When West Sussex-based Co-Ordination Catering Hire wanted to add better quality chairs to their rental inventory they turned to asset finance and Medialease
Even in these difficult economic times, the events industry is thriving in the UK and so are many of the companies that supply it. In 2010 it was worth £22 billion to the British economy and estimates are that this will grow 20% by 2015.
Within this sector, the catering equipment hire business, and specifically furniture hire, is very competitive.
Not all catering furniture hire companies are created equal though and nor are the pieces of furniture they hire out. As with many things in the modern world, the Chinese supply vast numbers of tables and chairs to the UK hire market. They’re not always good quality though, with a life expectancy of only two to three years.
“There are certainly lots of Chinese chairs in the graveyard,” asserts Gevin White the managing director of Co-ordination Catering Hire, an events equipment rental firm that supplies furniture for parties, functions and weddings in and around Sussex, Surrey and London.
In all, Co-Ordination Catering owns around 2,500 chairs, and more than 4,000 pieces of furniture for hire. They are all stored in a warehouse near Gatwick airport when they’re not being sat on, eaten off, or otherwise used.
White prefers to buy more expensive, better quality, Hungarian chairs that have a much longer life expectancy, of 10 to 15 years, but that cost twice as much as the cheap-and-cheerful Chinese pretenders.
Mainstream lenders don’t really understand the difference. To them, a chair is a chair. No matter that a cheap Chinese chair has no value on the used market and that it can’t be held on the company’s books long-term as a valuable asset. Which is where Medialease and asset finance comes in.
White was introduced to Medialease’s Simon Ball through a bank connection (a bank that couldn’t get their heads around financing chairs).
Ball immediately understood the specialist nature of the business and was able to explain it and its financial model to a suitable lender. The outcome was nearly £100,000 of funding for banqueting chairs as well as trestle tables, catering equipment trollies – or ‘stillages’, as they’re called in the business – and a corporate chair washer.
White describes the process of raising the money he needed via Medialease as “simple and straightforward,” though he wishes it was even more simple and straightforward, just like his own business.
Ball adds that the project was “challenging, in view of the assets required, but having met the client and looked very closely at the cash-flow generation, and it’s professional approach, the proposal was accepted by two banks who we work very closely with”.
“Usually,” he says, “if a client can demonstrate to us, its ability to repay, we can be flexible in the terms available, despite the current economic climate”.
To find out more about how Medialease can help your events company get in touch.