In a recent episode of the On The Ramp podcast, the team sat down with Lee Schofield, founder of One Funding, to explore the often misunderstood world of business finance — and more specifically, how independent garages can make informed decisions when it comes to funding growth and investment.
Lee brings almost 20 years of experience in asset finance, having worked closely with workshop and body shop businesses throughout his career. His new venture, One Funding, was established with the goal of bringing transparency and clarity to the finance process, an area many garage owners find confusing or even mistrust.
YouTube – https://youtu.be/8y5jMTUKvIs?si=V00DStPznx6TWuuv
Spotify – https://open.spotify.com/episode/2mfG3O4Xg1Bj8D18Mk3WrH?si=6yKxMTf3T9u71ILaL64bcA
The Financial Challenges Facing Garages
One of the key themes of the conversation was that many independent garages — especially those that have been established for years — have a reluctance to borrow. Often this is down to a lack of understanding or previous negative perceptions of the finance industry. However, this approach can lead to missed opportunities. As Lee pointed out, the industry is moving fast and requires ongoing investment in training, equipment and facilities. Delaying that investment because of uncertainty around finance can ultimately hold businesses back.
Another challenge is that finance is not always presented in a clear and consistent way. Contracts can be long and complex, and business owners often struggle to compare options on a like-for-like basis.
Planning is Key
The conversation emphasised the importance of planning. Garage owners should think about where they want their business to be in three to five years, and ensure that any finance decisions align with that goal. The simple question of whether a piece of equipment will generate revenue, save money, or is simply a ‘nice to have’, is one every owner should ask themselves before signing a finance agreement.
The team also discussed the importance of understanding the full cost of finance — not just the monthly payment — and the risks of taking on obligations without a clear view of how they fit into the wider financial picture of the business.
Options for Finance
Lee outlined some of the main finance products available to garages:
- Hire Purchase (HP): Currently very popular due to tax benefits under the Annual Investment Allowance. Allows ownership of the asset at the end of the term.
- Finance Lease: Often chosen when businesses don’t have the VAT available upfront. Ownership is still possible at the end of the term, but via a slightly different process.
- Business Loans: Useful for working capital or acquisitions, but can be more expensive and riskier if not used appropriately.
- Asset Refinance: Can release cash from existing equipment, though it’s less common in the garage sector due to the nature of the assets involved.
A key point was that different products serve different purposes. For example, it generally makes little sense to use an unsecured business loan to purchase equipment that could be financed through asset finance, which is cheaper and better matched to the nature of the asset.
The Role of a Good Broker
Lee also spoke about the value of working with a reputable finance broker. With the rapid growth of the broking industry in recent years, quality has become mixed, but a good broker will take the time to understand the business and guide the owner to the most suitable product. They should be transparent about fees and commissions, and focused on long-term relationships rather than short-term wins.
Importantly, brokers with strong relationships with lenders can often secure better terms and help present a stronger case to the underwriter — particularly valuable for new-start businesses or those looking to step up to the next level.
Final Thoughts
The podcast made clear that finance, when used correctly, can be a powerful tool for business growth. But it requires careful thought, good advice, and an understanding of the risks and obligations involved.
As Lee put it, the goal at One Funding is to be on the journey with their clients, helping them to make the right decisions at the right time — and to avoid the kind of mistakes that can easily be made when finance is rushed or poorly explained.
For garage owners considering their next investment, the key takeaway is simple: take the time to plan, ask the right questions, and make sure any finance fits into the bigger picture of where you want your business to go.
