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Driving Growth With Fast Funding Package
When coach operator Holmeswood Coaches needed funding for a new purchase, Santander's willingness to engage with the business impressed the company's directors
- Turnover: £20 million
- Sector: Transport
- Holmeswood Coaches is a medium sized coach operator covering the North-West of England. It has been providing coach hire and transport services for over 60 years.
- When the business saw the opportunity to expand the business, potentially adding more than £1 million to sales, Santander provided the funding. The new funding complements an existing package of facilities, incorporating asset finance, a revolving term loan, invoice finance and trade finance.
- Holmeswood was able to open a new operating centre, boosting the business and protecting jobs.
- Finance Director Colin Aspinall is sceptical about banking partners and has experienced many during his tenure at Holmeswood. He says Santander’s willingness to lend speed of response and its effort in getting to know its clients sets it apart from the rest.
Finance Director Colin Aspinall is part of the third generation to run coach operator Holmeswood Coaches, his family business. His grandfather had several commercial interests before buying a coach in 1947 and focusing on transport as his primary business.
Thanks in part to an aggressive expansion drive during the 1990s, today the business turns over more than £20 million and operates a fleet of 120 vehicles from six depots across the North-West of England. It has also diversified, incorporating coach sales as well as touring services.
The scope of the business
“We have a portfolio of work; anything from school contracts through to European touring with very nice, posh buses,” explains Colin. “We do a whole spread of things such as taking kids to Alton Towers or transporting people going on cruise holidays. There’s also a large fleet of wheelchair-accessible vehicles, for those with limited mobility who want to go on a holiday or, as happened recently with the Para-Olympics, teams of wheelchair athletes going to sporting events.
“The Holmeswood side has sales of about £11 million and that nearly doubles with what our coach sales operation, Base Coach Sales, brings in to the business. Since a new coach can cost anything up to a third of a million pounds, you don’t have to do a lot of selling to turn over a lot of money.”
Asset finance is important to the business, with facilities of about £10 million in use, with Santander being one of the most significant finance partners. Santander also deals with the business’ invoice finance facility, worth £1.25 million, and is in talks with Holmeswood about taking over day-to-day banking too.
Financing a new purchase
At the end of 2012, the Holmeswood management team saw an opportunity to expand the business with a new depot which could add more than £1 million of additional sales to the business’ annual turnover.
In the post-credit crunch environment, there were no guarantees that finance would be available for the purchase, particularly not at short notice.
Ian Bateson, Holmeswood’s Relationship Director at Santander, was alerted to the purchase on Christmas Eve. Despite it being the festive season, with most businesses outside of retail taking a break, Ian was keen to work on the deal instead of putting it off until the New Year and potentially allowing it to slip. He admits this meant meeting the team and swapping phone calls at all hours.
Beyond nine to five
“It’s a nice feeling when you’re in the middle of a purchase, being able to phone someone like Ian Bateson and bouncing a few ideas off him; you get a fair opinion,” says Colin. “We sat down with him between Christmas and New Year, started talking about the purchase and the conversation gave us sufficient assurance of the bank’s appetite to see it through." Santander did see it through, replacing the business’ existing £200,000 loan facility with a beefed-up £350,000 loan, enabling the deal to be completed.
Colin continues, “When we cracked on and got the deal done we knew Santander would support us. Santander Relationship Directors encourage customers to rely on the bank – it’s a good feeling and unusual in the modern world.”
The secret of their success
For his part, Ian says he is impressed with the Holmeswood team’s ability to mix a laid-back “fun and quirky” approach to business with a razor-sharp acumen for delivering growth, while keeping well on top of the business’ financial reporting requirements.
“The management information comes through regular as clockwork and they are always available to talk through the business plan,” he says. “They’re a completely open book and it’s because of this that they’ve become a major regional operator for the North-West.”
Ian estimates that Santander’s financing of Holmeswood has provided a platform to grow the business by around 15 per cent, not to mention protecting the jobs of workers at the newly acquired depot. He adds that Santander will stand behind Holmeswood’s growth plans and consider any request for new finance.
For Colin, this is a considerable bonus: “When I was younger we expanded the business quite aggressively and credit was something you didn’t have to worry about. In today's environment, Santander stands out from the crowd. If they feel they have found the right people with the right plan, then they will offer their support.”
All lending is subject to status.