- 20 Apr
Transportation Factoring Companies
Transportation and distribution are key sectors for the use of factoring services. Many companies within those sectors use this form of funding, in order to unlock cash to improve their cash flow.
Transport companies accounted for 6.6% of all clients of members of the UK Finance (formerly the ABFA) as at the end of December 2018. Distribution companies accounted for 23% of client numbers, at the same point in time.
There are some case studies on our site for the sector, one where we have found a large, 50% annual factoring cost saving for one haulage company that were already using factoring.
Whilst factoring (funding and credit control) is one option for hauliers, there are also funding only options known as invoice finance or invoice discounting - if you want to retain the credit control function yourself.
In some countries, such as the USA, there are specialist transportation factoring companies that deal with only that sector. However, in the UK, most factoring companies deal with the full range of transport companies, haulage, freight and trucking companies. Courier services are often also included within the same sector, and are also highly suited to the use of invoice financing.
The key benefits of a factoring facility are the release of cash against unpaid customer invoices, and this cash can be used to boost the cash flow of your business, as you don’t have to wait around to be paid by customers.
The credit control service, that is included within the facility, also means that you do not need to undertake this function in house, providing you choose a supplier that delivers a comprehensive credit control service.
Read an example of how we found a new startup haulage business recourse factoring.
Paying Fuel Costs
In the case of transport companies, often fuel can be a significant cost, as can be leasing payments in respect of vehicles. The proceeds from receivables financing can be used for paying fuel costs in addition to other costs, such as labour and monthly overheads.
Vehicle & HGV Leasing
In addition to funding against unpaid sales invoices, our finance partners are able to help you arrange various forms of purchase finance, such as leasing, in respect of vehicles. This can include cars, vans, lorries, HGVs (heavy goods vehicles). This kind of finance can be included as part of a funding package for a transport company (or on a standalone basis), either against new vehicles, or existing stock.
For more information please speak to Sean on 03330 113622 and he will happily put you in touch with suitable transportation factoring companies.