Close Brothers Technology Services: intelligent financing over asset lifecycles
Close Brothers Technology Services helps large SMEs and mid-corporate companies to buy, finance and manage their IT – from the beginning to end of asset life.
Companies can save cost and maximise the value of their IT investments by taking a total lifecycle approach to funding and managing assets, says Close Brothers Technology Services. Adding services like data security further increases the advantages of asset financing.
Close Brothers Technology Services’ lifecycle approach provides options that start with acquisition and end with disposal, for asset types ranging from hardware servers to smartphones, as well as software and maintenance services.
“We look at what drives a client’s business, how technology fits their plans, and see how we can help them use it to run their businesses better,” said Ian McVicar, chief executive officer at Close Brothers Technology Services, who set up the company with finance director John Drake. They each have over 30 years’ experience in the technology and financial services sectors.
McVicar and Drake identified UK merchant banking group Close Brothers as a good potential fit to support their business strategy for serving the SME market.
“We knew Close Brothers was an entrepreneurial business in the asset finance marketplace. They were immediately interested because technology is such a big asset class in terms of capital investment by UK businesses, irrespective of their size,” said McVicar.
Close Brothers Technology Services offers residual value finance, hire purchase and loans, typically on three to five-year contracts. In a little over two years, the company has built up a 24-strong national team with a growing reputation for its client-focused ethos. The Thames Valley and Solent region is served from offices in Hove, Reading and Southampton.
Understanding the SME market
Close Brothers Technology Services’ core client base is companies with turnover above £10 million and more than 100 employees that invest around £250,000 a year on hardware, software and IT services.
“It’s usually when companies reach this size that they can experience management issues around their technology assets. They need to establish clear rules on data security, decide on product refresh cycles, and keep an eye on bringing down the total cost of ownership,” said McVicar. “Our solutions become more relevant at this point.”
Close Brothers Technology Services is adept at understanding and meeting the needs of company directors who may have differing views on technology investment. “IT directors and chief information officers usually focus on delivering the best solutions quickly with the best quality products. On the other hand, CEOs and finance directors are often more interested in value for money and low cost solutions,” said McVicar. “Our client relationships are about finding the best path for everyone.”
Vendor agnostic
Close Brothers Technology Services is vendor agnostic and happy to bring as many equipment providers to the table as its clients want during the technology bidding process. Close Brothers Technology Services arranges meetings between clients, vendors and manufacturers to discuss technology options. It also guides clients on their technology strategies to ensure they get the best value from their investments.
A benefit of Close Brothers Technology Services’ close collaboration with vendors is being able to see the breadth of forthcoming technology solutions. “We get early sight of manufacturers’ roadmaps for future products so we can recommend solutions to clients that will match their lifecycle requirements,” commented McVicar.
Tackling the hidden costs of IT ownership
‘Think before you buy’ may sound like obvious advice but it can be overlooked by businesses when they buy technology and services. Close Brothers Technology Services’ consultative approach with clients focuses on answering practical questions, like how long they will want the equipment and what they intend to do when the time comes to replace it.
“One issue businesses might not factor in is that the older the technology gets, the higher the ongoing costs of maintenance, updates and security. These can be significant hidden costs, sometimes two or three times more than the original investment price,” McVicar pointed out.
By looking at the bigger picture in terms of their technology requirements, companies can save on the cost of financing their technology assets. McVicar gave an example: “It can be tempting to upgrade with cheaper laptops that don’t feature the latest microchips. But newer equipment offers benefits like faster processing speeds and longer battery life,” he explained. “Although you may pay a slight premium for newer kit, this is often outweighed by higher residual values, which bring down monthly asset finance costs.”
Clients are often surprised at how much value can be left in their old equipment. “We help clients get some of that value back, for example, if equipment can be broken down for spare parts or re-sold,” said McVicar.
Data security priority
Close Brothers Technology Services’ solutions go beyond traditional financing to include securely maintaining data held on equipment. “In fact,” said McVicar, “we believe we are the only UK finance company offering Blancco data erasure software in our contracts.”
For a nominal extra charge in their finance agreement, clients have the peace of mind knowing data can be removed from computers, smartphones, laptops and servers as often as they need. Data removal is certified as being in line with regulatory requirements, including GDPR. When the cycle of IT ownership ends, data erasure and equipment tracking during disposal can be included in the finance contract.
Future tech finance trends
Asset finance solutions are adapting to account for the transition from traditional desktop PCs and notebooks to smart devices. The switch by companies is being driven by user experience as new technologies emerge and employees’ work patterns change, for example with hot desking, home working and BYOD (bring your own device).
Along with hardware advances is the rise of ‘software as a service’ and cloud computing. So it’s understandable that companies are increasingly looking for professional support and advice to support their asset finance decision making. Whatever type or length of funding companies are looking for, Close Brothers Technology Services aims to fit in where it is needed during the product lifecycle.
McVicar said: “We look to be the glue that joins the parts together in a company’s technology asset strategy. In our opinion, the way to get the best value from your technology is to have a structured approach to managing it. The worst thing you can do is be passive and not plan your technology financing.”
Client focus:
InLink
InLink was a start-up company that needed funding for its unique assets. InLink units are replacing payphones in prime locations in London and other UK cities to provide ultrafast, free public WiFi, phone calls, device charging and a tablet for access to city services, maps and directions.
Close Brothers Technology Services provided a multi-million-pound deal to fund the full installation and equipment costs, helping ease cashflow concerns and speed up the equipment rollout process.
“The Close Brothers Technology Service team took the time to really understand the business and worked hard with us to create a bespoke solution which met all the operating and financial criteria we were looking for.”
Monica MacKinnon, chief finance officer, Primesight and InLink
CPG Logistics
Raising capital against software intellectual property (IP) is becoming a popular way for companies to access funding for further investment. Privately-owned logistics specialist CPG’s management team wanted to finance the software intellectual property for Medisa, an online system it had developed for the healthcare industry.
Close Brothers Technology Services arranged 60-month software IP rights secured loan to finance these developments.
“We found Close Brothers Technology Services both knowledgeable and adaptable, meaning they were able to tailor a solution specific to our needs. We look forward to a successful relationship moving forwards.”
Richard Lord, managing director, CPG Logistics
PTS Consulting
PTS Consulting helps businesses transform the way they operate through IT. The company was replacing its laptops but didn’t want to impact its cashflow. A poor experience with a previous leasing provider had resulted in hidden costs and onerous return conditions.
Close Brothers Technology Services devised a laptop replacement programme that didn’t impact PTS Consulting’s cashflow, while at the same time giving them peace of mind about future funding.
“Having previously leased through a company that provided no communication or transparency around the end of lease process, it was refreshing to hear Close Brothers Technology Services identify this as a critical piece of their service offer.”
David Dewhurst, chief financial officer, PTS Consulting
Find out more ____________________________________________ closebrotherstechnology.co.uk
Thames Valley
Mike Rixon, relationship director
07703 886950
Solent & South
Martin Cadby, relationship director
07714 767256
