The industry: Transport – non specialised
The Australian Invoice Finance Team would like to welcome another finance broker referred client business based in Western Sydney. The medium sized sub-contract transport company provides general freight transport for clients operating on the eastern seaboard of Australia.
The business has been operating for more than 7 years and had always struggled with cash flow. The business is owner-operated by a husband and wife team. They recently won a new large contract but had insufficient working capital to service the fuel, maintenance and salaries required to fulfil the contract. The opportunity with this contract also required a new vehicle with trailer and the cashflow or money in the bank account to pay for it.
Previously to secure a positive cashflow the client has been operating a bank overdraft of $150,000 which was fully utilised most of the time. Thus, the client had to find another flexible invoice finance to support the cashflow. Most importantly the new funder needed to understand the client and how they do business.
Transport, general freight, bulk haulage or specialised freight is one of the industry’s most common and suitable business sectors to the benefits of Invoice Finance due to short creditor terms on fuel, high maintenance costs and weekly payroll requirements.
What is happening:
Things were difficult taking on a new large client as it would have presented huge cash flow issues for the Directors without an appropriate finance facility like factoring. The cash flow issues had resulted in a ATO arrangement being in place which was a big issue for the bank. The bank did not offer any more money and so the client contacted their finance broker for a solution. The broker understood the issues and immediately identified that the cash flow would quickly be available from the debtors invoice if they contacted a Cash Flow Specialist at Australian Invoice Finance.
In a short time the deal was done, the bank realising they could lose a client was then helpful in supporting the client for the new factoring facility. The bank overdraft was now funded as well by the factoring facility.
The new freight contract is proceeding on time for the client, the ATO arrangement is up to date with plan to payout early and the Directors now do not experience the cash flow distress and pressure now they are factoring.
This is a client who has consistent working capital facility and can now grow the business. At Australian Invoice Finance we provide Fast, Flexible Funding to our clients.
Another Done Deal!