Set to double projected annual turnover in the first year of trading with a Factoring facility

Founded in June 2009, The Parts Department supplies the aggregate and recycling industries with replacement parts for jaw, cone and impact crushers, heavy duty machinery which compresses rock into gravel suitable for concrete and other building materials.
 
The firm ships its products all over the world, including Russia and the USA.

In order to build up stock levels and capitalise on increasing demand, the business approached Lloyds TSB Commercial Finance which provided a £150,000 factoring package. The facility leverages the value of the firm’s sales ledger, boosting cash flow and bridging the gap between issuing invoices and receiving payments from overseas.

The Parts Department wanted full ledger credit control to free up management resources and concentrate on expanding the business, and the facility has the additional function of managing the firm’s debtor book by issuing statements and reminder notices on management’s behalf.

Erica Beeson, accountant to the managing director Noel McCloskey, said: “Despite setting up only a year ago in the middle of a recession, we have already smashed our projected turnover figures and we are doubling income month on month.

“We required a funding package to ease the pressure this success put on our cash flow and allow us to build up a strong stockpile of parts in our Coalville warehouse. We’re also using the facility for credit control and to manage our outstanding invoices.

“Since utilising the factoring facility we have found we now have much more time to focus on our ongoing expansion strategy. We are currently in the process of employing two more people and feel positive about our growth plans for the rest of 2010.”

Geoff Webster, regional manager for Lloyds TSB Commercial Finance, said: “Each £1 invested in construction generates over £2.50 of activity, therefore the industry, which includes the aggregate sector, is vital to economic recovery. In particular, following the harsh winter, sales of gravel and asphalt have risen as roads were repaired and built.

“Factoring is an ideal tool for young businesses like The Parts Department, as the lending facility is based on the strength of a firm’s current sales, it does not require a company to have been trading long enough to have produced their first set of accounts.

“The facility also grows in line with sales and as a result, The Parts Department is in a strong position for future growth.”

July 2010