JCB offers financing 'lifeline' to plant firms

JCB has unveiled a new finance package to help customers beat the credit crisis. The firm last week axed a further 680 jobs, blaming big falls in production on the problems plant owners are having in obtaining credit to buy machines.

The new JCB Finance options range from extending existing finance agreements, to releasing equity in plant fleets.

Nigel Greenaway of JCB Finance said: "It makes no sense for plant owners to struggle for lack of cashflow when they have equipment worth thousands or millions of pounds."

While each deal is individual, Greenaway gave the example of a customer who bought a £50,000 excavator two years ago on a three-year hire purchase agreement. "If they extend the finance by a further year, the repayments will almost be halved.

"That customer has already paid off about £38,000 and has substantial equity in the machine, some of which can be released to bolster cashflow into the business. By using a sales and lease-back arrangement, the customer could also add £10,000 to the agreement, which will still see lower repayments while releasing much-needed cash for the business," he said.

For many owners, Greenaway said the best alternative is to talk to both their local JCB dealer and JCB Finance to structure a deal where, for example, eight machines can be traded in against four new ones. This will not only roughly halve monthly outgoings, it will also reduce the fleet to suit current demand and can be combined with a cash release.

While some finance providers have withdrawn from the market, Greenaway said: "At JCB Finance, 70% of our business is with the construction industry and we prefer to help customers trade out of a difficult position so they are around in the future to buy JCB equipment."