Partner finance & Next Gear

[Arthur thicken 13]

Good Morning all, hope you are all safe and well. We've been closed for 6 weeks now so no income. We have stocking 

with BCA partner finance and next gear capital. If like me you have stocking facilities with them, are you finding them helpful or difficult?

One of them said if I didn't agree to a payment time line they would be picking up keys and log books. I though this harsh to say the least in the times we are in. 

Good luck all. Best Regards. Arthur..

[justina3 518]

Think it was only to be expected, they played there cards very close to there chest and waited for the government to give out loans like they where smarties.

[CCC 31]

They really said it like that? Though if you don’t engage with them I can see they’d get twitchy. 

How many dealers will replace stocking loans with bounce back loans?

[Arthur thicken 13]

5 minutes ago, CCC said:

They really said it like that? Though if you don’t engage with them I can see they’d get twitchy. 

How many dealers will replace stocking loans with bounce back loans?

we've got facilities amounting to 1.5 million so a bounce back loan isn't going to be sufficient. I engaged with them from day 1.

All they keep asking is have you had any government money, that's because they want it. 

9 minutes ago, justina3 said:

Think it was only to be expected, they played there cards very close to there chest and waited for the government to give out loans like they where smarties.

Not sure loans we handed out like smarties. I got a CBIL through my bank, it was over £100k I had to provide more info than ever before.

Business plan and cash flow forecast for the rest of 2020 and a full year of the same for 2021. It had to be a work of fiction, who knows whats coming??

[CCC 31]

Did you apply for CBILS?

thinking about it, sensible for them to make it clear that money should be directed towards them, not taken in salaries before declaring bankruptcy.

Having worked for a business where a creditor went spectacularly bust on us resulting in a 180 degree change in credit management, then everyone can expect forensic approach to any monies owing to the banks and finance houses going forward I’d guess.

[BHM 994]

10 minutes ago, CCC said:

Did you apply for CBILS?

thinking about it, sensible for them to make it clear that money should be directed towards them, not taken in salaries before declaring bankruptcy.

Having worked for a business where a creditor went spectacularly bust on us resulting in a 180 degree change in credit management, then everyone can expect forensic approach to any monies owing to the banks and finance houses going forward I’d guess.

Very true - what would you do if you were a creditor? 

Now might be the time for a few to pop their businesses & go bust on their creditors, after bleeding-off any cash first obviously. 
 

24 minutes ago, CCC said:

How many dealers will replace stocking loans with bounce back loans?

Plenty but plenty will also spend it on additional/different stock and plenty more will spend it on catalogue ‘designer’ clothes, belcher chains, thick gold plated bracelets & RRSports/BMWs/white Audis.

[Arthur thicken 13]

1 minute ago, BHM said:

Very true - what would you do if you were a creditor? 

Now might be the time for a few to pop their businesses & go bust on their creditors, after bleeding-off any cash first obviously. 
 

Plenty but plenty will also spend it on additional/different stock and plenty more will spend it on catalogue ‘designer’ clothes, belcher chains, thick gold plated bracelets & RRSports/BMWs/white Audis.

Yes I applied for cbils and got it also got the £25k grant. This all leads on to my next question.. So saying dealers will milk cash and go bust, not so easy.

Receiver comes in and sees you've made yourself a preferential creditor and makes you pay it back or could seize assets if you try and hide it. Next, personal guarantees for stocking facilities a lot of businesses in all sectors will do bust, through no fault of their own, do you think it right or wrong for them to be pursued personally for something which isn't their fault. Equally you could argue it's not the creditors fault either. Will there be court cases with creditors pursuing directors personally, will legislation follow making it more difficult??

[justina3 518]

A very valid point however if you think this through the courts can only ever act on legislation as it stands so personal guarantees will stand, i could never see government changing that statue it would make borrowing almost impossible and the economy would have even less options to recover. 
 

In my earlier post didn’t mean to sound flippant 1.5m is way above my pay grade that would give me sleepless nights that’s for sure. 
 

a lot of dealers would rather not discuss such matters in the open forum maybe you would get more answers if you joined the forum and asked a similar question in the dealers only section. 
 

hope it works out for you however this shit show unravels. 

[Bmx Bandits 52]

I must say I’m surprised that they are taking such a hard line with you at this time. As you say it’s no one’s fault and you are doing the right thing by closing.

What does grate on me that if you had a 1.5m buy to let mortgages you could apply for the 3 month mortgage payment holiday but as car dealer with a similar size loan there is no specific guidance/help.

 

[trade vet 702]

It must be an awfull worry for you Arthur.All the main dealer groups and car supermarkets have huge stock facilites,I doubt it will be the same for them.I would have thought you should be able to renegotiate the terms because the government has prevented you from trading .I would be getting a commercial lawyer to look at the T@C’s ,other than that I know very little about stocking loans..

[justina3 518]

46 minutes ago, trade vet said:

It must be an awfull worry for you Arthur.All the main dealer groups and car supermarkets have huge stock facilites,I doubt it will be the same for them.I would have thought you should be able to renegotiate the terms because the government has prevented you from trading .I would be getting a commercial lawyer to look at the T@C’s ,other than that I know very little about stocking loans..

The costs in that would be mind blowing, you would need a court order to set aside any pending action which alone would be straight into tens of thousands. Being morally correct doesnt always = a win against deep pockets. 

[CCC 31]

There is a saying that if you owe the bank a bit of money you’ve got a problem. If you owe them a lot of money they’ve got a problem.

in the financial crisis a friend had two mates, 1 owed £1m, the other £20mn.

The one who owed £1m got a letter calling in the loan/overdraft. The one who owed £20m got a phone call asking him to come in so they could discuss it.

Edited May 9, 2020 by CCC

[trade vet 702]

2 hours ago, justina3 said:

The costs in that would be mind blowing, you would need a court order to set aside any pending action which alone would be straight into tens of thousands. Being morally correct doesnt always = a win against deep pockets. 

I was only suggesting having the contract legalise checked incase it was flawed in some way.It happens.

[poor-trader 15]

I've only dealt with NextGear and nothing like that amount of money. However, they've been brilliant thus far. No margin payments, cars automatically extended for 60 days when they become due, no audit fees, just the interest which they even offered to defer (I didn't). No idea on BCA but I've heard less positive things about them. My rep's view is that if they put everyone out of business then they'll have zero customer base afterwards so it is self defeating. Furthermore they'll have loads of cars to dispose of they don't want.

To be honest I'm small fry and probably not their top priority and if I really had to could probably clear it but nonetheless they've been much better than I expected.

[Rory RSC 596]

3 hours ago, poor-trader said:

I've only dealt with NextGear and nothing like that amount of money. However, they've been brilliant thus far. No margin payments, cars automatically extended for 60 days when they become due, no audit fees, just the interest which they even offered to defer (I didn't). No idea on BCA but I've heard less positive things about them. My rep's view is that if they put everyone out of business then they'll have zero customer base afterwards so it is self defeating. Furthermore they'll have loads of cars to dispose of they don't want.

To be honest I'm small fry and probably not their top priority and if I really had to could probably clear it but nonetheless they've been much better than I expected.

Plus1 

[Arthur thicken 13]

13 hours ago, poor-trader said:

I've only dealt with NextGear and nothing like that amount of money. However, they've been brilliant thus far. No margin payments, cars automatically extended for 60 days when they become due, no audit fees, just the interest which they even offered to defer (I didn't). No idea on BCA but I've heard less positive things about them. My rep's view is that if they put everyone out of business then they'll have zero customer base afterwards so it is self defeating. Furthermore they'll have loads of cars to dispose of they don't want.

To be honest I'm small fry and probably not their top priority and if I really had to could probably clear it but nonetheless they've been much better than I expected.

that's good to hear.

[justina3 518]

The cynic in me cant help thinking what a neat set up this is, sell a car grade 3 to a dealer the dealer then puts it on plan spends there own money to turn the car into grade 2-1, all of a sudden you cant pay and bca turn up collect the car put it through the ring as a grade 1-2 for clearly more money charge the dealer for the default and collection re-action fee admin costs ect invoke the personal guarantee if the dealer cant pay.

I have seen far more riskier investments.  

[Bmx Bandits 52]

59 minutes ago, justina3 said:

The cynic in me cant help thinking what a neat set up this is, sell a car grade 3 to a dealer the dealer then puts it on plan spends there own money to turn the car into grade 2-1, all of a sudden you cant pay and bca turn up collect the car put it through the ring as a grade 1-2 for clearly more money charge the dealer for the default and collection re-action fee admin costs ect invoke the personal guarantee if the dealer cant pay.

I have seen far more riskier investments.  

Not only that but even if the dealer does manage to keep up stocking loan payments and sells the car, they still come back to you to buy another one with the auctions/stocking fees and so the cycle continues. It really is ingenious 

[sparky 274]

I'm presuming next gear and bca didn't put a gun to the head of dealers when they were considering signing up? You live by the sword....

[justina3 518]

13 minutes ago, sparky said:

I'm presuming next gear and bca didn't put a gun to the head of dealers when they were considering signing up? You live by the sword....

Indeed very valid point, same as any borrowing for me it should be used short to medium term with a plan to wean yourself of it and build your own fund. 

[Ratt101 15]

Saw a post above about getting a £25k grant we only got £10k where did the extra come from? cos would love to apply, however we did get approved for a bounce back loan within 48 hours we have no current funding 

 

[justina3 518]

1 hour ago, Ratt101 said:

Saw a post above about getting a £25k grant we only got £10k where did the extra come from? cos would love to apply, however we did get approved for a bounce back loan within 48 hours we have no current funding 

 

Really ? still shocked me how little people know about what funding has been offered by various councils and the government. 

All the info you need is out there ten fold, it takes less than a few hours to get your head around it all and come up a formula that works for your business,

[poor-trader 15]

Depends on the  RV of the premises. Under £15000 you get £10k, over (but below £51,000 in many cases) you get £25,000

[poor-trader 15]

4 hours ago, sparky said:

I'm presuming next gear and bca didn't put a gun to the head of dealers when they were considering signing up? You live by the sword....

It is a fair comment but you could extend that to the landlord didn't put a gun to the head of a tenant who signed up for an expensive site, the bank didn't when  signing for an overdraft, the employees didn't when you have them a job, the Council didn't when you committed to £5k rates a month etc.

Like anything else it is a fixed overhead and it's fine when money is coming in. However, when £0 is coming in and it is not possible to liquidate assets, a due rent payment, due salaries or a big bunch of bank charges, a stocking loan payoff is just another thing to pay which runs down the liquidity.

[Arthur thicken 13]

4 hours ago, sparky said:

I'm presuming next gear and bca didn't put a gun to the head of dealers when they were considering signing up? You live by the sword....

No they didn’t but the issue is how they respond to dealers who have no income during lockdown. In normal times it worked.

3 hours ago, Ratt101 said:

Saw a post above about getting a £25k grant we only got £10k where did the extra come from? cos would love to apply, however we did get approved for a bounce back loan within 48 hours we have no current funding 

 

The grant was based on rateable value you your premesis