EDT Automotive ’emerges from April troubles’ for opportunities ahead
Award-winning engine decontamination specialist EDT Automotive has battled through its toughest-ever month as the effects of the coronavirus hit home hard.
Trouble flared when their invoice factoring provider blocked access to funds without notice.
“We were trading at only around 30 per cent of our agreed facility,” said EDT founder and managing director David Holmes. “Yet we suddenly couldn’t access our own funds.
“We had a five figure amount showing on their own system as available but they wouldn’t release the money, leaving us with zero income.”
EDT had already responded to COVID-19 by placing staff on furlough and taking directors’ salary reductions. This has enabled them to meet lower levels of demand for garage support with a skeleton operation.
Despite being a loyal customer for six years of successful trading, EDT Automotive was expected to argue the case for why they needed their own money. This ‘cash crunch’ quickly made a difficult situation perilous.
“April descended into flat out business administration,” said Holmes. “We had to find a new invoice factoring company, negotiate payment holidays with several of our asset finance providers and seek a CBILS loan.”
The Coronavirus Business Interruption Loan Scheme (CBILS) approved EDT’s borrowing within 10 days thanks to the strength of the underlying business but the application process itself proved very complex.
“We had to try and explain not only our operating model and sector dynamics but also the long term impact of this pandemic,” said Holmes. “These are questions no one knows the answer to!”
Holmes urges all aftermarket business to ‘keep fighting’ to access the support that’s out there and believes our sector is relatively fortunate in being poised to bounce back.
EDT received orders in March that are now being delivered and there’s a gradual uptick in enquiries too. At garage level, there’s strong latent demand ahead from deferred MOTs and delayed maintenance work.
“The enforced break in trading has actually allowed many garage owners to take stock,” said Holmes. “Coming out of this, there’s going to be an older profile of UK cars needing servicing, MOTs and more repairs.”
Holmes believes those garage owners who used to say they were ‘too busy’ to offer engine decarbonising will become fewer.
“We’re looking forward to working within what will be a keener and more proactive sector,” said David Holmes. “We suspect garages will not be taking anything for granted and will not want to miss out on any market opportunities.”