A to Z Haulage

This is a small courier/haulage company with 5 vans and one HGV carrying all sorts of goods around the UK and into Europe. The company had been going 18 months and was gaining a good reputation for reliable service.

Financial turnover in current year was heading rapidly towards £350,000.

The business was also profitable and the owners (a husband and wife team) had ambitions to expand the business to 10 vans and at least one more HGV within six months.

However they had growing problems.

- They were constantly turning work down as they simply didn't have the cashflow to bring in more drivers, hire additional vehicles or incur extra expenses - and of course the bank had a very tight limit on them.

- They were also under pressure to pay fuel suppliers, subcontractors and the new ferry account needed clearing.

- They had just about managed to meet all these expenses up to now by drawing on their own savings - but these were rapidly coming to an end. And anyway they wanted to see some of the money they are making from working so hard in their own pocket. They know they are profitable but seem stuck in a trap of always owing money with nothing coming in! And they are spending more and more time that they should be putting into their business development on sorting out financial issues.

Sound familiar?

But on the other hand they were owed quite a lot of money from their customers.

The Solution

We arranged a factoring agreement with a leading independent (non bank owned) factoring company that immediately released 80% of all the money they were owed by their customers. And the whole arrangement only took a few days to arrange. The financial pressure disappeared immediately.

In this example the factor also took over (very professionally) the credit control and sales ledger maintenance and this allowed the companies partners to focus on new customers not just their old ones - bring new business into the company.

Bills were now paid on time and their reputation was enhanced with their suppliers and subcontractors.

As cashflow now exactly matched the needs of the business they pushed their expansion plans forward and within a few months had 3 HGV's and 12 vans on the road.

And the costs - well actually in real terms there was no cost - as the increased profitability from the new vehicles (which they would not have got without the extra working capital) more than paid the cost of the new facility.