Wednesday, 6th June 2012
Cut us a brake road haulage industry tells exchequer
While the increased focus on growing our export base is to be welcomed, operators in the road haulage industry may not survive without a much-needed injection of liquidity in the market warned Adrian Madden, Close Brothers Commercial Finance Ireland.
The road haulage industry contributes over €1 billion to the general exchequer and receives no financial assistance from the Government.
Mr. Madden, who heads up the Irish asset finance arm of UK FTSE 250, specialist financial services group Close Brothers Plc, was speaking today at the launch of the company's first White Paper designed to assist the road haulage industry as it seeks to drive forward the economic recovery.
'Keeping the wheels turning' was produced in association with the Irish Road Haulage Association, the national representative body of the licensed road haulage industry in the Republic of Ireland.
Adrian Madden, Close Brothers Commercial Finance, "Driving forward growth and economic recovery will not take place without increasing our export base. 95% of Irish freight and 90% of our manufacturing output is moved by the road haulage industry. The sector has worked hard to become more competitive, absorbing the increasing costs fromroad taxes and fuel increases – but this cannot be sustained.
"The crippling effect on their cash flow is threatening to put many companies out of business and that is exactly why we have partnered with the IRHA to raise awareness of what government needs to be doing, but also to enable companies to access the vital funds they need."
Eoin Gavin, IRHA President said, "The IRHA is calling on the government to support the road haulage industry through the implementation of an essential user fuel rebate which could be of critical importance to the survival of the industry and the countless direct and indirect jobs associated with the industry.
The IRHA estimates that the sector contributions over €1 billion to the general exchequer each year via fuel duty, road tax, PAYE and PRSI all without any financial assistance from the Government. The sector is in fact a net contributor to the State."
Close Brothers Commercial Finance offers both invoice and asset finance. Asset based lending is outperforming other major forms of business lending as both clients and lenders recognise its inherent strengths in unpredictable economic times.
Both asset and invoice finance can be used alone or alongside other types of traditional funding options.
Asset finance is one of the fastest growing funding options in the market. In contrast to loans and overdrafts, our suite of products allows you to put the asset straight to work and keep your working capital intact. It comes in several guises: hire purchase, leasing and asset refinancing.
Hire purchase gives companies eventual ownership of the asset at the end of the repayment term allowing them to spread the cost of their equipment, plant or machinery through manageable installments ensuring cash flow is maintained.
Leasing allows businesses the full use and benefits of an asset but without the potential burdens of ownership as this rests with the funder.
Asset refinance releases the value of your assess and can be used to ease the cash flow burden. In essence the lender buys the asset from the business at a percentage of its value and refinances it back over an agreed period.
"Increasingly the most successful and entrepreneurial are switching to invoice finance as a way of freeing up the cash they need to drive their business forward. The process is relatively simple and is based on freeing cash from what is usually the company's biggest asset – the money it is owed by its customers – invoices," added Mr Madden.
Funding a client is based upon the health of the business and not a credit rating like an overdraft would be so essentially it aligns itself with the turnover of the business.
It particularly suits businesses that make a product or provide a service for which it thenraises an invoice. It closes that 60 to 90-day gap between raising the invoice and being paid. It's also designed to provide working capital, not buy fixed assets.
The IRHA is the recognised national representative body of the licensed road haulage industry in the Republic of Ireland. The IRHA was founded in 1973 with the purpose of promoting professionalism, excellence and safety in road transport.
Close Brothers Commercial Finance is a leading provider of asset and invoice finance for both SMEs and large businesses across Ireland. Close Brothers is a specialist financial services group which makes loans, trades securities and provides advice and investment management solutions to a wide range of clients.
Close Brothers was established in 1878 and today employs over 2,500 people, principally in the UK. Close Brothers Group plc is listed on the London Stock Exchange and is a member of the FTSE 250. You can therefore be assured that we are soundly funded and able to support your business needs.
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