LEASING AND FINANCE - BY SAMUEL McKEOWN
Close Brothers Construction & Recycling specialise in providing seasonal payments to match a customer’s requirements during busy and quiet periods of the year
Andy’s on the money with his custom built fi nance deals
STARTING with the bare minimum and then creating something out of nothing is second nature to Andy Sagar, Managing Director of the Construction & Recycling division at Close Brothers Asset Finance.
These days Close Brothers are the well-known FTSE 250 company and have been a UK merchant banking group since 1878, providing lending, deposit taking, wealth management services, and security trading.
Andy served a lengthy apprenticeship on his way to becoming a key fi nancial service fi gure in the waste and recycling sectors.
After leaving school at 16, he started out as a pool attendant, before joining Akerman Excavators as a service engineer through an apprenticeship scheme. He then joined Akerman’s used sales/ wear parts division, gained a BTEC National qualifi cation in Business & Finance, and specialised in fi nance.
Andy, 50, said: “I was involved in fi nancing construction equipment because there was additional income to be made as an introducer of machine sales to fi nance companies.
“Through this, I came across North West Securities (NWS), which was part of the Bank of Scotland.
“I left Akerman, which was taken over by Volvo at that time, to work for NWS - where I stayed for 12 years, eventually moving to Case New Holland Credit (CNH) to work in captured accounts.”
At CNH, Andy got his fi rst taste of business development under Capital 4 Finance, which involved non-CNH business and creating a separate revenue stream.
“There I was approached by Close Brothers to help with a large recycling business failure,” Andy continued. “I remember the Chairman said to me ‘You know the industry, can you help us?” Close Brothers poached Andy because of his expertise in fi nancing waste recycling equipment & construction equipment during his time at NWS, working with Extec (now Sandvik), Blue Machinery through Powerscreen; and also set up equipment fi nance for Hyundai and others.
Andy’s next step at was to build a construction and recycling division. This launched in December 2002 with nothing more than a fax machine and an old laptop, and has grown to £108 million and a team of 15 area sales managers.
With any role, learning from mistakes is paramount, as is an understanding of equipment which can quickly become obsolete.
46 SHM March, 2018
He added: “It’s about identifying sales trends and the price of equipment, both UK and abroad. Waste recycling equipment is constantly being upgraded and technology evolving.
“For example, it is likely equipment fi nanced fi ve years ago will provide a depreciation profi le, down to 20% of its original value. With shredders, the costs for maintenance can reach up to £2,000 a week.
“If a company doesn’t have enough cash fl ow for maintenance and business interruption, then it’s an issue for all involved.
“We’re careful where money is lent by making sure customers can pay back loans over a fi ve-to-six-year period. We’re there to advise and put solutions in place to suit a company’s cash fl ow.
“It’s important to tailor machine fi nance to a customer’s requirement. We are also extremely diligent due to the risk of fraud, which is unfortunately evident in all sectors of business.”
Andy highlights transparency, trust and rapport with the client as essential, ensuring second and third deals and a long-term relationship.
£16million deal put together within fi ve days
Andy said: “I have a £500,000 credit mandate sign-off so we can carefully underwrite, but off er a credit decision very quickly.
“As one example, one colleague from Close Brothers’ Engineering division gained credit approval for a £16million deal put together within fi ve days.”
It’s not just eight fi gure loans that the company specialises in however, as the fi nance expert points out.
He adds: “Our division’s average advance is £100,000, which we can get approved and done in a couple of days – on the high street, it would take much longer with often several layers of underwriting levels.
“Our business model is about knowing the customer, their business and pressures, this is underlined through our whole business, including our collection’s department.”
Being head of a Close Brothers division for over 15 years has not been without its challenges - especially those experienced during the 2008 fi nancial crash.
The company became involved with WRAP (Waste & Resources Action Programme), working with the government to off er
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