Success Stories: ESM Quarry

INTERVIEW WITH MR. EBENEZER SARPONG MENSAH, CEO OF ESM QUARRY

Quote from Mr. Ebenezer Sarpong For start-ups; I think it is impossible to engage in this type of business except through Leasing’- Mr. Ebenezer Sarpong - CEO, ESM, Quarry, Accra

Q: How were you able to finance such a multi million dollar Quarry business?

A: Financing was one of our major problems; but leasing played an important role in getting our business

Q: How did leasing contribute to your project financing?

A: Leasing was the first form of financing we took to secure the initial equipment on site at the cost of US$65,000.00. Thereafter, we approached EXIM bank America for a short term loan of US$2m for other equipment. EXIM bank could not meet all our financial requirements; the best option available was to look for equipment financing from a leasing company which was granted.

Q: So why did you decide to lease rather than use any form of financing?

A: As a new company, we couldn’t afford the kind of collateral required for the business; so we had to lease.

Q: Has leasing delivered your expected benefits?

A: Yes, I am comfortable with leasing; we have completed two lease transactions and currently on the third one. Leasing is absolutely good for our kind of business.

Q: Has leasing helped your organization to con- serve capital and improve cash flow?

A: Yes of-course, we don’t use our resources to acquire equipment; we lease them. We pay only a percentage of the total cost of the equipment to acquire it. Our business also generates enough revenue to cover rentals and breakeven.

Q: What do you find commendable about leasing as a means of business / SME development?

A: Leasing is ideal for our business, it is difficult to obtain a loan without collateral. For a Quarry business, the initial investment is huge. No bank may want to support this kind of business without collateral. Even if only 50% collateral is demanded, it will be difficult to meet the requirements. For start-ups; I think it is impossible to engage in this type of business except through leasing.

Q: What are the benefits?

A: Businesses don’t have to look for capital or obtain loans to finance their equipment; it is more convenient to take a lease.

Q: Do you have any problem with the pricing of a lease?

A: No once it can meet my cash flow; we will pay because it is relatively convenient and safe since the equipment will eventually become ours.