Helping hand

For bodyshops, financial support is a prerequisite for business success. Academy Leasing director, Hazel Jacques considers some of the funding solutions that can offer the springboard to company growth and expansion.

Bodyshops have not had it easy of late – industry margins remain tight while weak bank lending continues to curb business growth. With mounting overheads forcing many bodyshop owners to keep a tight rein on finances, cash fl ow is being stretched, restricting business ambitions. Invariably, this is compounded by lengthy payment delays.

Despite the closefisted stance of many high street lenders, expansion plans need not be put on hold. Although an upfront capital outlay may not be a viable option for many, appropriate finance can usually be secured. This means hard-earned money can be retained in the company cash flow.


Leasing, rather than buying, required assets may often prove the most affordable option, spreading equipment costs over a three or five-year period through regular monthly payments. A cash flow analysis will highlight potential returns on investment. An advanced modern spraybooth, for example, can dramatically increase profitability by reducing repair times and energy costs.

This approach can help to free up cash to invest elsewhere, and the value of this cannot be underestimated. Furthermore, making timely, regular, payments can also help to build a strong credit history for the business.

Bodyshop owners should be mindful of possible future business requirements and opportunities once a decision to invest in a business start-up or company expansion has been made. The nature of the repairs being undertaken along with the required capacity and equipment to service projected customer demand should be a key consideration.

Equipment suppliers and funders with experience of the industry will usually be well placed to off er advice in this area. Remember to do your homework and take time to select both carefully.

Finance providers that have expertise in the sector and that have a direct lending facility are more likely to fund key business assets. The difficulty in removing fabricated, ducted spraybooths from business premises, for example, can cause some underwriters to question their residual value but, those that have funding flexibility and that understand their business worth, will look more favourably upon providing finance.


A bodyshop’s hard assets, such as compressors or lifts, will have a clear value that can be exploited to release working capital. If you have a prudent business plan and debt can be satisfactorily serviced, an asset finance specialist will lend money against existing equipment without the need for further securities. This kind of arrangement can even apply to equipment still subject to existing finance terms. In such cases, the lender will look to spread payments over a longer term, reducing monthly outgoings and providing more financial flexibility.


Business liquidity is vital in protecting day-to-day business operations and for some owners, a sizeable pool of working capital may be required to support growth.

As a bodyshop, for example, you might be experiencing late payments from insurance companies or arrears payments from a particular customer that provides a large proportion of your business. Staff wages, suppliers and other overheads, however, must still be paid.

Gaps in cash flow can be plugged by receiving an advance on future revenues through factoring or invoice discounting.

Factoring involves an invoice financier managing the company’s sales ledger and taking charge of collecting money from customers. A proportion of the invoice total will be advanced up front, with the remainder paid on settlement.

Financiers will not collect any debts where invoice discounting services are employed but will instead lend money against unpaid invoices. In both cases, the financier will charge a fee for the service but will not require the personal guarantees demanded by banks.

Every business is different and a ‘one size fits all’ approach to growth funding support is rarely appropriate. The road to business success ultimately calls for well-structured financial services that are tailored to your requirements, minimising risk and maximising returns. While your bank may be in a position to unlock your business’s true potential, credible alternative options are available – you just need to know where to look.

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