Ever thought of capital raising?
This is when the bank lends you money against an asset you already own, for the value (or near enough too) of that asset.
In years gone by (read, after the GFC) this was a near impossible scenario.
However in recent months, we now have access to several finance companies who are happy to look at this type of situation.
Recently a client needed to do a gear box and engine re-build on one of its older trucks. The client had financed the truck through his own bank, and when they approached that bank to get the funds to do the repairs, they were told that “the company should have enough working capital to fund this expense”.
The company approached Laurentide in need of a solution having been referred to us by a mutual acquaintance.
There were a couple of ways we could have approached this transaction.
If the truck was towards the end of the current finance term we could have simply obtained a payout from the bank and refinanced the vehicle in its entirety including the new works being done to it. Unfortunately in this circumstance the early termination was such that it was not economical to proceed this way. We would also have had to ensure the truck valued up enough in order for the financier to be comfortable with this transaction.
Fortunately, the client had several unencumbered trailers it could offer as security, so the capital was raised against these instead and used on the truck for repairs.
This was a win win for both client and financier.
Most importantly the client could get its truck back on the road and back earning an income.
If you have unencumbered wheeled assets and require funds to re-invest in your business, then give us a call and we can help find the best solution for you.
Written by Bill Vincent