Maria Hadlow talks to Snorkel Finance about how they bring finance and customer together

Flexible and market focused: Maria Hadlow talks to Snorkel Finance about how they bring finance and customer together.

Barry Nicholson director of Snorkel Finance said that the key to putting together a good finance deal is to understand both what the customer and the funder want. - the broker must have the ability to make the two meet.

"Ours is a slightly different approach, he said. "With a variety of funding options and a raft of specialist funders, we can broker a deal to suit deals for large PLCs to a single machine purchase."

Mr Nicholson says that Snorkel Finance has a "great portfolio of funders each with different funding specialities: some specialise in deals upto £100K, some to between £100k and £1 million, some over £1 million. Some specialise in blue chip companies, other in sub-prime lending, some in operating leases and some variable leases."

Mr Nicholoson has had experience in running various programmes with a number of lenders for a variety of different businesses in the past.

"The Snorkel name has status," says Mr Nicholson and Frank Iszard Snokel UK's sales manager is a market expert. The days are gone of smoke and mirrors these days both sides must be open in structuring a deal."

According to Mr Nicholoson banks have no problem with lending on access equipment, the challenge Snorkel finance faces is to add value and create a case as to why the customer needs the machine and how it will structure the deal. "You need experience to do that," says Mr Nicholson.

Snorkel Finance has put together four basic financial deals for their customers, Mr Iszard says that it has taken eight to 10 months to ensure the deals are structured correctly to suit the market but they are by no means exhaustive as they can each be used as a starting point to create a package which suits the customer and the lender.

Very basically the four packages are Access Purchase, Flexible Purchase, Business Builder and Lease to Rent.

Access Purchase is a variable rate HP (hire purchase) agreement with a deposit which allows the purchaser to extricate themselves from the deal without huge penalty if need be. It offers less risk, particularly if a customer needs machines specifically to fulfil a contract.

Flexible Purchase also requires a deposit but is a HP agreement with a fixed interest rate. Because few rental companies have a steady, flat cash flow, the deal can be financed to match peaks and troughs, for example they may choose not pay in January or to pay only half in Nov and Dec. Because it is a fixed interest rate payment can be redistributed over the rest of the year.

Business Builder uses the future value of equipment to reduce payments with a balloon payment at the end. It is also a fixed interest rate HP deal for example 48 monthly payments, which go down each year as the rental rates fall, then a lump sum to be paid at the end or the machine sold back to Snorkel.

Lease to rent is a straight forward operating lease: the customer doesn't own the equipment just uses over a given time frame - the machine will go back to Snorkel.

Mr Nicholson says that there are four key questions to ask when establishing what sort of finance will suit a customer: Do you need to own or just to use? How much deposit can you pay? What is your monthly budget? and What is the cash flow of business?

"Then it's easier to fill the gaps," he says. "These days neither the customer nor the lender must be dogmatic - flexibility is more accepted these days by both financial institutions and customers. And there must be transparency. For the best outcome customers must be active and upfront about their situation to develop a close working relationship."

Mr Nicholson believes that financing needs to be discussed very early in the relationship, "Good finance will attract customers and finance should be part of the opening conversation when buying equipment."

Snorkel Finance continues to develop packages to suit the current market conditions and is currently working on a capital release scheme, which will allow a customer to borrow on existing assets to help replace fleet with Snorkel machines.

Currently the Snorkel Finance deals are only available to Snorkel UK customers but Snorkel and Snorkel Finance are in discussion about potentially extending into other regions.