A CAR auction house has secured a £250,000 finance deal that helps keep business with its largest customer flowing.
Intercity Motor Auctions (IMA) received backing from Royal Bank of Scotland for a letter of credit in favour of Arnold Clark.
A letter of credit allows a supplier to have a greater level of confidence in dealing with a customer.
It typically means the bank or financial backer will cover any payments due to the supplier that are not received on time or for the correct amount.
The finance package means Glasgow-based IMA has secured its crucial relationship with the motor dealer.
Alan Mitchell, accountant at IMA, said: "It is something Arnold Clark is going to do with a number of auctioneers.
"We have a long-standing relationship there, so we were one of the first asked to get involved with this. It was very much an agreement forged between us and them.
"As an auction we never have title of the stock so it just secures Arnold Clark's stock position until such times as we settle the funds. For us it was crucial to do this. In the motor trade in Scotland if you are not dealing with Arnold Clark then you are not likely to be doing much."
IMA, founded in 1983, is Scotland's second-largest independent car auction company and employs 35 people. It had a turnover of £1.5 million in 2011.
Mr Mitchell praised the speed with which RBS put together the funding.
He said: "There is a competitive advantage in this for us. As Arnold Clark looks to roll this out, not all auctions will provide it. So for us it was really important it happened quickly and the bank, to their credit, got that immediately.
"We were adversely affected by the scrappage scheme as it diverted a lot of stock away from us and into the scrapyard.
"But we have ridden things out reasonably well and are still profitable."
Director and founder John Melvin added: "We've spent almost 30 years building this business and even though there have been some difficult economic periods, our business model allows us to thrive in good and tough times.
"There is great demand for the services we offer and we'll continue to maximise the opportunities we have." Andrew Scott, from RBS commercial banking in Glasgow, said: "This is a well-established business and our support reflects the vision, professionalism and commitment of the management team."
Arnold Clark declined to comment.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article