Success of equipment hire company demonstrates effectiveness of flexible loan products for small businesses.
“If you build it, they will come,” runs the famous line from the 1988 classic movie Field of Dreams. For Damian Wyatt, it’s more than just a movie quote – it’s his business mantra.
“If you put in the effort and believe in the success of a project, then it’s more likely to succeed,” says Wyatt, who applied that philosophy to Southbrook Hire, his Rangiora business.
Part of his success is also an example, says Adrienne Begbie, Managing Director of Prospa NZ, of the effectiveness of Prospa’s Business Line of Credit product. It’s a flexible tool to help small-to-medium New Zealand businesses with cash flow, rising costs, and demands on time.
Wyatt, an Australian who moved to New Zealand in 2000 after meeting his Kiwi partner in London, built a successful career in sales and operations management. After finishing his role with the Canterbury rebuild, he decided he wanted to work for himself. In 2015, Wyatt’s wife Pip saw an advert for a 15-year-old equipment rental company.
“Things were a bit tired and shabby but I could see there was a huge opportunity for improvement,” recalls Wyatt who re-branded the business to Southbrook Hire.
The previous owner had started a side business, filling LPG bottles for barbecues and home heating so Wyatt grew that business from 500-600 bottles a year to its current 12,000 a year. The rental arm of the business, which hires everything from diggers to power tools, wasn’t so easy to turn around.
“I tidied up a lot of the old equipment and sold it but I knew that, if I wanted to provide a great service, I needed to buy new gear.”
This is where Wyatt came unstuck: “My bank lent me money to buy the business but the government had just brought in new rules about lending, so even though we had the equity, the bank wouldn’t lend me any more to buy equipment.”
That included the $20,000 he needed to rebuild a cherry picker so it could be certified for hire – so Wyatt’s search for alternative financing led him to Prospa.
“I’d heard about Prospa because my brother had mentioned them. I googled them and was blown away by how simple their lending processes were.”
That included sharing a few details securely and signing the contract online. “It was so quick and easy. The funds were in our account within 12 hours of contacting Prospa. Plus, we did it all from home without having to go anywhere or see anyone.
Wyatt was so impressed that he and his wife subsequently signed up for Prospa’s Business Line of Credit product to ensure they’d have funds ready whenever needed. Again, the approval process was seamless and every 12 months Wyatt can be approved for another year’s credit.
“The beauty of having a line of credit is that, if there’s a sale on hire equipment, especially an offer too good to refuse, I’m able to jump on it. Last week, for example, the STIHL Shop had a one-day sale and I was able to draw down cash to purchase a $2000 water blaster.
“I could never have done that so quickly or easily with a bank. Also, because I’m super busy in the business, I don’t have time to waste going into a bank to see someone for a loan which can take days to be paid out.”
Wyatt has subsequently drawn down on his line of credit to help finance the cost of a $15,000 horse float and to top up the purchase of a $47,000 digger.
“Having access to those funds means I have peace of mind that, when I need to buy something for the business, I can. I only pay interest on the amount I’ve drawn down on.”
“The real beauty, though, is that whenever I’ve got an extra $300 or so I can repay that without penalties, which helps lower my interest payments.”
Begbie says Southbrook Hire is one of many Kiwi businesses the company has helped since they crossed the ditch from Australia.
A recent survey commissioned by Prospa showed the top reasons SMEs were using funding was to buy equipment (42 per cent), maintain cashflow (41 per cent) and expand their business (32 per cent). Begbie says Prospa is all about helping customers such as Wyatt manage their cash flow and grow their business in the way that suits their needs.
“Thanks to the ease and speed of our application process we can get cash into people’s bank accounts quickly and by providing flexible repayment methods business owners feel more in control and can focus on their longer-term business plans,” she says.
Southbrook Hire is just one example of the increased demand for a Line of Credit product – and it’s certainly worked for Wyatt whose philosophy of ‘build it and they will come’ has paid off: “When I started, on a really, really good day we’d do around $2000. Now we’ve more than doubled our turnover and on a good day will do around $5000. I’ve been able to employ six staff and now we carry around 300-400 items for hire. Business is booming.”
Need funds for your small business? Ask Prospa about a funding solution today.
*Eligibility and approval are subject to standard credit assessment and not all amounts, term lengths or rates will be available to all applicants. Fees, terms and conditions apply.
