Business invoice finance for Couriers is a way of funding your sale ledger without waiting for your clients to settle their invoices with you.
We help a range of businesses including couriers and distributors to take control of their cash flow needs with Invoice Factoring, without needing to put their vehicles up as collateral.
Invoice factoring and discounting offer an alternative to traditional bank lending. They may be a good option if you have a steady customer base, the majority of whom pay on time and in full.
This can cause serious issues for a transport company when it wants to expand by acquiring new vehicles or pitching for new business. Invoice finance can help your courier business by enhancing capital enabling you to pay employees and providers without the added concern about consumers paying late.
As a leading commercial lender for the courier and someday delivery network we specialise in sourcing and structuring suitable and cost effective invoice finance facilities for the transport industry. We can find you a new facility or review your existing invoice factoring or discounting agreement with your current lender.
What is Invoice Finance for Couriers?
Courier finance is a type of funding that supplies financing against the debtor book of a company. Invoice financing is normally an umbrella terms for the particular products that give this kind of finance.
Invoice financing is simply a way to release the cash that’s tied up in your business with unpaid invoices. Instead of waiting for your customers to pay, 30, 60, 90 or 120 days. The Business can borrow against the money you’re owed from your clients.
Types of invoice finance for Courier businesses
There are several different products on the market but typically they will be a type of invoice discounting or factoring.
Invoice Factoring – Invoice factoring for courier businesses is a finance facility provided by an invoice finance lender to help business owners leverage their unpaid invoices, giving them an instant cash injection into the business.
On payment of the invoice from their customers the lender will release the final amount minus any fees and charges. Factoring companies are always happy to support courier businesses by release up to 90% of a business’s invoices straight away.
Invoice Discounting – Invoice discounting for couriers is an invoice finance facility when a company’s unpaid invoices are used as collateral for a loan. Invoice discounting companies enable businesses to leverage the value of their sales ledger.
With an invoice discounting company, when sending out invoices to customers a proportion of the total amount becomes available from the lender, which provides your business with a source of working capital throughout the month while you wait for the payment of your invoice to be processed.
Benefits of courier funding
- This is a flexible working capital that will expand as your business expands
- For companies that meet the fundamental standards it can be much more freely available compared to a traditional bank account overdraft.
- Invoice finance could be divulged or confidential
- It can offer outsourced credit control as part of the solution
- By adding bad personal debt protection or credit insurance coverage it could protect your business against bad debts
- More cost effective and flexible compared to an overdraft.
Invoice Finance for a courier business costs?
Example say your business turnover £350,00 per year.
Service Fee= £350,000 x 1.65% = £5775
BDP= £350,000 X 0.7% = £2450
£350,000 – £8225 = £341,775
£341,775 x 80% = £273,420 x 4.5%/ 365 x 45 = £1516
Set Up Fee: £265
Total Cost = £10,006 per year without disbursements
Get a funding quotation for your courier firm
Invoice Funding are a leading Invoice Factoring broker for the Courier Industry. We have sourced funding for over 200 courier companies since we started trading back in 2010.
Should your transport business would like to know more about invoice funding for couriers, the process is really quick, easy and simple. Simply complete the online enquiry on our website. Once it has been received an invoice funding for couriers specialist will be in contact.
Read more: How to start a courier business
Frequently asked questions
Should your courier company use factoring?
Your company should use invoice factoring when you routinely have a lot of invoices outstanding and your cash flow is suffering because of it.
Is Invoice Factoring a Business Loan?
Invoice factoring is not a business loan but a type of alternative finance which requires that a company has good paying customers and have outstanding invoices.
Is factoring invoices a good idea?
Invoice factoring works well for business owners that need money quickly, have reliable customers that have a history of paying invoices on time, and can afford the fees that come with selling invoices to a third party.
Does Invoice Factoring require security?
No invoice Factoring does not require security, your home or business premises will be safe should anything go wrong. Lenders may ask for a personal guarantee to be in place.
Conclusion
Invoice finance, also known as factoring, is a financial tool that can be particularly beneficial for courier businesses. Essentially, invoice finance involves a company selling its outstanding invoices to a third-party provider, who then pays the company a percentage of the total amount owed upfront. This can provide a quick injection of cash for a courier business, which may have a high volume of invoices due to a large number of customers.
By receiving payment early, the company can continue to fund its operations, pay staff, and invest in growth without having to wait for customers to pay their bills. Invoice finance can also help to reduce the risk of bad debt and streamline the company’s cash flow. Overall, it can be a valuable tool for a courier business looking to fund its operations and maintain financial stability.
Seasoned professional with a strong passion for the world of business finance. With over twenty years of dedicated experience in the field, my journey into the world of business finance began with a relentless curiosity for understanding the intricate workings of financial systems.