Capital Equipment News August 2018

business demands become timely, such as when contractors must fulfil an unexpectedly large contract which requires more equipment to execute. ReichmansCapital offers a viable additional source of funding to that provided by traditional commercial banks, which enables businesses to maximise such growth opportunities and grow their assets. For instance, when a junior miner or subcontractor has just been awarded new work which calls for new equipment, the key criteria for most traditional banks is to look at the operating history, gross margins and cash flows. This is a rigid approach which often results in contractors being denied credit to finance the assets they need. “We have a completely different approach. We sit down with the contractor and unpack their contract, evaluate the equipment they need and what it is going to do for their

business. While some traditional banks look at the company’s current financial position, our credit process takes into account, sustainable contracts, allowing us to support companies to execute available projects,” he says. Kessel says the business climate is always characterised by both good and tough cycles, and it is in tough cycles where long-term relationships are crucial. ReichmansCapital prides itself in its people approach to relationships, and as a finance partner to its customers, the company always rides the tough cycles together with its clientele. For example, Kessel highlights one instance when a contractor working in the Mpumalanga mining area could not work for four months due to non-stop rains. “Through our flexible repayment structure, we could afford to adjust their instalments to allow them to ride the storm,” he says. Reiterating the importance of flexibility,

Kessel adds that often companies exposed to mining and construction sectors have a longer December downtime, while it is also time to pay out bonuses. To accommodate these scenarios, the company recently started doing half or skip repayments to ease cash flows for its customers during the festive period. “We have always looked at possible solutions to help customers in times of need,” says Kessel. Large portfolio Since venturing into capital equipment financing, ReichmansCapital has established a large portfolio across yellow metal assets, materials handling equipment (forklifts and cranes), as well as the transport sector. “We are predominantly active in three key sectors, namely, mining and construction, plant hire and the transport industry,” says Kessel. A large portion of ReichmansCapital’s portfolio constitutes yellow metal assets. The rest is spread across all other industries. “The yellow metal industry is the ‘sweet spot’ of our asset financing business. In this sector, we have assets ranging from the TLB to large mining machines,” concludes Kessel. b

“We are predominantly active in three key sectors, namely, mining and construction, plant hire, and the transport industry.”

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