£800k Invoice Finance Solution for Haulage Firm

In the fast-paced world of transport and haulage, maintaining healthy cash flow is crucial for smooth operations.

Many businesses in this sector face challenges due to lengthy payment terms, which can tie up significant capital in outstanding invoices.

This is where invoice financing comes in.

The Scenario

Our client, a thriving haulage business based in Essex, approached us seeking £200k in working capital finance.

Initially, they were unsure about the best financing option for their needs – from asset finance to an unsecured business loan to refinancing their commercial property – so, they approached us for advice.

Their outstanding invoices, under standard payment terms, wouldn't be converted to cash for at least 90 days. So, the debtor book presented an ideal scenario for invoice finance, a solution that could potentially unlock more capital than the client initially sought and with a fast turnaround.

The Solution

This approach would allow them to release up to 90% of their sales ledger value, providing far more than the £200k they initially requested.

To ensure we secured the best possible terms:

• We approached multiple lenders.
• Within the same day, we received term sheets from 9 high street lenders, providing a range of competitive options.
• We compared these offers considering factors such as advance rates, fees, and flexibility.
• We then presented and discussed these options with our client, helping them understand the pros and cons of each offer.

Based on our recommendations and the client's preferences, we secured an excellent invoice finance facility:

• Credit limit: £1 million
• Initial funds released: £800k on day one
• Competitive pricing: 2% over base rate, reflecting invoice finance as one of the most cost-effective funding solutions

The funds were earmarked for various aspects of the haulage firm's operations, including:

• Fuel costs
• Vehicle maintenance and repairs
• Driver wages and training
• Insurance premiums
• Upgrading fleet management software
• Expansion of warehouse facilities

This case study highlights the importance of expert financial advice in identifying the most suitable funding solutions.

Our client was able to unlock significant working capital, supporting their current operations and laying the groundwork for future growth in the haulage industry.