Navigating Cashflow Bumps: How Invoice Finance Can Help Haulage Businesses Thrive

19th March 2024

trucks-being-unlioaded-by-forklifts-SBI-300981178 (1).jpg The haulage industry, the lifeblood of countless economies, is notorious for its cyclical nature and challenging cashflow. Operating on tight margins, haulage businesses often face long payment terms from customers, leaving them strapped for cash to cover operational expenses, fuel costs, and vehicle maintenance. This can create a vicious cycle of delayed growth and increased financial stress, hindering their ability to invest in new equipment, expand their fleet, or take on larger projects.

Enter Invoice Finance, a financial solution specifically designed to address this critical pain point for haulage businesses. By leveraging Invoice Finance, businesses can unlock the trapped value in their outstanding invoices, receiving immediate access to a significant portion of the invoice amount. This injects much-needed working capital into the business, enabling smoother operations and improved cashflow management.


Understanding the Cashflow Challenge:

The average payment term in the UK is 30 days, but for haulage businesses, it can often extend beyond 60 days, creating a significant cashflow gap. This delay can be particularly problematic considering the daily operational costs associated with running a haulage business. Fuel needs to be replenished, drivers require salaries, and unexpected repairs can arise, all demanding immediate attention.


How Invoice Finance Works:

Haulage businesses face the challenge of waiting for client payments while needing constant cashflow for fuel, drivers, and growth. Invoice Finance helps bridge this gap by allowing them to sell their unpaid invoices for immediate funds, keeping their wheels turning and opportunities in sight.

You provide your Invoice Finance provider with an unpaid invoice. They'll advance you up to 100% of the invoice value, minus a fee. Within a short timeframe, you receive the agreed-upon amount, providing a much-needed cash injection to keep your business moving forward. With immediate access to funds, you can focus on what you do best – hauling goods efficiently and exploring new opportunities without being hindered by cashflow constraints.

Once your customer pays the full invoice amount, the Invoice Finance company collects the payment. After deducting their fee from the collected amount, your provider then releases the remaining balance to you, completing the cycle.


Benefits of Invoice Finance for Haulage Businesses:

Improved cashflow: Invoice Finance provides immediate access to a significant portion of the invoice value, directly addressing the cashflow challenges faced by haulage businesses. This allows them to meet operational costs, invest in equipment, pay staff on time, and seize new business opportunities without waiting for client payments.

Predictable cashflow: Unlike relying on uncertain client payment cycles, Invoice Finance offers greater predictability and stability in cashflow. Businesses can accurately forecast their finances for the coming months, allowing them to make informed decisions about investments, staffing, and future growth strategies.

Flexible funding: Unlike traditional loans, which often involve strict eligibility criteria and lengthy application processes, Invoice Finance is typically more accessible and flexible. Funding limits are often based on the business's turnover rather than credit history, making it a viable option for both established and growing haulage companies.

Reduced financial risk: By not having to wait for customer payments, businesses mitigate the risk of bad debt. This improves financial stability and reduces the stress associated with late payments, allowing them to focus on core business activities with greater confidence.

Focus on growth: By alleviating cashflow concerns, Invoice Finance allows haulage businesses to focus on their core competencies and growth initiatives. This can involve investing in new equipment to expand their service offerings, exploring new routes, or taking on larger projects, ultimately leading to increased productivity and profitability.

In addition, Invoice Finance can also foster stronger relationships between haulage businesses and their suppliers. By ensuring prompt payment of invoices, companies can cultivate a reputation for reliability and professionalism, enhancing supplier satisfaction and loyalty. This positive feedback loop not only strengthens existing partnerships but also attracts new clients seeking dependable transportation solutions, further expanding their business reach.


Peace of Mind with Bad Debt Protection

At Skipton Business Finance, we understand that even with a reliable customer base, unforeseen circumstances can lead to unpaid invoices. That's why we offer Bad Debt Protection (BDP) as an optional add-on to our Invoice Finance service. This protection shields your business from the financial burden of bad debt, ensuring you receive a significant portion of the invoice value even if your customer defaults on their payment.

With BDP, you can focus on running your haulage business with greater peace of mind, knowing that your invoices are protected.


By choosing Skipton Business Finance as your Invoice Finance partner, you're not just accessing immediate funding; you're investing in the future of your haulage business. With improved cashflow, greater financial stability, and a reliable partner like Skipton by your side, you can focus on what matters most: delivering exceptional service and driving your business forward.

At Skipton Business Finance, we also understand the importance of exceptional client care. We are committed to building strong, long-lasting relationships with our haulage business partners. Our dedicated Relationship Managers take the time to understand your unique needs and challenges, offering tailored solutions and ongoing support throughout your Invoice Finance journey. Whether you're a new business owner or a seasoned haulier, we are here to partner with you on the road to growth and prosperity.

Contact Skipton Business Finance today on 0845 602 9354 to discuss your individual needs and explore how Invoice Finance can help you thrive.

- Matthew Shepherd, Chief Commercial Officer at Skipton Business Finance