24th March 2025

Forward planning is essential if cashflow-pitfalls are to be avoided, and this is an area where Scania Financial Services can help.  Sales & Marketing Director David Hickman explains. 

Cashflow, quite simply, is the movement of money in and out of a company over a given period of time.  Managed correctly the firm will flourish, but get it wrong and the consequences can be severe.  While every business has its ups and downs, there is much that can be done in terms of cashflow-planning to mitigate the risks posed by spells of reduced liquidity.

In many cases variations in cashflow can be foreseen.  If, for example, a business is subject to seasonal variations, then times of lower income can be predicted.  Similarly, start-up companies may significant investment to get up and running – investment which has to be made before any income begins rolling in.  While a loan may provide a solution – or not if the bank chooses to decline – there is another way to think about managing cashflow. 

At Scania Financial Services (SFS) we don’t look at cashflow in pure monetary terms – throwing money at the problem is not what we do.  We seek to build long term relationships with our customers, and for that a solid foundation is essential.  So our approach is to look at a company’s position as a whole, working with our customers to understand how their businesses work.  From there we go on to structure an asset financing plan that will enable them to meet their objectives while helping to prevent any cashflow strain.  To do that requires industry knowledge, which we as the captive finance house of Scania have and is one of the key differentiators between us and other lenders including those on the High Street.

To give an example of the way in which we operate, let’s say a company with cash-in-hand comes to us offering a large deposit as a down-payment on the finance for a new vehicle. However, following a conversation with that customer we determine their business plan for the year means they will actually require two new vehicles to deliver the contracts they hold. So, in order to avoid a major cashflow-draining expense further down the line, we help them utilise their deposit in a way that allows them to acquire two trucks immediately.  To manage and plan for their future cashflow, each of these vehicles could be on a different repayment programme based on how the projected income stream will play out over time.

Underpinning our service is flexibility – we have the ability to adapt and modify our products not only to meet our customers’ transport needs but also to anticipate their cashflow requirements.  Seasonal payment plans, VAT deferrals and structured deals are all part of this, as are two specialised products we offer; Freedom and Flexi-Buy.

Our Freedom product allows operators to take an annual payment holiday of up to two months a year on a hire purchase agreement to help ease financial commitments and pressure on cashflow at specific points during the year.

In addition to the benefits of a regular hire purchase agreement, Flexi-Buy provides the option to make an overpayment of up to 20 percent of the remaining balance without incurring any penalty.  It’s an ideal solution for operators who find themselves in a strong cashflow position and are consequently looking to repay their finance more quickly and reduce overall interest costs.

In summary, planning wisely for cashflow should be regarded as an essential business skill.  While it’s impossible to foresee every twist and turn along the way, there is much that can be done to minimise the risks and give peace of mind.  And for those occasions when the unexpected happens part way through an agreement, we are always willing to explore ways in which we could help – for our key aim is to keep our customers in their vehicles and on the road.

For more information on how Scania Financial Services can help with cashflow management, call us on 01908 487 561.