How asset finance enabled me to secure the equipment for my start-up

Jo Dalton started her business with a £5,000 grant from the Prince's Trust but secured her equipment on hire purchase

Jo Dalton drew up her business plan for a doner kebab takeaway on the Isle of Wight. She received £5,000 in funding from the Princes Trust to set up the business but her plans had to be revisited when she discovered that the money was not going to be enough to buy all the equipment she needed. Instead, she looked for a finance deal for her shop Ma-Doner and is buying all the equipment on hire purchase.

Dalton set her sights on running her own doner kebab takeaway in Ventnor on the Isle of Wight. Although she had been in the catering industry, she did her research very carefully because a kebab restaurant is very different from other restaurants. Dalton priced up all the equipment that she would need, including a fridge and cooker as well as more expensive items such as a chargrill, chiller cabinet and kebab burner. She knew that she would also have to install a carbon filter extraction fan. Armed with all of the information she went to the Trust and was awarded a £3,500 loan and a bursary of £1,500.

Dalton was banking on being able to buy reconditioned equipment to set up. The business plan had budgeted for equipment. But when it came to purchasing, Dalton found that she did not have as much cash to spend as she had thought. She also discovered that it was nearly as expensive to buy reconditioned equipment as buying new equipment. On top of this, Dalton would have to travel to the mainland and arrange for the equipment to be brought back to the Island.

Instead she set about finding a finance deal to help her pay for new equipment. Her first two attempts failed, but Dalton persevered and found a local firm that sold catering equipment. They found a leasing deal to suit her Ma-Doner is now paying for the equipment monthly.

“If I had had to pay upfront [for the equipment] I probably wouldn’t be here today,” she said, noting that the costs of buying new equipment would have been prohibitive.

In fact, buying the equipment on hire purchase has worked rather well for Ma-Doner. Dalton has managed to buy new equipment with guarantees at only a slight premium to the reconditioned equipment that she had budgeted for. “I have got peace of mind knowing that it is new and won’t break down,” she said. “The reconditioned equipment works but there is no guarantee as to how long it will last.”

If I had had to pay upfront I probably wouldn’t be here today

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