Plant Hire Finance

Buy, replace or release capital from the hire fleet?

Tell the provider the equipment will be hired to others. Do not assume an ordinary asset agreement permits that use. Separate owned machines from cross-hired equipment and assets owned by directors or another group company.

Utilisation pays the instalments; fleet value does not

A fleet schedule should show what is on hire, idle, being repaired or awaiting disposal. Compare achieved hire income with maintenance, transport, insurance, inspection and finance costs. Forecast quieter months and the effect of a large customer returning equipment early.

Illustrative monthly test: a machine earns an assumed £3,000 hire income, with £700 delivery/maintenance/insurance costs and £1,200 finance payments. That leaves £1,100 before overheads and tax. If income falls to £1,500 while those assumed costs stay the same, the month is £400 short before overheads. These are hypothetical amounts; real costs will vary.

That test can help compare buying with continued cross-hire when demand is uncertain. A longer finance term can lower payments while extending the commitment; compare total cost, final payments and end-of-term obligations.

Refinance: calculate the amount left after settlement

Provide purchase evidence, serial numbers, age, hours, condition, inspection/service records and location. The provider needs acceptable ownership and value. Equipment already financed needs settlement and release arrangements, and a wider company charge may need consent.

Separate illustration: if a provider proposed a £70,000 gross advance and £45,000 settled existing debt, only £25,000 would remain before fees and other deductions. The £70,000 is an assumed advance, not a valuation-based promise. A machine valued at £70,000 would not necessarily support that advance.

Asset refinance introduces or replaces secured borrowing. The equipment can be at risk if payments are not met. It cannot be justified solely because the fleet has value if hire cash flow cannot carry the debt.

Hire invoices: distinguish earned charges from forecasts

A future hire booking or signed minimum hire period is not automatically an eligible invoice. Explain billing in advance or arrears, delivery/collection records, termination rights, damage charges, downtime credits and disputes. Pure hire and operated plant under a construction subcontract can have different payment evidence.

Where commercial hire debts are suitable for invoice funding, compare accepted balances and usable cash after debtor limits, reserves, drawings and fees. Do not include unapproved damage claims as certain receipts. Cash retail hires create a different debtor profile.

Review all facilities together so fleet refinance does not conflict with existing asset or invoice security. Ask about guarantees, valuations, minimum fees, audits and exit costs, and retain cash for servicing and seasonal downtime.

Prepare a useful funding review

• Owned and cross-hired fleet schedules, serial numbers, hours and condition
• Purchase quotation or current settlements, ownership evidence and security
• Achieved hire rates, utilisation, downtime and seasonal forecast
• Hire contracts, aged debtor ledger, credits/disputes, accounts and existing facilities

For the first enquiry, give your company, trading history, approximate turnover, amount, purpose, timing and current facilities. Best estimates are fine; say “Not sure” where needed. You do not need every document to begin. Use business-level totals and agree a secure process before sending detailed confidential records.

NBS reviews the requirement and clarifies gaps before assessing possible routes through lenders and specialist partners. The provider decides eligibility and any offer. Read the existing enquiry’s privacy notice and sharing authorisation before submission.

Plant Hire Finance: practical questions

Relevant guidance and sources

• Plant purchases
• Refinancing owned plant
• Groundworks operating cash flow