New purchases in coach and bus businesses often require funding. Our specialist providers are here to understand and meet operators’ needs
In 2022, there were around 3,500 new coach, bus and minibus registrations in the UK, with many of these vehicles requiring funding. Close Brothers Asset Finance has been doing this for customers looking to buy new, or upgrade existing fleets.
John Fawcett, CEO of Close Brothers Asset Finance’s Transport division, explains: “There are various products that come under the broad umbrella of asset finance, with one of the key ones being refinancing or capital release; it’s a proven way to make your assets work for you and release cash back into the business.
“It’s pretty straightforward and works by the finance company purchasing the asset and financing it back to you, with repayments calculated in line with the income the asset is expected to generate; at the end of the refinance term, you own the asset.”
Other examples of asset finance Close Brothers offers includes hire purchase (HP) and finance lease.
HP allows the customer to buy the equipment on credit. The finance company purchases the asset on behalf of the customer and owns it until the final instalment is paid, at which point the customer is given the option to buy it.
With finance lease, the full value of the equipment is repaid to the finance company, plus interest, over the lease period. At the end of the term, the company can choose to continue to use the asset by entering a secondary rental period; sell the asset and keep a portion of the income from the sale, or return it.
John adds: “Each product is tailored to a customer’s individual needs – it’s not one size fits all. Our evolution is about ensuring we’re flexible to customers’ changing needs, offering agreements that fit their cash flow requirements at a given point in time, rather than merely providing a standard vanilla offering.”
Asset Alliance Group funding
Asset Alliance Group (AAG) has expanded rapidly in recent years to become one of the coach and bus industry’s major specialist vehicle funders. Today, it provides free and independent advice on the multiple leasing or HP options available to coach and bus operators.
AAG has funded over 2,500 coaches and buses since 2016, financing fleet upgrades – from minibuses to multi-million pound investments – for many of the leading national and regional bus operators throughout the UK. And AAG continues to support the transition to electric of a large part of the nation’s bus fleet.
The supplier’s team is spread around AAG’s four regional offices across the UK. “We have established our reputation on customer service and our ability to work closely with clients to offer a range of flexible finance options for coach and bus fleet upgrades,” says Marketing Director Grant Law. “The consultant team includes five of the most senior and experienced coach and bus specialists in the UK, and is backed by significant funds thanks to the ownership of Arbuthnot Latham bank.”
AAG provides two main financing options:
- Directly from its own funds, giving it control over rates and residual values which “creates very competitive pricing”
- If customers prefer a third-party funder, AAG can take the proposal to a large number of finance companies in its broker platform and negotiate better rates than independent operators.
“For more information about AAG’s range of funding options for the coach and bus industry, our team will be happy to talk through how to secure the right finance for any vehicle or general asset requirements of your business,” adds Grant.
Listen, solve, deliver
“Finance made simple” is the mission at Omni Commercial Asset Finance.
“Omni takes time to get to know you and your business, in order to best understand both your immediate requirements and future growth plans,” says Director John Frost. “We aim, not just to be a finance broker, but also a trusted partner for your business.”
Omni Commercial has 14 years of specialist coach and bus industry experience, meaning it “knows the ever-evolving lending market inside out” enabling it to quickly establish where best to place operators’ business. “We work hard on your behalf to secure the most competitive terms to suit your needs,” adds John. “As part of the UK’s largest broker network, we have collectively become one of the largest introducers to our comprehensive panel of varied finance providers. This gives us early access to new funders, incentivised rates and flexible terms.”
Omni works diligently and efficiently to get deals paid out quickly, so operators can have their vehicle on the road as soon as possible. “And it’s not just vehicles we finance – we can finance pretty much any asset,” adds John. “We also offer other commercial lending products: Commercial loans and mortgages, and invoice finance. Got an unusual requirement? Why not put us to the test? We pride ourselves on offering competitive terms and exceptional personal service. I believe our growing, loyal client base bears testimony to this.”
Cash is king?
Managing your business’ cash flow is essential to growing operations and meeting customer demand. Acquiring a new vehicle often plays an important role in supporting your growth, but if you don’t opt for the right cash flow friendly solution, it can have a huge impact on your business capital.
Moorgate Finance has decades of experience in arranging finance and thrives on finding the right solution for its clients, however bespoke they may be.
Finance ‘as agile as your business’
When it comes to finding the right finance solution for its customers, Moorgate says it likes to take a thorough and tailored approach to understanding their business profile. “In the coach and bus sector, we understand that some businesses operate more over the summer period and run fewer units in winter,” says Commercial Director Adam Drawwater. “We will work with you to create a payment profile that reflects low or no payments in November and December. This solution can help to maximise your cash flow during lower turnover periods.
“If you need to sell a unit privately, rather than as a trade-in, or have a cross over, due to paint or wrapping, our delayed deposit solution can provide your business with a short period of positive cash flow. This solution can also allow your asset to generate an income before any payout is required. It can also help you to secure more competitive rates and terms for a lower monthly rental rate.”
Making the most of tax efficiencies is an important part of any businesses. With more companies claiming Annual Investment Allowance, HP has become the steadfast of the industry for purchasing assets. Under HP terms there is normally a requirement to pay the VAT up front. Moorgate can offer an option to defer the VAT for up to three months, which can be a huge boost to cash flow.
Solutions that support growth
As businesses grow and develop, their business needs can become more complex. Moorgate’s invoice finance/factoring offering has helped customers to improve their cash flow by releasing equity and providing the scope to fulfil new contracts, capitalise on bill or receive debt protection. “To meet O-Licence requirements, we have seen businesses borrow the money and spread the cost with a business loan,” adds Adam. “Our specialist team can also offer funding for a range of assets people wouldn’t necessarily think of funding. From office refits, Portakabins, yard relaying, security fencing, CCTV and even software, as well as refits of existing vehicles, including repairs or new engines.
“Commercial mortgages, both for new purchases or as rates come up for review, have become increasingly important. As rates continue to fluctuate, it’s important to stay on top of long-term commitments and look at length of term to ensure the monthly payments do not hurt your cash flow.”
Partnering business growth
With the right finance partner, operators can not only save time and money, but also inject their business with ‘outside the box’ thinking to boost cash flow.
Moorgate thinks creatively to deliver cash flow friendly solutions, working in partnership with its customers to support their growth ambition.
Spread the cost of workshop equipment
Spread the cost of workshop equipmentDoes your workshop need upgrading? Totalkare’s flexible finance solutions make it easy. It has a variety of solutions to suit every workshop with low monthly payments which can be less than the cost of an hour’s labour per week.
“Avoid an upfront cost and reap the rewards today by spreading the cost of any new workshop equipment you require with our range of flexible finance solutions,” says Marketing Executive Pavan Jheeta.
Some of Totalkare’s available finance solutions include:
- Lease hire: Fixed monthly payments cover the rental of the equipment and full repair and maintenance service for the duration of the term. Operators will not own the equipment and will return it at the end of the term
- Lease purchase: Similar to lease hire, except operators own the equipment at the end of the term. The equipment is paid for via an initial deposit, low monthly payments, and a final balloon payment at the end of the agreement
- Short-term hire: Totalkare offers short term hire on mobile brake testers (minimum term three months) and mobile column lifts
- Low start finance: Totalkare can offer a low start finance package with weekly payments that can be less than the cost of an hour’s labour
- Zero deposit: Take advantage of Totalkare’s zero-deposit finance (subject to terms and conditions)
- Outright purchase: Purchase Totalkare’s equipment outright, with the backing of a service contract for years of use.
“The sooner you do it, the sooner you will reap the rewards,” adds Pavan.
