How SAF aided the successful procurement of vital research equipment for Origin Sciences

Client:

Origin Sciences

Sector:

Research & Innovation

Case study: How SAF aided the successful procurement of vital research equipment for Origin Sciences

We’ve written extensively about the need for improved alternative finance options in the UK’s research and innovation sector – particularly in response to recent government budget cuts.

The equipment required for pioneering research projects is often extremely expensive and can be a stumbling block for the programme’s progression.

Flexible finance options that allow for the funding of the equipment can often be a lifeline. Alongside a structured repayment plan, these options support research groups looking for viable and cost-effective solutions to help ensure that their projects can proceed efficiently.

We recently worked with established research company, Origin Sciences, to facilitate the procurement of a vital piece of equipment for one of their projects via one of our finance solutions.

Here’s how we supported them…

The brief: 

Origin Sciences is a medical technology company that develops innovative devices and tests to aid the detection and diagnosis of gastrointestinal diseases.

As part of their ongoing research and development works, the company was seeking to invest in the Illumina NextSeq500, a genetic sequencing device that would allow for increased testing capacity and efficiency.

This stage in their research process was a vital element of their long-term strategy and ongoing product development, as it would improve the pre-performance evaluation study before the project could be validated for progression.

The product was still firmly in the development stage, meaning the research team was reluctant to part with such a significant amount of capital, which could otherwise be used to invest in other areas of the business.

The equipment is worth more than £200,000, meaning that an outright purchase would significantly impact cash flow and cash reserves. However, it had been identified as a crucial factor in the successful progression of the research programme, meaning that the implementation of a flexible finance solution could be pivotal in ensuring the equipment could still be acquired, which would ultimately be crucial to the success of this project. 

Delivery: 

We were approached by Origin Sciences directly as their preferred supplier of the DNA sequencer device, Illumina, did not offer a staged payment profile or finance option.

After assessing the market, Origin Sciences decided that a funding agreement would be the most cost-effective approach to procuring this device.

Given that the asset is extremely expensive to purchase up front, SAF approached Illumina with a proposed finance solution that would allow them to still benefit from the sale, and not miss out on the custom from Origin Sciences.

Origin Sciences approached us with a clear strategy in mind of how the finance solution could be optimised to suit their requirements for the device.

We took the time to understand their requirements and overall goals for the project, and implemented a five-year finance lease, incorporating a higher deposit payment which would consequently reduce their monthly payments.

In an added benefit to the research company, we also agreed on an option that allows them to take legal ownership of the equipment at the end of the funding term, meaning they will own it outright once the structured finance payments have been fulfilled. 

Key considerations:

As with any transaction, our team will always take the time to understand the individual priorities of the client and their project.

When it comes to research and development, we’ve seen first-hand the impact that a lack of funding can have, so implementing a cost-effective funding solution can pave the way for the successful completion of many pioneering new projects.

In this particular case, we worked with the end-user as the customer (rather than the supplier, as would be the usual scenario for a transaction like this). It was also important to keep things simple and stick to the pre-determined timeframe so that we could process the order once the customer had agreed on specification and pricing. 

For Origin Sciences, it was important for the company to have confirmation that the funding was approved and in place before committing to the purchase with the supplier.

Outcome for the client:

  • A SAF finance solution allowed for the successful procurement of an Illumina NextSeq500 worth over £200,000.
  •  Origin Sciences did not want to part with the outright capital required to pay for the DNA sequencer device and instead opted to implement a structured repayment method that would allow them to make vital investments in other business areas.

Stuart Lawson, Director at Origin Sciences, said: 

“We knew that the IlluminaNextSeq500 was a vital piece of equipment for our research program, but as a research company, the team was were keen to ensure that all funds were utilised as effectively as possible, so rather than outright purchase we needed to find alternative, more cost-effective ways of securing the procurement of this expensive device.

“SAF has been a fantastic support in implementing a funding solution that suits our needs and allows us to benefit from the equipment without needing to compromise on other aspects of both this project and projects in other areas of the business.

“We’re pleased that SAF was able to work so effectively with the supplier, Illumina, to implement a solution that suited all parties and will allow for the successful completion of a vital research project.”

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