Challenge: High upfront investments in fleet solutions
Valoriza’s services are targeted towards municipalities with a goal of penetrating the public sector. As municipalities are experiencing tough economic times, suppliers are left struggling to find ways to do business with them. “In our national market of Spain, we are focused on growing our revenues in the public sector which can be a challenge for municipalities that have liquidity and cash constraints,” stated Rafael Gómez de Parada, Chief Financial Officer at Valoriza.
A typical waste collection vehicle can cost up to € 200,000 and many of Valoriza’s target projects may require a number of these vehicles. Luis Botía, Controller at Valoriza explained, “every time we win a public contract for waste removal or waste treatments, we have to invest high amounts upfront that will be paid back over eight years.” Parada continued, “our business investments usually involve various waste collection trucks, cleaning vehicles and waste containers.”
Faced with the decision to grow their business or turn down new public contracts, Valoriza made the decision to seek a financing partner to support their expanding fleet solutions demands. “We needed a financial partner that could be flexible. We wanted a partner willing to analyze our business model and see how we could finance it,” stated Parada.
Solution: Flexible fleet solutions financing
Juan Garcia Herce, Fleet Solutions Account Manager at DLL, worked with Valoriza to build the right financing program. Garcia shared, “one important need for Valoriza was to have a partner who was willing to finance a variety of multi-branded assets.”
He continued: At DLL, we always adapt our offerings to meet our customers’ specific needs and thanks to our fleet-centric approach we developed a comprehensive mix of financing solutions to cover Valoriza’s vehicles and about two thousand containers.
Fleet solutions financing is new for the waste recycling market. Valoriza benefits by having one finance partner who helps them to provide capital, customized financial solutions and helps to control the fleet. Ultimately, Valoriza selected DLL as a financing partner to support their investment capabilities. “We chose DLL to strengthen our investment capacity for the public contracts we bid on,” says Rafael Gómez de Parada, Chief Financial Officer Valoriza.