A host of finance products – including asset finance and invoice
discounting – have been employed in a large-scale UK coach deal
that ultimately was largely structured by a single broker.
The deal involved the provision of financing to two directors of
Countryliner Coaches Ltd for their acquisition of an East
Sussex-based company that provides coach travel and coach
maintenance.
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The transaction was made more complex because the finance was
paid to the customers simultaneously. This required the
establishment of a special purpose company, which invoiced the
finance providers.
All the finance packages were brokered and structured by Phil
Betts, a director of Merchant House Finance. He said that although
he had done similar deals in the past, “this deal required a
reasonable level of upfront cash on the deal as directors were not
willing to put their cash into the package”. He added that it was
unusual to see so many different types of financings in one
deal.
The asset finance, provided by State Securities, was comprised
of a 60-month lease on hire purchase of coaches belonging to the
target company, and a garage workshop.
Working capital was also provided by State in the form of a
Small Firms Loan Guarantee (SFLG), in which 75 per cent is
guaranteed by the government. State provides a SFLG only if the
customer takes up any of its other finance products.
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By GlobalDataInvoice discounting, which covers the target company’s existing
debt, worth , was provided by Close Invoice Discounting. At the
time of going to press a commercial mortgage was in the process of
being provided by the Cambridge office of Lloyds’ corporate and
institutional banking department.
