Actually in transport money buys the fuel that keeps the wheels turning on the routes.
Our transport client had several pitfalls in their business model that, whilst a great model, was not great in keeping steady cashflow.
Their biggest cost was fuel, but lack of available cash meant they couldn’t take advantage of bulk discounts.
They had great clients, well established large business customers, who paid on 60+ days. Unfortunately their drivers were paid weekly, and most other bills monthly, including the RUC that keeps the vehicles legally on the road.
The majority of their customers were also in the primary industries adding a headache of seasonality to the cash flow through the business.
Seasonality and longer paying customers meant the Bank couldn’t see the overall picture and could only experience the tight cash flow requirements and felt the business was running out of time, potentially to mis management. Too many temporary requests for funding and not enough financial information to meet the Banks credit requirements.
Geneva Capital met with the client and worked very hard to understand the business and also the Banks position. Together we worked through a plan that could stabilize them and see them back into Bank funding eventually.
By funding their entire ledger Geneva capital immediately generated enough cash to clear outstanding creditors and also to start the bulk fuel discount process (which only creates better profit levels).
Continuing to fund within 24 hours of invoices being issued, Geneva Capital could then help our client have enough funding for weekly wages and those monthly bills without the need to keep asking a lender for help.
Working with our client and gaining an understanding of the seasonality Geneva Capital could also be flexible on fees and timing to ensure that low fees were charged in low season and this was made up proportionately in high season, again reducing stress on our clients cashflow.
In short they were up and trucking……….