A growing logistics company based in Scotland approached Moorgate Finance looking for a more cost-effective way to fund their fleet The business wanted to move away from expensive rental agreements and secure ownership of their vehicles, but previous attempts to obtain finance had been met with obstacles.
The Highlights
✅ £10,000 VAT loan arranged to facilitate the purchase.
✅ Replaced £4,200 monthly rental costs with hire purchase.
✅ Saved approximately £3,000 per month over 36 months for the logistics business.
✅ Improved cash flow and strengthened the balance sheet.
The Challenge
The logistics company was currently renting three vans at a cost of approximately £4,200 per month and wanted to transition to a hire purchase agreement, with plan to add a fourth vehicle in the near future. Unfortunately, the process had not been straightforward. The business had been declined by some lenders, while others offered finance at interest rates that would have made the deal uneconomical. On top of this, they had been let down by several brokers who failed to provide a clear route forward, leaving the directors frustrated and unsure of their options.
One of the biggest barriers was the upfront VAT payment required to complete the purchase. Although the business was financially stable and performing well, finding the cash to cover the VAT created a challenge that prevented them from moving forward with the transaction.
The Solution
After taking the time to understand the logistics company’s goals and financial position, Moorgate Finance developed a tailored funding strategy to overcome each obstacle. To address the immediate issue, we arranged a £10,000 short-term loan to cover the VAT cost, allowing the transition to proceed without placing unnecessary strain on the company’s cash flow.
Alongside this, we secured a competitive hire purchase facility for the three vans of £37,000. By moving away from their rental agreement and into ownership, the business was able to significantly reduce their monthly outgoings while investing in assets that would strengthen its balance sheet over time.
The client had spoken with a number of competitors before approaching Moorgate, but felt that many were focused on selling a product rather than understanding the wider needs of the business. By presenting a clear, practical plan that prioritised the company’s long-term interests, we were able to build trust and provide a solution that delivered real value.
The switch from rental to hire purchase transformed the economics of the logistics company’s fleet funding. Monthly vehicle costs reduced by approximately £3,000, creating substantial savings over the 36-month term while allowing the business to build equity in its vehicles. The funding structure also preserved working capital by addressing the VAT challenge and positioned the company for future expansion, including the addition of further vehicles as the fleet grows.
Need funding solutions like these for your business? Give us a call on 01908 92 62 62 or head to www.moorgatefinance.com/apply-now to start the conversation.
