Factoring facility allows Courier Company to expand and increase turnover
A Leeds-based specialist courier firm KJM (UK) Ltd, is set to relocate to a larger warehouse in the city and expand across the UK, after securing a five figure factoring facility from Lloyds TSB Commercial Finance.
Set up in 2007, the business, previously known as KJM Couriers, employs seven people and is based at the Emmanuel Trading Estate. The firm offers same-day delivery, technical courier, storage and logistics services to a number of varied clients, particularly those in the IT industry.
KJM currently operates in Leeds from a 6,000 square foot warehouse, but as demand for its services exceeded initial expectations, management required a cash flow facility to provide the capital needed to fund its expansion.
The firm approached its financial advisor, J.G Associates which introduced the business to Lloyds TSB Commercial Finance, the invoice finance division of Lloyds Banking Group.
The funder provided KJM with a £150,000 factoring facility which leverages the value of the firm’s sales ledger, boosting cash flow.
The funding package has allowed the company to move into a 9,000 square foot warehouse in Leeds, which it is due to move into in September, as well as new premises in Trafford Park, Manchester.
KJM is also looking to open additional branches in Birmingham and London over the next two years and is now on track to double its turnover during the February 2012 accounting year.
Mike Dawson, co-director of KJM, said: “Over the past four years, business has snowballed – we’ve gone from having 20 vans to in excess of 60. This has enabled us to keep up with the changing requirements of our customers and we now offer storage, delivery and installation to our diverse range of clients, some of which are amongst the largest IT service providers in the country.
“In order to keep up with demand, we needed a cash flow boost and the factoring facility from Lloyds TSB Commercial Finance is perfect as the facility releases cash tied up in invoices. We are experiencing high demand and so the more we bill, the more cash is made available to push forward our expansion strategy.
“Now we are set to move to larger premises in Leeds, have already opened an additional branch in Manchester and, in the long term, plan to open new facilities in the Midlands and London. Without Lloyds TSB Commercial Finance’s support we would find it difficult to do any of this.”
Peter Bould, regional manager at Lloyds TSB Commercial Finance, said: “The IT service industry has weathered the recession reasonably well, as demand for outsourced services has risen as businesses look to create efficiencies. KJM are an excellent example of how to capitalise on growth opportunities in the economic downturn.
“The factoring facility is ideal for firms looking to expand as it grows in line with sales and as a result, KJM is in a strong position to implement its development strategy, which could create a minimum of 10 further jobs across the country.”
Richard Frost, senior associate, at J.G Associates, said: “I have introduced numerous clients to Lloyds TSB Commercial Finance in the past and after liaising with Mike and the team, I recognised that an invoice finance facility, such as factoring, would be ideal to meet the business’ funding requirements.”
September 2010