08 Oct 2018
Providing an integrated finance solution to release cash
The Bunker Secure Hosting Limited might operate in two of the most secure locations in the UK but this did not shield them from needing an innovative funding approach suited to their specific needs…
The Bunker Secure Hosting Ltd is a secure datacentre provision company that operates from former facilities from the Ministry of Defence and US Airforce in Kent & Berkshire. Unsurprisingly, these are two of the most secure facilities of their kind in the UK having been built to withstand a nuclear attack. Today, these facilities have been repurposed to oﬀer companies the highest possible level of protection for their technology equipment.
The business was seeking a financing solution for a mixture of technology and datacentre assets purchased in the previous eight months to enable the releasing of cash back into the business for investment in other, more strategic projects.
The key challenge was that while the Chief Financial Officer views financing of assets as an efficient and sensible model, the assets had already been acquired from the capital expenditure budget and not all of the purchases were technology hardware - there were services, software and non-technology assets bundled in.
It was quickly understood that a lease solution was required. The Bunker could see the value in leasing the hardware as it depreciates rapidly and they need to keep pace with technological developments to the benefit of their clients, who often insist on cutting edge technology. Two solutions were presented by the Close Brothers Technology Services team:
- A sale and leaseback deal that would see the hardware assets sold to Close Brothers Technology Services for their original purchase value and then leased back to The Bunker over a three-year term. This included the software and elements of the services, resulting in a simplified lease facility for the assets, tangible or not.
- Financing the company’s ongoing technology purchases utilising Close Brothers Technology Service’s Invoice Management Facility allowing The Bunker to consolidate multiple purchases onto a single, quarterly lease schedule.
For ongoing purchases, Close Brothers Technology Services will manage the supplier payments on behalf of The Bunker, reducing the administration and providing efficient financing of core, business-critical assets at the same time.
- The company will use the cash freed up from the sale and leaseback agreement to invest in key projects, including upgrades to its Kent facility.
- The Bunker now sees the financing of depreciating technology assets using a lease facility as both an efficient and smart funding strategy.
- To ensure that new technology purchases are funded at the point of purchase, a facility has been put in place that will reduce the administration for The Bunker, with Close Brothers Technology Services managing the supplier payments and consolidating them into quarterly lease schedules.
“The team at Close Brothers Technology Services provided a fast, focused and responsive service. Particularly refreshing was the lack of any sales pressure - they were as committed to getting the deal done as we were, and dealt professionally with any obstacles we faced. They were a pleasure to deal with and I’d happily recommend them to anyone looking for lease finance.’’ Adrian Howe, Chief Financial Officer, The Bunker Secure Hosting Ltd, part of The Cyberfort Group.