A transport owner reached out desperately seeking a solution to expensive unsecured loans with daily direct debits that were swallowing up $20,000 in repayments per week.
Before being introduced to us the problem unsecured loans had been put to the client by another broker as a working capital solution but they were anything but.
After the initial capital injection the loan repayments had crippled future cash flow.
Everytime the business owner was short of cash the only solution they could fine was to go back and reborrow from the expensive lender.
It was a debt spiral the business owner had been caught in for nearly 2 years.
Rather than looking at more unsecured lending we utilised the business owners significant fleet of unencumbered vehicles to raise capital.
Asset finance lenders will happily raise capital against equipment as a debt consolidation solution or a tax debt loan.
However they typically only lend up to 80% of either the orderly liquidated value or the force liquidated value at auction and not the market value of assets.
The orderly liquidated value would not have been enough to pay out the unsecured loans that were causing so much distress to the business so instead we turned to a Rent To Own provider with a capacity to settle large loans and they agreed to a ‘buy and rent back’ solution at 80% of the market value of the assets.
With the monthly repayments from the Rent To Own solution a fraction of the unsecured loans the businesses monthly cash flow position was immediately and massively improved.
The relief in the business owner was significant and their 50 year old family business was able to continue trading.
Reach out if you’ve got a debt that you want to consolidate using the assets in your business.
