Business funding

[Mudgey]

Hello,

I am working out the pricing for getting some second hand & new metalwork machinery in, more specifically the following:

CNC Turret Press.
CNC Brake Press.
Relevant tooling and software for above.
Welding Station.
Powdercoat Oven.
Powdercoat application station.
Chemical Degreaser dipping station.
Ancillaries for above.

I am thinking 130-150k should be more than enough to cover the above inc installation, ancillaries and anything unforeseen.

My current spend on metalwork and laser cutting is approx. 30k/annum, that's not including a load of new metal products being released later this year.

Another reason for bringing the work in house will allow me greater control over quality and lead times, tbh I am getting extremely fed up with inconsistent quality from our suppliers, it seems more and more places are pushing for speed over quality.

If anybody has been in a similar position, may I ask what options for funding you looked at and what worked for you?

Cheers!

Edited by Mudgey on Tuesday 24th May 16:29

[rog007]

If you have to ask about funding I'd commend you think very carefully about your plan; very few organisations other than those cash-rich would contemplate outright purchase.

Things to consider include:

- Tax implications dependent upon when in the tax year you purchase (are there any changes to tax allowances coming in) and how (leasing or hire purchase for example)
- What are your growth plans and how will these purchases fit with that
- Running costs
- How long you see the pieces being viable before requiring replacement

I'd want to be 100% certain of my 5-year business plan and whether outright purchase fitted with that.

Good luck!

[tumble dryer]

Who's operating your new machinery?

[Mudgey]

I've not had to get funding previously hence why I am asking, I don't see the point in waiting a couple more years to buy the machines outright without a loan.

Thanks for your feedback, this is not a decision I am taking lightly. It is the most logical path forward to allow us to compete with the big companies and move into much higher volume markets.

Myself and my employee will be running the equipment to begin with until the work is too much to handle and then another employee will be sought.

What other avenues are there to consider for funding? Has anybody used funding circle before?

[barryrs]

Have you looked at the Regional Growth Fund - https://www.gov.uk/government/news/regional-growth...

The business i work for received a 20% grant on our recent asset purchases of circa £80k when we took on some apprentices which we were looking to do anyway.

It sounds like an apprentice might be a good option for you and it might well offer you considerable benefits as an employer.

[RanchoGrande]

Mudgey said:

I've not had to get funding previously hence why I am asking, I don't see the point in waiting a couple more years to buy the machines outright without a loan.

Thanks for your feedback, this is not a decision I am taking lightly. It is the most logical path forward to allow us to compete with the big companies and move into much higher volume markets.

Myself and my employee will be running the equipment to begin with until the work is too much to handle and then another employee will be sought.

What other avenues are there to consider for funding? Has anybody used funding circle before?

I used funding circle before, was a really swift way to raise money and saved ridicule which is often dished out by the high street banks. You do have to have 2 years filed accounts though, so bear that in mind.

[Bertrum]

You would need to take outside work as well to make that stack up Financially which is a whole world of Hassle.

At that spend level i am guessing you are placing ad hoc small volume orders on a relatively fast turn around which makes you a pain to deal with hence your issues.

Another solution is to offer a robust commitment to your supply base, that will solve your Lead time issues and get you improved pricing. With some good planning, you should be able to get all your requirements made for 6 months in 1 hit. You would have a marginal amount of risk of being left with stock you can't sell but you will be rewarded with improved profits. Using the assumption if you have the space for the Kit you have space for the stock.

[Mudgey]

Ahah, I didn't even know business grants were available. Will certainly look into this.

Selling products seasonally its not easy to predict the growth, this is what is causing problems. Its all very well to commit to something but it breaks down when you then turn around and ask to double the order.

Luckily in a position where I won't have to take in outside work to make it pay for itself, I wouldn't take out a loan if I had to rely on whatever it is I am buying to pay for itself. What it does allow me to do is cherry pick any outside enquiries we get to run through the machines and not have to rely on anything that comes through the door.