WestWon Acquires First Leasing UK Limited

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WestWon are pleased to announce the acquisition of First Leasing UK Limited.

Not to be confused with, First Vehicle Leasing, 1st Leasing or First Leasing Software – companies with a similar name – First Leasing UK Limited was set up in 2002 by Paul Connell.

First Leasing is a leasing and asset finance broker and works with a range of well-known funders in the UK. The company does not have an own book position.

The company has a range of business loan clients and recently completed a number of CBILS loans. The majority of the client base are for companies who have leased equipment.

Speaking on behalf of WestWon, CEO Jeremy Hall noted, “We very much appreciate Paul Connell selling us his business and trusting us to look after his existing client base. Over time, we will be contacting all of their clients to introduce ourselves and to start the process of developing a longer-term relationship with them to act as their leasing company.”

First Leasing is the fourth acquisition by Jeremy Hall / WestWon this year. With regards to First leasing, in client numbers terms, this was a modest acquisition adding a few hundred customers onto what is a growing client base.

George Shillingford who is heading up the project internally at WestWon was pleased to add, “We are enthusiastic about buying either a leasing company or the IP (mainly the client base). In the case of First Leasing UK Limited, we acquired the company. We do have a specific use for this business going forward.”

We acquire leasing companies for five reasons:

  • Client portfolio
  • Employees
  • New supplier relationships
  • New funder relationships
  • End of term income

George further noted” Every acquisition is different. In the case of First Leasing, we have satisfied three of the five criteria, the company does not have incumbent staff that are staying with the business or providing funder relationships we were not already trading with.

Our primary aim is to build our end user client base. We know from over thirty years of leasing and asset finance it is ten times easier to sell back into an existing client than find a new one by cold calling. It is not just that you are a known entity, but a trusted name. It is down to the culture of the client’s business and their perception to how their business should and can be funded.”

We thank Paul Connell again for the opportunity and look forward to working with First Leasing clients and suppliers.

Should you be a leasing broker that is looking to sell your business, please contact George Shillingford at WestWon for a confidential conversation on 01494 611 456.

Will asking for a lease payment holiday period affect my ability to take out a new lease agreement?

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Lease payment holiday requests in the UK Over the 30 years we have been arranging leasing and asset finance for 25,000 plus organisations, we typically only see a handful of companies every year asking for a lease payment holiday. Since the outbreak of COVID-19 in the UK, we have seen more businesses applying for a […]

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Will a Bounce Back Loan or CBILS Loan affect my ability to obtain lease finance?

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From conversations we have held, many SME companies who have undertaken a lease via WestWon have confirmed to us they have taken out either a Bounce Back or CBILS Loan.  A number of these business owners have directly asked us asked the question, “Will my Bounce Back Loan (or CBILS Loan) affect our ability to obtain lease and asset finance in the future?”

The implications of a Bounce Back Loan on your balance sheet

Let us firstly look at the financial implications on your company balance sheet. (We have assumed you have taken out the maximum loan allowable under the Bounce Back scheme of £50,000.)

You have created a current asset, cash of £50,000. Likewise, you have added a long-term current liability of £50,000. We say a “long term liability” as the loan facility repayments will start in twelve months. Hence your Net Current Assets position will remain unchanged.

Bounce Back loans being an insurance policy or used to reduce existing debt

Quite a few companies we have spoken to have taken a Bounce Back Loan as an insurance policy. They have put this money aside and presently are not using it to fund the business. This makes financial sense and is a prudent thing to do.

Likewise, there are company directors who have used a Bounce Back Loan to clear off an existing company overdraft or to reduce an existing bank loan. Again, there is a clear financial benefit here, you are clearing historic debt down almost certainly at a higher interest rate. In the background, we know that people are using the Bounce Back Loan facility to get out of banking agreements where they have a personal guarantee.

From the perspective of obtaining a new lease, the two options above would not have any impact on your future ability to obtain lease finance.

Using a Bounce Back Loan to invest in your business

We have spoken to other companies using a loan to put down as a deposit on a commercial vehicle. Another company has used a CBILS loan to pay a rental deposit on a new building. Others have used it to buy stock or build a new website.

These are all legitimate uses for the Government backed loan and will not affect your ability to raise new leasing and asset finance in the future. However, we would like to add, we must tell the underwriter:

  1. Have you taken out a Bounce Back or CBILS loan?
  2. What have you used the loan for?

Using the loan to tide you over whilst business income has been reduced

Most companies are using the loan to help cash flow whilst sales and profit are down, again a legitimate and sensible use of the facility.

Leasing companies must lend to stay in business. If they do not lend, then ultimately, they will look to reduce costs and “wind down their lease portfolio.” The job of their underwriters is to look at all prospects customers and ask themselves one simple question, “Will this company be able to afford to make the 36/60 monthly repayments and will they still be in business at the end of the lease term?”

To make their task easier, underwriters now require most lease proposal forms to have a COVID-19 attachment. This is a one-page document that we can help you fill in. Its primary purpose is to illustrate what steps you have taken to keep trading and how the pandemic has affected your business.

So, going back to our original question using this example, will a Bounce Back Loan or CBILS Loan affect my ability to obtain leasing finance? We would say no. However, there is a big caveat here, our job is to positively explain why you have taken out the loan and more importantly, what steps have been taken to protect your business.

Summary

There are many different reasons for taking advance of a government backed loan, some positive and others negative.

All underwriters will take into account the effects on a company’s longer-term cash flow when they have to start paying back a Bounce Back or CBILS loan. Also, not forgetting how COVID-19 has affected the business.

With most new lease proposals, we will look to ask a number of questions around the impact of COVID-19 on your business and if / why you have taken a loan out.

Our job is to arrange finance for your company, our doors have always been open for business so if you have taken out a loan, please feel free to call us for all your leasing needs.

Garden office pod finance

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The market for garden and home offices has exploded since March. One supplier we have just spoken to has stopped all advertising, they cannot keep up with demand and are busily recruiting new installers.

Garden office pods – as these home offices are typically referred to – is the latest must have for business owners. Even though available on Google from £3,000.00 + VAT, many business owners are spending between £20,000 and £40,000, and some buildings costing as much as £75,000. Kitchens, bathrooms, a meeting room and office space are a prerequisite for companies with a small team of people.

Two key questions are being asked:  Who pays and how are they financed?

Who pays? – is this an asset financed in a personal capacity or paid for by a company? It seems that there is a mixture of both. Buying in a company name is a legitimate business expense, even though they are located at the home of the business owner.

How? – Individuals and companies have been paying for garden office pods as a cash purchase.

Garden office pod finance and leasing

However, things are changing. It is now possible to lease a garden office pod for business use. There are some really good benefits to this:

  • The company can reclaim the VAT on rentals
  • Leasing a garden pod ensures you can get full tax relief on all the rentals, over the three or five year lease term you can fully amortise the cost of the building
  • You pay for the garden chalet as you use it, the same as you would do paying rent for an office
  • You do not have to fund the cost by cash upfront

How leasing and finance is helping people buy a garden office pod

The key issue why companies are not looking at a garden office is normally due to the fact they cannot fund the £10,000 to £75,000 cost out of cash flow. Leasing overcomes this issue.

As an example, a £25,000+VAT building would cost about £550 +VAT per month over five years. Significantly less than paying a third-party company rent, rates and service charges, as well as time and travel expenses. The fact that all companies will look to take ownership at the end of the lease period is a key factor.

Can you lease an office pod for a private individual?

No, leasing is only available to companies. Private individuals would have to use their own money or take out a personal loan / extension to a mortgage.

Can you lease a garden office pod even though you have another office / warehouse / factory?

Yes, we are leasing office pods to companies where the director(s) wish to work from home a few days per week.

How does the process of leasing an office garden pod work?

You choose the supplier and office pod design.

You would still need to ensure you have all the correct planning applications – if appropriate – in place. It may be such there are restrictions on you or your colleagues working from the home environment.

We then take the supplier quote and will provide you with a leasing quote.

We arrange for the leasing credit to be put in place and send you lease paperwork.

The supplier then installs the building, they will require a deposit which will be refunded to you when the lease agreement goes live at the point of completion.

Our funder will pay the supplier invoice and then you make a regular monthly lease repayment, normally over three to five years depending on your budget.

Overall, it is a very simple process.

Who will finance or arrange leasing on a garden office pod?

We do. Please call WestWon on 01494 611 456 for more information and a formal lease quote.

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