When a leading classic cars business found its profit margins squeezed by rising interest rates, it turned to Productivity Finance for a solution.

About Bill Rawles Classic Cars

Classic car outside Bill Rawles Classic Cars

Bill Rawles Classic Cars is a leading classic cars business based in Bishops Sutton, Hampshire and specialises in some of the world’s best known and loved vintage cars – Austin Healey Sprites, MG Midgets, E-type Jaguars, VW Golf Mk 1's, and many more.

The Rawles family has been known and respected within the industry for over 35 years and are amongst the market leaders in maintenance, service, sales, motorsport, upgrades and restoration. Everything is carried out in-house by mechanics who are experts in their field.

Their site accommodates state of the art workshops for restoration, fabrication, paint and metal work, as well as a space showcasing their collection of classic cars for sale.

To add to the bread and butter of the business, they have all the facilities in-house to run and support Austin Healey 3000 racing. From a workshop with all the equipment, to a race transporter, which is their moving workshop, parts store and trackside office.

This is a real family business with Bill, his wife, and now their sons fully immersed in the running of the company – succession planning at its best.

The Need

The businesses wanted to refinance the commercial mortgage on its freehold premises to reduce the finance costs.

The existing loan was on a variable rate and, with interest rates rising, the cost was starting to have a big impact on profit margins. This was becoming an increasing concern to the directors.

The directors wanted peace of mind that their commercial mortgage would be affordable in the coming years as they had plans to grow, invest and develop the trading site further. There were plans for additional workshop space as well as a café/shop area for visitors. This would ultimately drive increased turnover and profits.

What We Did

The motor trade is not every lenders' cup of tea, despite Bill Rawles Classic Cars being high-end servicing and not just sales.

We explored and spoke to over a dozen lenders in our quest for the best commercial mortgage. We wanted a lender that could respond with a competitive rate and terms, that we could trust to execute the transaction easily and deliver without any fear of them pulling the plug halfway through, and one that would understand the customer's growth plans.

We pride ourselves on immersing ourselves in a deal from start to finish, maintaining regular contact with the customer, the lender and any other professionals involved in the process. As an experienced broker, we were able to negotiate with the lenders on the family's behalf and challenge back on some of the conditions that were being posed. We handheld the deal right through to completion, often speaking with our contact at the bank outside of office hours and having direct access to the underwriter.

Finding the right loan for a business is hard enough for any untrained individual, most business owners just don’t have the time, expertise and energy to deal with securing finance, never mind understanding the credit appetite and underwriting that goes on behind the scenes. The legal process was somewhat cumbersome in this instance, but we engaged with the solicitors to smooth out the wrinkles along the way.

The Experience

Our customer now has an affordable fixed-rate commercial mortgage with fair and flexible terms. We chose an Alternative Funder, one that specialises in supporting high growth businesses and that can provide a long-term relationship and further funding when needed.

The lender has taken a good liking to our customer and has visited the site to meet with the family and be shown around. Yes, of course, this is part of the credit policy, but it also shows that we have a lender that is genuinely interested in who it lends money to and can buy into expansion plans.

Whilst underwriting the deal for the refinance, credit appetite and agreement-in-principle was obtained for further borrowing. This should be a quick and easy transaction when it's needed if the business maintains its strong performance.

Bill said:

"I found Tamara Renshaw via a recommendation and, from the first conversation, I knew I was in safe hands. She was an excellent asset to have in our corner. Tamara took the time to understand our business, our plans for improvement and growth, and personalised the funding options she found to suit our requirements. Her pragmatic approach to any issues that arose meant we always found a way to keep moving forward towards completion.

"The re-mortgage is a vital move for our business as, with the continuing interest rate rises, I think we would be in a sticky situation, so it is a great relief we can get back to focusing on what we do best and the mortgage can tick away in the background. I will be back for advice and future funding, so hopefully, we can continue this relationship for many years".

With base rate still on the up and showing no clear sign of peaking, Bill and his fellow directors were previously nervous about investing in the business and putting their development plans in place. Now, with the new mortgage, they can focus on the business and press on with their plans to take the company to the next level. In simple terms this will create new jobs, increase turnover, improve productivity and ultimately generate higher profits.

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