• Factoring For A New Start Haulage Company

    Factoring for a haulage startup run by a foreign national non homeowner.This is an interesting case that demonstrates just how flexible some UK factoring companies can be. We have just arranged a recourse factoring facility for a new startup haulage company handling frozen food. The company is operated by a foreign national, ex-driver, that was NOT a homeowner. These aspects may have posed a problem for some invoice finance companies.


    Factoring For A Haulage Startup

    Several of the aspects of this logistics deal would be a problem for some factoring companies, we were able to find them a funder that was able to accept all of them, not to mention the minimum size criteria that some factors will apply:

    • Foreign national director with no prior experience of running a company.

    • New startups in themselves are not accepted by many finance providers.

    • Non homeowner - home ownership has increasingly become a requirement of many invoice finance companies. Despite the fact that their primary security is the underlying book debts of the company.

    • Frozen food - this is another trade that some financiers don't like to handle, due to the risk of the failure of refrigeration leading to potential disputes over the loss of the frozen goods.

    • Transport logistics and haulage - whilst this sector is widely accepted by factors, there are often concerns over contra trading accounts. These occur when the haulier delivers a load to a customer and then takes a return load, creating both a sales and purchase transaction with the same debtor. There is then the potential for the customer to offset their purchase invoices against their sales invoices that are due (a contra situation). Factors often fear these as it can reduce the value of the invoices that they rely upon as security for the prepayments that are given to the client. There are however many funders that will offer haulage factoring.

    We managed to overcome all of these issues and find a factoring company that were pleased to welcome this new client on board with a recourse factoring facility. They will receive both prepayments against their sales invoices (that can be used to pay for costs such as fuel and other suppliers) and a credit control service. This means that the factor will chase up any unpaid invoices, so that the client can focus on running their business, rather than chasing delinquent debtors.

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