From a start-up business with just two trucks, two brothers have taken their transport business to a 77-truck concern, turning over nearly $19 million a year.

The company believes adopting debtor finance was one of the best moves is has made.

“Our first feeling was apprehension – are we doing the right thing? That was very quickly replaced with the feeling – why haven’t we been doing this for years,” the company’s director said.

“Today we turn over about $19 million a year and have a good spread of clients including some very large customers such as Toll Group.”

In 2004 the company started to expand rapidly and juggling cash flow was proving a nightmare. The firm employs 110 people, including outsourced labour hire. It had weekly outgoings of about $300,000, including payroll and fuel, but often had to wait 30 to 60 days for payment from customers. Funding this lag was strangling growth.

It was through a chance meeting with their current provider that the company was introduced to the concept of debtor finance.

“We were experiencing fairly strong growth at the time. We were basically getting extra work contracts come our way which meant we had to purchase additional equipment. It is very hard when you are being offered work to turn it down. There is always the possibility that you open the door for other contractors and that is really a door you do not want to open.

“We saw the advantages of debtor finance in supporting our growth. Whether you are growing organically or through acquisitions, it is still an up-front expense. By bringing our cash flow forward, we were able to take on the additional work.”

Transport as an industry lends itself to debtor finance in a number of ways.

“The thing is, in the transport game, you always have freight that is time sensitive. Time-sensitive freight has to be carried by equipment that is reliable and unless you have the ability within your cash flow to keep turning over your equipment, it will fail and that places your contracts in jeopardy.

“The acquisition of new equipment is not the main reason you use debtor finance. You have to be able to afford the new equipment straight away but you won’t receive income from the equipment straight away. Debtor finance allows you to grow your business without suffering that initial heartache.”