Case Study

Upgrading Logistics Storage Facilities

Company —
Logistics Company
Business Type —
Logistics and Distribution
Requirement —
Racking and Storage
Solution —
Hire Purchase

Logistics and Distribution Business Expands Warehousing and Storage Offer With Finance

Take a look at how an established independent logistics, distribution, and packing business operating in the UK, committed to staying at the forefront of the logistics industry, recognised the importance of updating their warehouse storage racking facilities to optimise efficiency and accommodate growing demands. They sought out logistic finance options to make this modernisation possible.

Challenges Faced

As the business expanded its operations and took on more clients, they faced challenges related to warehouse capacity and organisation. The existing fit-out and storage racking systems were inefficient, leading to decreased productivity and higher operational costs. To address these challenges and maintain their competitive edge, the company decided to invest in modern warehouse storage racking facilities, necessitating finance for logistics businesses.

Finance for Logistic, HGV, and Supply Chain Needs

To tackle the challenge of financing the warehouse storage racking upgrade, the business partnered with Portman to provide tailored finance for logistic, HGV, and supply chain businesses. Portman’s expertise in HGV supply chain finance and equipment financing made them the ideal partner for the modernisation efforts.

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Benefits of Commercial HGV Transport and Logistics

  1. Enhanced Warehouse Efficiency: The new storage racking system optimised space utilisation and streamlined warehouse operations, resulting in faster order processing, reduced pick and pack times, and increased overall efficiency.

  2. Improved Inventory Management: With the ability to organise and segregate goods effectively, the business could manage their inventory more efficiently, reducing the risk of stockouts and ensuring timely deliveries to customers.

  3. Scalability and Future Growth: The modern storage racking facilities provided room for expansion, enabling the business to accommodate the growth of their business without the need for additional warehouse space.

Challenges and Solutions in Commercial Vehicle Management

  1. Capital Intensive Investment: Upgrading warehouse facilities involves a substantial initial investment, which could strain the company’s capital reserves and impact cash flow. Logistic finance from Portman provided the ideal solution.

  2. Economic Uncertainties: The logistics industry is subject to market fluctuations and economic uncertainties, making it challenging for businesses to predict future demand and revenue streams. Leveraging supply chain finance can help mitigate these uncertainties.

  3. Technological Obsolescence: With rapid advancements in warehouse technology, there’s a risk of investing in equipment that may become outdated in the future. Portman offers business loans that can be used to upgrade and replace equipment, allowing businesses to stay up-to-date with the latest technology and prevent equipment obsolescence.

Conclusion

Through strategic financing and collaboration with Portman the business successfully updated their warehouse storage racking facilities, improving efficiency, safety, and inventory management. Logistic finance and later, fleet finance, proved vital in addressing the challenges of modernisation and economic uncertainties. If you need to protect working capital or are interested in restructuring your current finances with affordable monthly payments, talk to one of our experts today.

Partner with Portman, for a successful future

There are plenty of finance options out there for you, deciding which is right for you will take time and consideration. But why should you choose these financing options from Portman?

At Portman Finance Group we are focused on serving the needs of you and your businesses, and have been doing so for thousands of other businesses since 2007, raising over £1 billion in funding for UK SMEs. 

We take the time to truly understand your business and what you need, ensuring we secure the right funding for you. As both a broker and a lender, we can also offer financial options that others cannot. We promise you will have one point of contact from start to end, providing you solutions quickly, sometimes within hours.

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Hire Purchase

Hire purchase usually involves paying the VAT and a deposit up-front. Fixed monthly repayments are then made, affected by whether you pay off the entire loan over the term or chose a final balloon payment. The final option to purchase is guaranteed for a nominal fee, transferring ownership of the asset to the customer.

Hire purchase is well-suited for situations where a company definitely wants to own the item at the end of the term, often where the asset has a significant usable lifespan, a high residual value and will not need to be upgraded.

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Lease Finance

Equipment leasing allows a business to acquire hard or soft assets without the upfront costs associated with large purchases. A lender purchases the item, the business then leases it through fixed monthly payments over an agreed term.

Typically, asset finance is provided for high value ‘hard’ assets such as machinery, equipment, or vehicles, but Portman also arranges asset finance for ‘soft’ assets such as IT, fitness, catering, or vending equipment, as well as premises fit-outs, furniture or even air-conditioning.

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Business Loans

Business loans are a way of borrowing money, which is repaid in monthly instalments, including interest, over an agreed term. Business loans are a common way to help smooth out cashflow fluctuations and take opportunities where otherwise they could be missed due to a lack of working capital.

Business loans can be secured or unsecured. Portman typically provides unsecured loans which can be more flexible and do not require collateral but are likely to require a personal guarantee. Secured loans are tied to an asset which the lender can claim ownership of if repayments are not made, these may be used in equipment refinance deals.

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Start Up Loans

New businesses often need an injection of finance to get them off the ground. Asset finance for new businesses allows you to focus on running your company and bringing in customers, confident that you have the equipment, vehicle or stock you need without the large initial outlay.

Using finance for your equipment means that you preserve the credit card or overdraft for contingency and operating expenses when the unexpected happens.

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Equipment Refinance

If you recently bought a high-value item outright but would now prefer to have financed it, we can help with a sale-and-lease-back agreement. If the item is less than 3m old, give us a copy of the invoice and we will calculate the current value. After a few checks and acceptance of the term and monthly repayments, we can give you the cash equivalent of the invoice to put back into the business. You’ll then make fixed monthly payments including interest, whilst your asset earns you money.

If your business owns high value assets that are not currently on finance, subject to a valuation, it is also possible to use them as security for a loan, with lenders offering a cash loan up to a % of the asset’s value.

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Recovery Loans

Recovery Loans offer an excellent way of making sure your business gets back on its feet after the long-term effects of the pandemic and subsequent supply chain disruption. Businesses with turnovers up to £45m, including those who have previously benefited from the government’s CBILS, BBL or RLS, can apply.

Recovery Loans can be used for any legitimate business purpose or simply to provide cashflow. Rates are capped and the government continues to guarantee 70% of the outstanding balance, giving added security for lenders who are now able to consider finance for businesses who may have previously found it difficult to obtain.

Up to £2m can be borrowed on terms from 2 to 6 years. Your personal private residence cannot be taken as security.

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