Family Transport Business Avoids Business Failure
Managing a small family business can mean that you get little time to yourself and sometimes you just have to trust (or hope) that employees will keep things running smoothly. When that doesn’t happen, it can be very expensive.
The Scenario
A family business owned 2 long haul truck and trailer combinations, Dad drove one and Son drove the other. Business was good, so good they had purchased a brand-new Rig which all up cost over $300,000
Unfortunately,t he family had to attend an important event, so they employed a driver to do the days work and to do the deliveries in the new Rig. Unfortunately, the driver had a serious accident and wrote off the new Rig.
Whilst the driver was uninjured and the insurance company agreed to pay out, the administration involved in getting the claim processed was lengthy, several months in fact. This meant that the business only had one truck producing income but had to keep up the payments on 2 Rigs at the same time.
In order to keep the business a float, this meant the family was forced to increase the mortgage their house and max out all their credit cards. They were in that much financial distress that when the new truck arrived, the business simply could not afford to fuel the trucks.
What They Did Next
At this point, the business contacted Nova Cash Flow Finance, in urgent need of assistance and on the verge of giving up, walking away from the business and losing their home.
Nova noted that had over $80,000 of receivables, unpaid sales invoice for work they had completed. The business submitted an application and Nova had a factoring facility in place within a week of initial inquiry. This facility allowed 80% of the business’ receivables (over $80,000) to be made available for use, allowing the fuel bill to be paid and creditor payments to be made. They were able to pay down some of the credit cards and get the house mortgage back in order.
Result
Due to the quick access to cash that Nova provided, this family was able to continue operating their business and their family home was no longer at risk of foreclosure. Without the facility provided by Nova, this company may not have been able to find its feet quickly enough to ride out the wave.
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