We talk to Bill The Invoice, Skipton Business Finance's well-known mascot in the haulage industry, to find out more about the growing popularity of Invoice Finance in the logistics sector.
What exactly is Invoice Finance?
Invoice Finance is the fastest growing alternative to traditional bank overdraft funding. In basic terms, it’s advancing cash against a company’s outstanding invoices. It’s a great cash flow solution because it simply accelerates the cash flow in the business and because it is a percentage of your sales, the amount of cash available grows are your business expands.
What types of Invoice Finance are there?
There are two basic facilities available.
There is invoice discounting, which immediately releases cash tied up in unpaid invoices, allowing you to put cash straight back into the business as soon as it has been earned. I can advance you up to 90 per cent of the value of your unpaid invoices, with the cash typically made available to you within 24-hours. The business I fund continues to collect invoices, normally with the end customer being unaware of the invoice finance company’s involvement.
There is also invoice factoring. This is when we make a pre-arranged percentage of the invoice value availably to you, again, typically within 24-hours when new invoices are issued. The main difference is I will also manage your sales ledger, chasing and collecting payment. This can be helpful for smaller businesses in freeing up time, as I provide a full credit management and provide credit checks and information on your prospective customers. Our credit controllers provide the service 52 weeks of the year, giving the smaller business a full-time service which does not take holidays and is never off ill. Hence invoices are never left unchased.
Is it more expensive than an overdraft?
Not necessarily. If the facility is used correctly, it can pay for itself by paying suppliers earlier and obtaining discounts for early payments. It can normally generate double the amount of cash available from an overdraft, providing good value for any additional cost.
What are the benefits of Invoice Finance for a haulage business?
The benefits are everything you should expect if you didn’t have any cash flow issues! You might not be able to do anything about rising fuel costs, HP to pay on your trucks, drivers to pay weekly wages or even if VOSA increases, the level of Financial Standing requirements. But what you can do is find an effective cash flow solution that allows you to have access to funds without the worry of running out of cash. So if you’re struggling to work within your current funding limits, or if just want a flexible funding solution that will help take your business to the next level, then give me a call.
Why use you, Bill?
Because I’m not a computer! I take the time to understand the future potential of hauliers and I don’t just look at historical financial performance. All the decisions I make are without scorecards or computers – I’m proud to say that I look at each business on individual merit. I have enjoyed great success working with UK hauliers who, when given access to additional working capital, go on to flourish and reach their true potential. On top of all this, I’m backed by an award-winning team waiting to help and assist in whatever way they can. So give me a call today on 0845 602 9354 or submit an enquiry now!