Invoice Factoring for Haulage Companies

Invoice Factoring for the Haulage industry is a perfect funding solution if you are running a growing haulage business with a significant amount of money tied up in your debtor ledger through unpaid invoices? Is the problem becoming greater and holding you back the faster your business grows? This is where invoice factoring for haulage can help.

Whether you’re a one-man owner-driver or have a fleet of trucks, we can make sure that you have cash in your bank as soon as you raise an invoice. We truly believe that the UK logistics sector is THE most important sector in the UK economy

What is invoice finance for transport and haulage businesses?

For transport and haulage companies, invoice factoring for haulage and transport companies is very beneficial to keep a steady cash flow and meet the high cost demands of this type of business. When you are regularly waiting for clients and suppliers to pay their invoices it can put huge pressure on your business potentially making it difficult to meet high day-to-day fuel costs and the quick turnaround times required in this industry.

Whereas haulage factoring or invoice discounting can provide you with the cash you need quickly and confidentially whilst also giving you the opportunity to maintain control of your own debtor ledger. If customer service and client relationships are of particular importance to you, then invoice discounting could be the ideal solution for your cash flow.

Fuel costs, exchange rate fluctuations, unfavourable import and export ratios and an economy which ebbs and flows make it increasingly difficult to operate a profitable business.

Haulage Factoring is an excellent way to keep a steady flow of working capital going through your business allowing for drivers to be paid, vehicles to be maintained and fuelled and goods to be transported into and out of the country without that pit in the stomach moment when the money coming in just isn’t meeting the money going out requirement.

Invoice Factoring for Haulage companies helps to balance the books; you know when you are going to get paid and this steady stream of money gives you not just peace of mind but a chance to concentrate on ensuring that you maintain business momentum.

We know the importance of a steady cash flow available at all times to keep haulage businesses and their vehicles moving; we work with you to make finding you a haulage invoice factoring facility as easy as possible. A secure credit facility provides you with an effective solution speeding up the order-to-payment chain and ensuring drivers can be paid, goods can be moved and vehicles can be refuelled. With years of experience working with haulage, transport businesses like yours and our panel of funders, we make it easy for you to obtain the money you need for your business as quickly as possible.

Benefits of Haulage Finance

  • Cash released in 24 hours after invoices are raised
  • Receive up to 95% of the invoice amount
  • Credit control can be fully managed or confidentially kept in-house
  • Improves cash flow for your business
  • Negotiate better terms with your suppliers
  • Bad Debt Protection can be added to protect against non-payments

It allows you to release funds against the value of invoices within 24 hours of their issue. This means that, rather than wait for your customers to pay, you gain immediate access to cash that can be used to keep the business running as usual, or to grow your business with new clients and contracts.

When it comes to finding the right type of invoice finance for your business, you may find either invoice factoring or invoice discounting provide a better fit.

With invoice factoring the funder will additionally manage your sales ledger on your behalf, with their credit management resource and expertise reducing in-house overheads and improving collection times in general.

Invoice Discounting for the Haulage Industry

CHOCS (Client Handles Own Collections) is readily offered to haulage and transport businesses. It is basically a kind of invoice factoring facility however instead of the invoice funder doing the credit report control you manage your own credit control. In a similar method to invoice factoring, but your client will not know there is a funding facility in place

This type of funding is very similar to factoring, the main difference being that your customer may not be aware that you have taken on cash flow finance. You remain in control of the sales ledger, collecting payments as normal and sending out reminders. This allows you to maintain your own style of communication and standards of customer service, on which the success of your company relies.

What are the costs?

As an example an invoice worth £1,000:

The Invoice has a value of £1,000 and a discount rate of 3% :

  • 80% advance results in cost per £ of 3.75p
  • 85% advance results in cost per £ of 3.52p

The two charges that are associated with Invoice Factoring and discounting are : discount charge and service charge.

Discount Charge

The discount charge works in the same way as interest payments on a loan. The charge is applied to the cash advance provided by your Invoice Factoring provider, and is based on the UK base interest rate plus commission charge of your provider.

In general, the discount charge ranges from 1% to 3% over the base rate, and is calculated for each day following the cash advance. Most providers require the discount charge on a monthly basis, while others prefer weekly payments.

Service Charge

The service charge is the cost of running your Invoice Factoring facility, and it consists of various services provided by your Invoice Factor, such as credit management, collections, and administration.

Service charges are typically between 0.75% and 2.5% of your annual turnover. This rate depends on factors that influence the cost of running your Invoice Factoring facility, such as invoice volume, size, and customer base.

Just Some of the Invoice Factoring Funders we Work With…

Bad debt protection

Bad debt protection gives peace of mind as it protects your business against the risks of one or more of your customers failing through insolvency or undisputed debt. It is particularly prudent if you are only trading with one or a handful of customers who you rely on for the majority of your turnover.

Also consider using Asset Finance, either via a hire purchase or lease agreement to help spread the cost of any new or used vehicles being purchased, or if you are looking to re-finance any existing vehicles to fund cash flow we can combine this with a factoring or confidential invoice discounting facility.

Fund Your Business

Speed up your cash-flow today. Forget issues caused by slow-paying customers