net-worth clients who operate in multiple jurisdictions and often have complex corporate and tax structures in place.
In addition, the vehicles had to be independently valued and with only three vehicles offered as security, we negotiated for a greater mix to broaden our security reliance.
A common discussion point is valuation - we rely on a long lead time auction perspective, which can differ significantly from the price a client puts on their assets.
To reach an agreement requires a great deal of calm, understanding and explanation from all parties.
Structure
- A fully amortising Hire Purchase deal with 12 months initial interest-only
- Secured against four vehicles
- 60-month term
Outcome
Fully drawn down facility worth over £10m that was delivered in line with the client’s tight timescales, cementing 12 months of hard work and leading to further opportunities in the future.
Ross Appleby, Sales Manager: “This was a very pleasing outcome for all parties and clearly demonstrates the appetite and ability of Close Brothers Leasing, Specialist Finance to deliver asset finance facilities in excess of £15m in the current challenging environment.”
Products and services are subject to eligibility, status, terms and conditions and availability. All lending is subject to status and our lending criteria. The right to decline any application is reserved.
