Transport and logistics is an ever-changing industry, especially now as we sit on the cusp between the current dominance of traditional vehicles (fuelled by petrol or diesel, driven by a human) and new technologies that could potentially transform the norms (electric and self-driven).
Here we look at the different forms of alternative financing available for businesses in the transport and logistics industry, exploring how they can keep you up to speed with developments and help you to put plans in place to ensure future success for your organisation.
Asset finance.
Transport and logistics is an industry where relatively expensive equipment purchases are part and parcel of operations, and keeping your fleet up to date is vital. Especially with the advent of newer alternative technologies; even if these don’t have the transformative effect some predict, they will still lead to more efficiency and reduced fuel costs.
Asset finance packages are highly suited to large investments, and are calculated primarily on the value and term of the asset(s) you are planning to buy. This allows an organisation to split the cost of an asset into manageable monthly repayments, meaning you can expand and stay up to date with the industry, while also making sure your finances remain workable.
Small business loans.
These are loans specially designed for newer businesses who may have a less demonstrable trading history or a less than perfect credit history due to their relative youth. They take into account your future ambitions, as well as your previous performance.
This finance solution may be right for you if your organisation has big ambitions but needs cash to get the ball rolling, perhaps to take advantage of an exciting opportunity, or to provide a quick stopgap of working capital. Benefits include low rates, no hidden fees, and flexibility in how they can be used, but applications can be time-consuming from some lenders. (Note: small business usually refers to those with annual turnover below £6.5m and 50 employees or fewer.)
Unsecured loans.
Ideal if you need a cash injection, but lack collateral and don’t want to give up equity. The benefits of this type of loan are similar to small business loans (low rates, no hidden fees, flexibility), but there are no restrictions on the age or turnover of the business.
The decision on whether to lend is based on the creditworthiness of the borrower, which means such loans are usually suitable for businesses with good credit histories. Access Commercial Finance specialises in finding finance solutions that other lenders may not consider, so if you’re unsure whether an unsecured loan would be suitable for your business, give us a call.
Invoice finance.
This finance solution is ideal for businesses that want to bring their cash flow in line with their current sales ledger. Cash is raised against existing invoices to maintain cash flow and enable fast business growth. Internal capacity can also be freed up to allow you more resource to allocate to growing your business, as the lender can act as credit control to chase the outstanding invoices.
This solution is suitable for the transport and logistics industry because lenders prefer to buy invoices from commercial customers, rather than public ones. It is also a preferred solution for industries with long repayment terms.
As with any industry, there is no one-size-fits-all finance solution for businesses operation within transport and logistics. At Access Commercial Finance we are confident in our ability to reach a solution that works for your business, and your unique needs. If you already know what type of finance you’re looking for, or if you’d like to learn more about the options available to you, give us a call. We will be happy to put our years of experience to good use.
