This week is the Road Haulage Association’s first annual National Lorry Week, a week dedicated to emphasising the importance of the road haulage industry. In the spirit of this campaign, we at Gibson Hewitt bring you this short guide to the business finance options available to our clients in the haulage industry.
As a haulier, physical assets are essential to your business – so asset finance can be one of the most important ways to grow capital. When you refinance an asset, a lending institution will advance cash to the business based on the value of the asset, which you’ll then pay back in monthly instalments, plus interest.
Because your vehicle or equipment is used as collateral, it can be easier to be approved for asset refinancing than for other loans – but this always depends on your business’ individual circumstances and credit rating. And be careful – if you don’t keep up repayments, the lender can repossess your assets.
Another of the biggest finance challenges hauliers face is cashflow. Invoice finance, a way to raise capital on your business’ unpaid invoices, is one solution.
Rather than waiting months for your invoices to be repaid, you can go to an invoice finance provider who’ll lend you an advance based on those invoices. You’ll get 85-90% of the value up front, and the lender will charge a one-time arrangement fee, a monthly fee, and a charge based on the amount of funding they advanced. Getting the money up front means you don’t have to put your business on hold while you wait to be repaid, so it’s a good way to solve problems with cashflow.
Depending on what type of invoice finance you choose, either you or the lender will be responsible for collecting payment. The former, called invoice discounting, means you can keep up your personal relationship with your clients, while the latter, invoice factoring, means you don’t have to spend time chasing payment – It’s up to you to decide which method suits your business best.
At Gibson Hewitt we know how difficult and time consuming looking for business finance can be. Contact us for help navigating the fast evolving business finance landscape and to find out how you can secure business finance to help grow your business.
Our knowledge of the business finance market is powered by the Rangewell platform which helps professional advisors and their clients find, compare and apply for business finance. The Rangewell platform is fully independent, free to use and has mapped thousands of business finance products from over 265 business lenders in the UK across every single type of business finance.
The Rangewell platform is only available via professional advisors and only recommends business finance products to limited companies borrowing for business related purposes.