Haulage in the UK is a huge industry, with 77% of all UK freight goods moved by road, it has been a very profitable industry to be in. However, the costs to run a haulage business, grow or even start up a new haulage company are daunting, which is why the haulage industry is really feeling the effects of the current economic climate at present.
Acquiring the vehicles, transport yard and property to start off with is tough financially, add to that the spiralling cost of fuel and you have a handful of challenges that could just mean that you’re looking for the best advice around finance for haulage business out there and that’s where we can help.
At PMD, we understand the challenges faced by the haulage industry and we will aim to work with you to source haulage finance options that will ensure your business can grow without limits.
What challenges are facing the haulage industry in 2023?
Let’s look at some of the challenges that haulage companies are set to face in 2023 and the ways in which finance for haulage can help:
- Rising fuel costs due to increasing inflation and supply being affected by the war between Russia and Ukraine means that covering the cost of the vast amount of fuel that haulage companies need, is a huge financial drain.
- Competition from hauliers in Europe who can operate at lower rates and keep their prices down means that businesses will look overseas for their haulage needs.
- Finding time to plan backloads to make business more efficient, aiming to cut down on unnecessary fuel use and additional trips and increasing vehicle and driver utilisation.
- Keeping up with supplier payments, mortgage and lease payments and wages and fuel costs when your customer payments are generally not set in stone and arrive at varying times throughout the month.
- Dealing with fixed cost rates across your vehicles and lease or mortgage payments for your transport yard.
Haulage finance options that can help with your business challenges.
While there are many challenges ahead in business in general, not just for haulage companies in the UK, the good news is that there are many options of finance for haulage companies that could really help ease the financial burden, cash flow issues, and any other challenges 2023 brings with it. Let’s look at some of the options of finance for haulage companies, including packages for both new and approved used vehicles:
How Asset Finance for haulage companies can be beneficial.
Asset finance is a funding option which can be used to grow, by acquiring much-needed commercial vehicles, trailers and equipment without having to pay upfront. Instead of waiting until all funds needed are available and buying the asset straight out, you will pay a regular amount to use the asset over an agreed period, avoiding the full cost of buying outright.
To help tackle the increasing fuel prices, costs of acquiring and operating vehicles and the inevitable maintenance expenditure can make it difficult to keep a healthy cash flow, however, that’s where asset finance can help you to spread the cost and repay the lender while your vehicle is already working for your business.
There are several Asset Finance options available to the haulage sector:
- Hire Purchase – a haulage finance option whereby you pay for commercial vehicles, trailers and equipment over a set period of time, usually 5 years. Paying over time is a massive benefit to hauliers’ cash flow. Title passes automatically once all payments are made.
- Lease Finance – possibly the most flexible asset finance option, as it allows you to acquire new vehicles and upgrade them much more frequently. VAT is paid monthly rather than in advance, another cash flow benefit.
- Contract Hire – this option of haulage finance allows to you acquire a vehicle while the finance company still owns the vehicle and hires it to you. The benefits are that you acquire the latest vehicles and avoid risks and associated costs to vehicle ownership such as deprivation value and maintenance expense.
Invoice finance for haulage companies.
Invoice financing can be a hugely beneficial form of finance within the haulage industry, as it helps to maintain a healthy cash flow by bridging the gap between the point at which you make a sale and the time the payment is received from the debtor.
The business will pay a small percentage of the invoice amount to the lender as a fee for borrowing the money, however, nothing needs to be repaid to the funder as they only collect their money from your debtors when the debtors pay their invoices. It’s a quick and simple application process meaning that once your application is agreed you can expect to reap the benefits within 24 hours.
Businesses in the haulage industry are eligible for invoice finance as they regularly invoice for work, and it means that you will have immediate access to cash without a loan, you’re able to support your business through challenging times and even support business growth. It is also a funding option that offers no risk to your assets.
Types of business loans that could be useful finance for haulage companies.
A business loan could be a good solution for your haulage company to explore as it is a sum of money offered to the haulage business owner exclusively for their use, within the business and is repaid, with interest, over a set amount of time. One of the benefits of a business loan is that the borrowing amount can range from £1,000 to several million pounds. Some of the loan solutions that can help through financial challenges are:
- Unsecured business loans
- Secured business loans
- Working capital finance
- Short-term business loans
How PMD can help find the perfect haulage finance options for your business.
At PMD, we believe that whatever challenges 2023 brings, your haulage business should not stall simply because of the rise of fuel costs and the high upfront costs of commercial vehicles, trailers, equipment and machinery to keep up to date with the competition.
We work with over 150 lenders which enables us to open several flexible, independent and competitive funding lines to drive your business forward. PMD take the hard work out of securing haulage finance, liaising with funders on your behalf to ensure the best possible terms are secured, leaving you free to focus on running your business.
PMD can source facilities for almost any business asset and structure these with nil deposits, VAT deferrals and extended terms to meet your cash flow.
If you’re considering finance for your haulage business, get in touch today to see how PMD can help.