Poor Cash Flow Limits Hauliers’ HGV Purchasing Plan

A fifth of transport firms in the UK say that their cash flow is dictating that they are running older vehicles for longer, rather than purchasing new HGVs.  A further 19% have indicated that the cost of purchasing and running new Euro VI trucks is the prohibiting factor in their HGV purchasing plans.

The figures come from the latest Close Brothers Business Barometer, an independent quarterly survey of small and medium sized businesses owners and senior managers from a variety of sectors across the UK.

John Fawcett, Managing Director of the Transport Division at Close Brothers Asset Finance said: “Haulage and freight companies feel the strain on cash flow more than most. Things like high fuel prices, taxes and legislation such as Euro VI create a huge burden, not to mention the competition UK firms face from other, overseas organisations.

“It’s not hard to understand why finding the funds to support HGV purchasing, whether it’s a single vehicle or a fleet, is putting operators under serious pressure.”

The survey also revealed that half of transport firms plan to raise finance to support business growth in the next 12 months. Of that figure, 30% say that they’re worried their bank will turn down their request for additional funding.  An additional 17% said they have had a funding request refused in the past six months.

“My message to transport operators is very clear; you must be strategic about raising finance, it’s all about looking in the right places,” added John.

“Many companies struggle with cash flow but they often have equity in their equipment and that’s the place to start when thinking about raising money. Asset finance, which includes Sale and HP Back, leasing and refinance, is specifically designed to unlock the value of existing and unencumbered assets to provide a cash boost.  To put it simply, we can lend against the equity in existing assets to help you to fund new ones and put them to work straight away. It’s a sensible and sustainable option that enables hauliers to put their purchasing plans in motion without increasing the strain on cash flow.”

For more news from Close Brothers Asset Finance please visit www.closeassetfinance.co.uk