Logistical Challenge

9th December 2015

Logistics BusinessLogistical Challenge

The logistics sector faces a unique collection of challenges, many of which require a greater depth of service than what is offered by traditional banks. As an asset-heavy industry, highly dependent on continued investment in both fleet and warehousing, large amounts of committed growth and working capital are essential.

Some firms in the industry catering to the supply chain of specific wholesale and retail channels also have high seasonal spikes in supply and demand that lead to highly variable cash inflows and outflows during the course of the year.

Any business that requires the movement of physical goods has to have first-class logistics as on-time delivery is linked directly to the P&L of their customers. As a funder both of pure logistics businesses as well as sector-specific distributors , we have to ensure that the logistics element is supported by genuinely flexible financing, which traditional banks often can’t provide.

Our recent deals in the sector include acquisition and working capital financing involving prominent logistics names including Palletforce, NFT and – in the wine and spirits distribution industry – Enotria and Coe Vintners.

Each transaction was different, but common to each was an understanding that the business involved needed more than the traditional term loan based on inflexible repayments and a final maturity date. Our packages are based on prospects for growth rather than just existing balance sheets, and a realistic assumption about cashflows.