Audio Visual Equipment For Visionary Property Development

Asset Advantage and Broker Partner Business Finance Trust have worked together to fund £113,000 worth of Audio Visual Equipment for a visionary property developer.

John Davies and Kevin Beevers, Directors at Business Finance Trust, have a long-standing relationship with this client, who is an award-winning property developer in Wales. The client has a lifelong ambition of creating a new model where there are high levels of social collaboration and interaction. To encourage people to reconnect in their local areas.

The client has significant achievements in acquiring and renovating substantial, quirky former industrial or business buildings (often listed) and repurposing them for contemporary leisure, office and residential use.

The client provides a real spark of quality to iconic old buildings in the centre of major cities in Wales.

About The Deal

The client was looking to fund AV equipment for their major site in Cardiff. They required speakers, amplifiers, control zones, TVs, Mixers, etc. to be installed around the building.

This is a strong client with a clear need for a business-critical asset. However, the proposal required a funder willing to take the time to understand the full picture, as not everything was reflected on the balance sheet.

The property developer owns seven large, impressive properties. Rather than developing and selling for immediate profit, their model is to retain the properties and generate income through rent, meaning the value sits beyond the balance sheet alone.

John Davies said: “In presenting the proposal I had to show the developer’s previous successes. Because they have been developing and keeping the buildings, rather than developing and selling them, nothing shows on the balance sheet until it’s crystallised.”

John Davies knew of Asset Advantage by reputation as a funder who would take the time to understand the full picture.

Asset Advantage were warm to the deal, and Philip Knight, Credit & Risk Director said: “A comprehensive and well put together proposal made the decision-making process a straightforward one. Plenty of evidence of an established business and experienced management. The underlying business case was a vanilla asset finance transaction for a discrete stand-alone property development project so whilst there was some 'noise' around the financials the core credit covenant is strong.”

£113,000 CapEx Term Loan to fund AV equipment on a 3-year term.

The deal was initially proposed as Finance Lease, however the client needed more flexible terms to pay the supplier. William Thompson, Trainee Broker Manager at Asset Advantage recommended a CapEx Term Loan, to give more control over the timing of the payments. This enabled the deal to be paid in 3 tranches to meet the suppliers’ terms. The VAT was also rolled into the loan, which helped the client’s cashflow, at this crucial last stage of the project.

John Davies said: “Asset Advantage’s flexibility in structuring the deal made the whole thing doable. It’s another thing you’ve done to make the whole thing work.”

John Davies said: “In 40 years of working for banks, and subsequently setting up my own brokerage, I have never met such flexibility or willingness to listen.

William Thompson has been fantastic, and Natasha Perryman from Documentation and Payouts has been great too.

It was a complex deal, and at every juncture you found a solution. This is exceptional service.

This deal fell between a property deal and an asset finance deal, and you guys listened which was just perfect.”