Transport & Haulage
Do you own a business in the world of construction? Is waiting for your invoices to be paid slowing your work down? Here’s how invoice finance could be the answer…
Contents
- How can invoice finance help within the construction industry?
- How does it work?
- A real-world example
- What to do next
Benefits of Invoice Finance for Transport and Haulage Companies
It is the same scenario you see time and time again – you have provided goods or services, sent out your invoice and then you may need to wait 30, 60 or even 90+ days to receive those funds. Your growth is halted; if you had the working capital, you could keep more vehicles on the road – pay for more fuel, keep on top of maintenance costs and driver’s wages.
This is where an invoice finance facility could help. Instead of waiting for and chasing your debtors to pay, you could receive up to 80% of your invoice value that same day. So, how does it work?
Step-by-step guide to invoice finance
- Send your invoices
Firstly, you send your invoice to your customer, and another copy to your chosen lender.
- Receive up to 80% of the invoice value
Depending on the terms agreed, you will receive up to 80% of the upfront invoice value on the same day as when you issued the invoice.
- Your customer pays their invoice
Your customer pays their invoice within the agreed terms of 30, 60 or 90 days.
- You receive the remaining 20%
Once your customer has paid their invoice, you will receive the remaining 20% of the invoice minus the lender’s fee.
A made-up example: Super Transport Ltd
Super Transport Ltd have completed a series of deliveries and send their customer an invoice of £10,000. They expect the invoice to be paid after 30 days from the end of the month. In the meantime, Super Transport Ltd receive a phone call requesting 20 more deliveries to be completed in the following week. This is great news to be receiving more work, however, two of the vans need repairs and staff wages will need to be paid at the end of the week. At the time they receive the call, Super Transport Ltd do not have the cash flow to accept the job.
Fortunately, Super Transport Ltd have an Invoice Finance facility. They send a copy of the invoice to their lender and receive £8,000 that same day. They can pay for the vans’ repairs and hire their staff for the week ahead. After 30 days, the lender receives the invoice payment and sends Super Transport Ltd the remaining £2,000, minus their fee.
Having the Invoice Finance facility has meant that Super Transport Ltd have been able to grow their business incredibly fast compared to if they were having to wait to receive funds from their debtor.
How do I get an Invoice Finance facility?
This is where Contact Business Finance comes in! We have a wealth of knowledge in the world of Invoice Finance and can put you in touch with the most suitable lender. In a free-of-charge service, we will compare the market for you to find what would be best for you and your business.
And it’s not just Invoice Finance we can help with – we can look at business loans, asset finance, trading finance and more.
For more information or for confidential chat about your business finance needs, give us a call on 01902 219260 or email info@contactbusinessfinance.co.uk.
