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.
These challenges, combined with the cost of driver training, congestion charges, insurance and vehicle maintenance can cause businesses to suffer.
There are also problems associated with customer payments. Payment terms in the industry tend to be lengthy, with 30-90 days as standard.
This is where transport finance comes in: specific invoice factoring to offset the cash flow delays of waiting for payment.
Invoice Finance for Transport and Haulage Firms, including Couriers and Distributors
For transport firms who don’t wish to use their vehicles as collaterial, transport finance offers a convenient and effective solution.
By using accounts receivable (unpaid invoices) as collateral, a factor will lend you up to 90% of the invoice value within a matter of days.
This solution can revolutionise your cash-flow cycle so that you can concentrate on the running of your business.
- Access to Quick Cashflow – often within 48 hours
- Doesn’t rely on good credit since the factor assesses your clients not yourself
- Outsourcing your sales ledger can free up crucial administrative time
- Credit Checking customers may facilitate better strategic decisions
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.