Case Study: Stocking Finance for Vehicle Converter

The Challenge

The VW van converting company faced a significant challenge in scaling its operations due to limited cash flow. As demand for customised vehicles grew, they needed to buy multiple vans for conversion but did not have sufficient liquidity to afford these purchases outright. This limitation not only restricted their capacity to meet customer demand but also constrained their ability to compete effectively in the marketplace. The lack of available capital forced them to request upfront payments from clients, which created trust issues and hampered customer relationships. The business needed a financial solution that would enable them to acquire vehicles more flexibly - ideally a tailored form of stocking finance for vehicle converters, allowing them to realise their growth ambitions without adversely affecting their cash flow.

Our Solution

To tackle the cash flow challenge, it was identified that they required an initial financing facility of £250k. This facility was structured to allow for quick access to funds, ensuring that the business could act promptly in vehicle auctions without waiting for cash reserves to accumulate. The car stocking finance arrangement was set up in a matter of days, coinciding perfectly with an upcoming vehicle auction. We also provided support in educating the business about leveraging this financial tool effectively, which was a revelation for the team. By minimising the cash outlay needed to procure vehicles, they could keep a healthy inventory and cater to a larger client base without requiring upfront payments. This strategic financial arrangement not only facilitated immediate purchasing power but also established a foundation for ongoing growth by increasing their operational capacity.

The Result

As a result of the financing facility, the business successfully increased its turnover, diversified its vehicle offerings, and expanded its customer base. The ability to purchase vehicles with less cash outlay also eliminated the need for upfront payments from customers, fostering increased trust and business growth. Within just nine months, the financing facility was increased to £500k due to the positive impact on operations.