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A husband and wife team in Sheffield are ‘forging ahead’ with the growth of Kielder, their business specializing in car power tools, and are finding a way to manage their cash flow thanks to a ‘groundbreaking’ invoice financing facility. from Optimum Finance.

The challenge was paying vendors and staff while waiting for some of the major resellers to pay themselves. Invoice Finance, which uses accounts receivable (invoices) as the main asset against which money can be raised, was said to be “the solution”.

Optimum Finance pays Kielder an agreed percentage of the invoice value as soon as it is submitted, enabling access to liquidity at invoice time rather than waiting.

Mo Han, Co-Founder and Purchasing Director of Kielder, commented, “Optimum advances 85% of the invoice value and that helps us not only pay our own people and key suppliers, but also allows us to offer discounts on orders. wholesale. to our key customers.

“With some of our clients requiring 60-day payment terms, it allows us to close the cash flow gap and do it with what is effectively our own money. What is especially nice about this is that as we grow, the amount of cash available to us also grows, and this will help us expand.”

The company was founded seven years ago to deliver high-precision tools to the automotive market. Mo’s husband Steve, a former rally driver, saw a gap in the market that he felt was not being adequately addressed.

So it set to work designing its own range of power tools and associated products for professional mechanics, in close collaboration with its Chinese partners. The result is a range of tools sold through specialist retailers and direct to the motoring industry.

Mo was already familiar with Invoice Finance, having previously used a similar service provided by its main banking partner. However, a change in financing policy forced her to look for alternatives.

She continued: “It was a concentration problem. Unfortunately, they reduced our accessibility to cash. The lack of cash restricted our growth and impacted our margin and profitability. It wasn’t sustainable, so we looked elsewhere. Optimum Finance was transparent in its pricing and offered good value.”

Mo concluded: “We want to be known as the ‘go to’ in this space, and build a brand known for the innovation, quality and design of its tools. Having Invoice Finance to support our cash flow helps me sleep at night.”

By Matthew Neville, Senior Correspondent, Bdaily

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