Convenience stores are run on small profit margins and energy is the second biggest operating expense behind labour costs and on average, every £1 saved on utility bills is the same as increasing sales by £67.
The group had settled on its solution but considered its own cash should be preserved for revenue generating projects and turned to Asset Facilities Ltd to provide an off balance sheet leasing solution that included all ‘soft’ costs such as installation, project management and design.
Given such a sizeable investment, over £5 million, the company wanted to be sure it enjoyed the financial savings the supplier had estimated and asked us to include a performance guarantee that would underwrite those projected savings and make up any financial shortfall should the equipment not perform as expected.
By removing the risk of failure, the client was free to move ahead with the project safe in the knowledge that those projected financial savings would indeed be delivered to its bottom line.
By using our finance and guarantee product, there was no financial liability to account for as either the energy savings or the insurance policy would cover the finance costs so the entire transaction could be treated as off balance sheet.