- 27 Jul
Funding Body Shops As Car Accidents Increase
Funding could be required to help car body shops cope with increases in the number of car accidents as we exit lockdown restrictions. We have been able to help many UK body shops find the funding that they need to maintain their cash flow.
Car Accidents Set To Increase
A recent conversation turned to the subject of road traffic accidents and anecdotal evidence that there has been an increase in car crashes amongst people that we knew. This led me to look into the subject, and back in April Tyrepress reported that NFU Mutual was anticipating a sharp rise in collisions as we exit lockdown.
As people return to making long car journeys historic evidence suggests that accidents rise. Apparently, NFU Mutual saw a 22% increase in claims during May last year shortly after the lockdown was temporarily relaxed. The article also suggested that 1 in 4 drivers are nervous about making long car journeys as lockdown is lifted.
As non-essential travel returns there is likely to be another spike. Holiday lets are now open with the concept of a UK "stay-cation" becoming increasingly popular. Non-essential retail and hospitality and indoor leisure are also back on the radar. As the final lockdown restriction is set to be lifted later this month car accidents are likely to be on the rise.
Funding For Body Shops
This is likely to bring a stream of new works for car repair body shops. Whilst this will likely be welcomed by the sector following the effects of long term lockdown, it may also bring cash flow issues.
Cash Flow Issues
The car repair sector often relies upon payments from insurance companies to cover car accident repairs. Whilst insurers are often high-quality debtors, processing the proceeds of a claim can take time. The car body shop will often have to order parts, pay staff and premises expenses, before getting paid for the work they have undertaken.
This is where invoice funding for body shops can play a role. Specialist financial facilities existing for the car body shop sector. A funder will take on the repairers invoices to insurers in return for the face value of the invoice (less a small fee for the service). The repairer no longer has to wait for the payment from the insurance company, as the value of the invoice becomes available immediately. We have been able to put these type of facilities in place within a few hours, so the set up is straightforward. For more information please speak to Sean on 03330 113622, and he will arrange invoice funding for your car repair body shop.
Related information: Government statistics on road accidents.