Invoice Finance facility helps new-start courier business to grow
A Buckinghamshire-based start-up business is set to move into new premises and employ more staff after securing a factoring facility from Lloyds TSB Commercial Finance.
Established by a husband and wife team at the couple’s home in High Wycombe, Parcel Post Depot is a global courier firm which delivers packages to local businesses and consumers, from manufacturing through to distribution companies.
After running a limousine hire firm for five years, Shirin Kahn decided to set up Parcel Post Depot to offset the seasonal peaks she experienced in the occasion car hire sector.
The business enjoyed a higher level of demand than expected after just four months trading and found they needed to inject more capital.
In order to free up cash flow and enable the company to capitalise on new contracts, it approached Lloyds TSB Commercial Finance which provided a factoring facility. This leverages the value of the firm’s sales ledger and bridges the gap between issuing invoices and receiving payments.
Factoring is also well suited to fledging businesses as it has the additional function of managing a firm’s debtor book by sending statements and reminder notices on management’s behalf.
Parcel Post Depot can now expand in line with sales and has begun implementing its growth strategy, which includes moving to larger premises at Cressex Industrial Estate and employing two new members of staff.
Shirin Kahn, managing director, Parcel Post Depot, said: “We had no illusions when setting up Parcel Post Depot that we were entering a very competitive market, but we pride ourselves on excellent customer service and personal touches which has ensured we have secured a high number of contracts in our first few months.
“In fact we enjoyed more new orders than anticipated but found that our working cash flow became stretched.
“Factoring has been ideal for us as it means we don’t have to worry about a 30 or 60 day wait for payment as the facility quickly injects funds into our business and allows us to access working capital almost immediately. Without it we would not have been able to enjoy a successful four months of trading.”
Ben Leighton, regional manager at Lloyds TSB Commercial Finance, said: “Throughout the recession, courier businesses have been fairly resilient, which is largely a result of the increased popularity of internet shopping and the logistic requirements this creates.
“As the economy improves, now is the time for firms like Parcel Post Depot to capitalise on these opportunities and factoring is proving increasingly popular with growing business as the more success a firm experiences, the more funds can be released to pursue expansion opportunities.”
September 2010