The transport and haulage industry is a difficult area to operate in, particularly when it comes to maintaining healthy levels of working capital and cash-flow. The operational costs associated with running a transport business tend to be high, and this can be made worse when you factor in the uncertain and often rising cost of fuel.
There are also problems associated with customer payments. Payment terms in the industry tend to be lengthy, with 30-90 days as standard. These challenges, combined with the cost of driver training, congestion charges, insurance and vehicle maintenance can cause businesses to suffer.
So what can you do?
Transport finance gives businesses a way to release the cash that’s tied up in haulage and freight transactions. Once a delivery is made, a business will issue an invoice that they’ll typically have to wait for 30, 60 or even 90 days to be paid. However, as they have already paid for the fuel and the driver for the journey, this can cause a potentially dangerous cash-flow shortfall.
By releasing the capital tied up in the invoice, transport businesses will have the money they need to pay for the day-to-day running of the business and to fund growth during this time. Businesses can choose to effectively ‘sell’ one or all of their invoices to a finance provider. In return, they receive up to 90 percent of the value of the invoice upfront within as little as 24 hours.
At Business Expert, you can compare the UK’s invoice finance providers to find the best deal for your transport firm.