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.
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.
Regrettably, the family had to attend an important event, so they employed a driver to complete the deliveries in the new rig. Sadly, the driver had a serious accident and wrote off the new rig.
Whilst the driver was uninjured and the insurance company agreed to payout, the administration involved in getting the claim processed took several months. This meant that the business only had one truck producing income but had to keep up the payments on two rigs at the same time.
In order to keep the business afloat, the family was forced to increase the mortgage on their house and max out all their credit cards. They were in so much financial distress that when the new truck arrived, the business simply could not afford to fuel the trucks.
At this point, the business contacted Nova Cash Flow Finance, in urgent need of assistance and on the verge of losing their home. Nova noted that had over $80,000 of receivables, in the form of unpaid sales invoices 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’s receivables (over $80,000) to be made available for use. This meant that they were able to fuel trucks, pay down some of the credit cards, and get the home loan back in order.
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.