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Factoring is a powerful financial product that has fueled the growth and success of a number of logistic companies in the UK. A logistics company using factoring will enable it to capitalise on their unpaid receivables by selling them to a factoring company for immediate payment.

In a logistics company cash the most important factor. The success of the logistic company or logistics companies is based on the promptness with which the products can be delivered to a particular destination or to a client. The cashflow of logistics companies in the UK is affected by the following factors:

  • Competition from low priced Warehouse Management Systems (WMS) has emerged.
  • Sudden unexpected surges in demand.
  • Most logistics companies customers have tangible assets and strong financials.
  • Long payment terms with key suppliers.
  • Customers taking too long to pay.
  • Long delays in order fulfillment disputes are costly and prevent timely payments.

Factoring is widely adopted in the logistics sector to improve cash flows.

With factoring logistics companies immediately get paid for their invoiced work from the factoring finance company, while the factoring company waits to be paid by the logistics company’s’ customers.

Factoring is advantageous to business operating in the logistics sector because of the they deal primarily with businesses with financially strong customers such as transportation companies, distributors, wholesalers, manufacturers, technology companies and others[/vc_column_text][vc_column_text]

Main advantages of factoring for logistics companies

  • Factoring allows a logistics company’s to increase cash flow
  • A logistic company using a factoring facility allows the logistics company to strengthen customer relationships and concentrate on the core business instead of debt collecting.
  • Factoring in the logistics sector gives a company a new layer of credit management

Get an invoice finance quote today by calling 0800 597 4757 or apply online to compare factoring companies