Master Lease: Funding in the spotlight

Funding spotlight: Solutions for Suppliers – Master Lease

The Credit Asset Management team was approached by a supporting broker who had a key supplier with a large, long-term project which was potentially going to cause them cashflow constraints on installation. 

The supplier’s client was an international logistics company with a number of sites across the UK and sought funding to undertake a security upgrade on entry and surveillance equipment across its various locations in the UK. 

Large scale technology upgrades are notoriously complicated and can take time to deliver and fully implement. Add in multiple suppliers and without warning such projects can often present a challenge when managing payments to third parties and business cashflow. 

The conundrum for the supplier was how to deliver on one of its largest contracts without it causing a detrimental impact on the rest of its business. 

While seen as a major upgrade for the company, the installation of equipment was scheduled to take place at intervals over a 12-month period. In order to satisfy the agility of the company and help it meet its roadmap for upgrade, CAML provided the customer with a million-pound Master Lease facility for utilisation over one year.

The broker had dealt with the supplier for a number of years, and the logistics company was able to show a strong operating model, with solid financial performance and a perfect repayment history on previous funding facilities. 

A Master Lease facility allowed the customer to draw down the required amount for each site when appropriate. This ensured that they were able to manage payments to the supplier when they were satisfied the assets were in order. Crucially, it also allowed the equipment supplier to be paid at regular intervals during the roll out of works, as opposed to having to wait for the final installation to take place before receiving full payment. 

The client said: “The master lease was a great option to support us with this major upgrade project. It provided us with one master set of terms for the whole project, enabled us to manage the entire end-to-end process alongside our upgrade path, while also smoothing over cash flow.”

Give CAML a call today to see if a Master Lease could help either your suppliers or clients