3 Ways Invoice Finance Helps Your Transport Company Grow
We recently helped a stressed out owner of a small transport company. He had all his vehicles on the road and his fuel card company was threatening to cut off his access to fuel. His drivers were across Australia and about to be stranded. He rang his wife, stressed and very worried that his business was about to collapse around him.
His wife was also a director of his business and regularly helped out in the office, worked on the books and played the role of therapist when her husband needed to vent. Her business knowledge was good and she kept up with finance options available to small business. She was determined not to have their family home on the line for the business this time around. She had heard of invoice finance and set about googling “how to qualify for invoice finance”. She came across our Invoice Money blog and kept on reading.
After completing her due diligence and getting a feel for how Invoice Money operates, she put her anxious husband straight onto us. He spoke to our friendly team and gradually began to see the light. He had a number of business to business invoices that were due to be paid in the coming weeks. He was $50K short of meeting his fuel and wages bill that was due that week.
Within 72 hours we had advanced funds against his current business to business invoices. The business owner got his drivers back on the road and back to delivering their goods. He paid the fuel card balance owing and got the fuel card company off his back. He even booked a much needed maintenance visit for a truck that he had been putting off.
These are the 3 ways invoice finance can help you grow your transport and logistics business, whether you are the owner operator of a small trucking company or are running a fleet of trucks across the country.
1. Invoice Finance Funds Your Working Capital Gap
A working capital gap is a fact of life in a transport business, and not everyone has a big enough contingency fund put aside to cover it every time. Fuel often needs to be paid within 7 days and drivers need to be paid weekly. Shippers often have 30 or even 60 day payment terms, making a working capital gap and a cash flow shortage a regular problem. As a regular provider of invoice finance to the transport industry we are very familiar with this situation and understand the cash flow shortage is a timing issue.
2. Invoice Finance gives you a Competitive Advantage
Access to finance can give you a competitive advantage by unlocking funds tied up in debtors. A transport company can grow by hiring extra drivers and taking on extra trucks by accessing funding regularly. This is especially true when compared with other owner operators who are often hamstrung by bank funding or large credit card debts. These companies have to go hat in hand to the bank every time they want to finance a new truck. With invoice finance, the facility can grow with your company as the size of your invoices grow.
3. Invoice Finance Provides a Quick and Reusable Cash Flow Solution
One of the best things about invoice finance is that you can use it as little or as much as you like. There are no lock in contracts and you can fund either a single invoice, selected invoices or even a single customer with longer than usual payment terms. It is easy and quick to access particularly one you are already an approved customer. We typically fund up to 90% of the value of your outstanding invoices in as little as 72 hours. Imagine trying to get bank approval for funding in that time!
We love keeping the wheels of small and medium business in Australia turning, and doing our bit to improve the stress levels of owner operators in the transport sector.
Invoice Money is the Invoice Finance provider of choice for SMEs. You can contact our friendly team here.