Factoring provides environmentally-friendly cleaning business with the cashflow to grow
An environmentally-friendly cleaning business is set to double turnover to £6 million by the end of 2012 after securing a factoring facility from Lloyds TSB Commercial Finance.
GreenZone Cleaning and Support Services was established in March 2010 by Steve Trew, John Walker and Nicky Trew who between them had in excess of 50 years’ experience in the contract cleaning market. After significant research and investigation the team identified a gap in service delivery for a truly “green” and sustainable service. The firm now employs around 300 full and part-time staff.
Serving commercial businesses, residential properties and management agents in the City, West End and Greater London, the business uses only environmentally-friendly products, processes and vehicles. Even its office in Battersea is equipped with recycled furniture.
Since starting up, GreenZone has operated with a Directors Loan account and an overdraft facility in place. However, due to its rapid growth, the business required a cashflow facility to bridge the timing gap between paying its staff and receiving money from clients.
After significant research, and competitive market analysis, GreenZone appointed the asset based finance provider Lloyds TSB Commercial Finance, which supplied the business with a factoring facility to free-up cashflow. Based on the firm’s issued invoices, it grows in-line with sales and provides liquidity to invest in growth.
This has allowed the business to continue its rapid expansion and take on new contracts, without liquidity being tied up in overheads and staff wages.
As a result of the funding, the business is now on track to double turnover by the end of 2012, with revenue forecast to reach £15 million in the next five years.
Dan Sadler, Partner at GreenZone, said: “We started the business because the team is highly committed to sustainability and service delivery, and we identified that the market wasn’t being offered a truly environmentally sustainable service.
“We are the industry leaders and innovators, and this is backed up by a significant range of endorsements that are unique in our industry, such as The Mayor of London's Green Procurement Code and the Green Achiever accreditation.
“We were one of the first companies to exclusively use a range of revolutionary cleaning products, in conjunction with the latest technologies, such as ionised water cleaning, which requires no chemicals whatsoever, and we are constantly working to develop new ways to be environmentally friendly. For example, we are currently looking into organic and highly sustainable hemp uniforms for our staff.
“Since establishing the business, we have found demand for our services has remained consistently high. Whilst capitalising on this, we found cashflow was stretched as around 70 per cent of day-to-day liquidity is spent on staff wages, before we receive payment from customers.
“This funding has allowed us to put in place a strong expansion strategy for the future, whilst taking on an increased number of customers.”
Paul Spratley, Regional Manager, Lloyds TSB Commercial Finance, said: “People talk about the green premium and paying extra for environmentally friendly services, therefore it is refreshing to see GreenZone providing a quality service at competitive prices.
“Sustainability is more than just a buzz word - it’s the future and with the help of our factoring facility, the business is in an excellent position for the future.”
August 2011