Need a little advice

UK PROFESSIONAL DRIVERS FORUMS OWNER AND FLEET OPERATORS FORUM (INTERACTIVE)
1

About 10 years ago I used to work for a mate who had a small fleet. At the time he offered me the chance to run my own on the contract he was on with his fuelcard and O licence. Sadly, I couldn’t take him up on what has to have been the best way to get into O/D…

Move forward 10 years. My mate is out of haulage and I’ve hit a brick wall as a self employed driver as basically the companies with the work want insurance I can’t get. What was interesting is when I contacted one company I used to drive for on agency and offered my services as a S/E driver, he wanted to know what unit I had. Now this got me thinking as the contract was for a market leading builders merchants and I’d be pulling their trailers.

So to cut to the chase…

I’ve had a look at the table of costs of running motors, the amount of finance I need available for one unit for my O licence and I’m pretty sure I can talk my mate into being the TM and providing the supporting CPC whilst I take mine. Finding work on general haulage for shipping companies won’t be too difficult I think as my mate was quite well known, being somewhat of a colourful character, and people remember me now even 10 years later because I have a wierd name. So in all of that respect I think I’m sorted.

BUT…I need to get finance to cover running costs for 3 months from the bank. I reckon about £10,000 to cover leasing, fuel (working on 2000km a week), trailer rental, insurance and a basic wage? To do that I need to show the costs which is easy but also that I have work available and the rates I’ll be earning. From talking to my mate, the banks want it in writing. HOW THE HELL DO I GET THOSE? When you contact them, you get the “we’ll give you plenty of work” although they’re a bit coy about rates, but can you get them to put that in writing? Not a chance.

So how did people in here convince a bank to part with money?

I supose I could remortgage the house as I have about £65k equity and only £19k left on the mortgage so a £30k mortgage wouldn’t be too expensive.

Money eh? Flipping spanner in the works for most things.

2

you woundnt go to a shop and buy food if they wont tell you the price until you check out when its too late.if a company wont tell you the rate they pay steer clear.they could have you running up and down all week for 00.1p per mile.by the time they pay you 30,60,90 days its too late house gone,fuel companies taking you to court etc.all good transport compaines will tell you the rates they pay.

3

These were companies my mate used to haul for in the mid 90’s who were paying for example, £120 for a load of paper reels from Hull to Leeds area.

I used to know what alot of them paid back then but you can’t find out what they pay now.

What is classed as a decent rate nowadays on general? Like I said, it’s been a decade since I took any interest in it from a OD perspective.

4

Conor:
I used to know what alot of them paid back then but you can’t find out what they pay now.

The least they possibly can, you think you’ve got a load at a decent rate, then the low life tell you its been cancelled, when the truth is they’ve given the job to someone else who’s priced the job up for £10 less.

5

Conor:
BUT…I need to get finance to cover running costs for 3 months from the bank. I reckon about £10,000 to cover leasing, fuel (working on 2000km a week), trailer rental, insurance and a basic wage?

Firstly do not work for anyone on 90 days when first starting up (or at all imo)

Secondly £10,000 is way too low for 3 months you’re gonna be looking at around £10 - 12 grand just for the fuel ,Trailer rental is gonna be at least £1200 depending on type of trailer,Insurance if paid in instalments is gonna be in the region of £1300 (again depending on type of work) & leasing is gonna be in the region of £3000 (@ £250 p/w)

So thats ££15,500 before you take any money in wages

Conor:
To do that I need to show the costs which is easy but also that I have work available and the rates I’ll be earning. From talking to my mate, the banks want it in writing. HOW THE HELL DO I GET THOSE? When you contact them, you get the “we’ll give you plenty of work” although they’re a bit coy about rates, but can you get them to put that in writing? Not a chance.

Then avoid them like the plague.If they are too embarassed to tell you the rate then it ain’t worth working for (especially over 90 days)

Conor:
So how did people in here convince a bank to part with money?

Cant help you there I used the bank of Ma’s inheritance :wink:

Conor:
I supose I could remortgage the house as I have about £65k equity and only £19k left on the mortgage so a £30k mortgage wouldn’t be too expensive.

Money eh? Flipping spanner in the works for most things.

I’d think extremely carefully before I put my home on the line at the very minimum I’d want

A written agreement on the payment terms from the company

The rate for the work in writing

A financial background check on the company I’d be contracting to

And if possible a fixed term for the contract ie 3/5 years (not easy this one :wink: )

6

i’d agree with all the above, 90 days is a big no no for an o/d even sixty days takes some covering if you start from scratch and theres a hell of a lot of trust involved, even then, but how you’ve got to look at it is this, these firms that use regular subbies do it for one reason and one reason only, thats cus they make money out of em, so don’t be afraid to say it like it is, if it’s sixty days tell em you’ll struggle to cover it until you get on top of the job, ask if it’s possible to get a part payment after the first month to see you through? if theres no bover with money then that shouldn’t be a problem or alternatively take something on that pays quicker of which theres plenty about, six moths down the line you’ve stood all the expense of setting up and then it’s a lot easier to move on to something else.
my personal advise would be, forget any sort of finance on a unit until you know your suited to it, not everyone’s cut out to be self employed and you can buy a hell of a lot of truck for 7-8 grand, not something that you’ll run for the next five years but something to get you going.
as for banks? if you can get some big money like 20 or 30 k out of em you’ll have got more than me in twenty four years of being self employed! i think after a time everyone starts to see their bank as a necessary evil, they’ll take your money at every opportunity but ask for something back? thats a different story.
good luck.

7

paul b:
as for banks? if you can get some big money like 20 or 30 k out of em you’ll have got more than me in twenty four years of being self employed! i think after a time everyone starts to see their bank as a necessary evil, they’ll take your money at every opportunity but ask for something back? thats a different story.
good luck.

Do you really think that would be the answer from the banks, or have you been in the position that they’ve said ‘no’■■ That being the case, it’s quite dissapointing.

Surely they’d have a different view if you were puting a fair chunk of £’s upfront yourself, say £50k??

If that is how the banks do operate with regard to new-starts, they don’t deserve the business anyway. How come they’re always offering ‘business accounts’, advisors etc?

Is there any OD’s here that have had the bank help them start or have you all done it yourself with no financial (bank) assistance??

8

marcustandy:
Is there any OD’s here that have had the bank help them start or have you all done it yourself with no financial (bank) assistance??

Done it myself without the banks help, mind you large redundany cheque made it a lot easier :wink:

If the company is reputable, they should have no issues with making payments early for the first few weeks or months, to help you along.

As mentioned by the others, 90 days is one to steer well clear of, if your unlucky, 90 days could stretch into a little longer and by then your potless and cant get the fuel…

9

banks aren’t gamblers they want to see a sure return on their money, they’re also not daft and know full well that for every sucess theres at least two failures.
if you can get a written three year contract that states a firm is going to give you x amount of work at a certain rate,then sure you can walk in any bank and get financial help, (at their chosen rates of coarse) but how many actually work on a contract? not many! the harsh reality of business banking is that banks will make far more out of a business thats running close to the edge than they’d ever make out of an arranged overdraft or loan without taking any risks.
what anyone considering going into business has got to realise very quickly is that nothing is for nothing and theres plenty, including the banks who’s sole intention, is to take as much out of your business as possible whilst doing as little as possible to help you make it a success, after all, there’ll always be another lamb to the slaughter when you’ve gone under.