Sheffield husband and wife team ‘power ahead’ with tool business via new funding

A husband and wife team in Sheffield is ‘powering ahead’ with the growth of their specialist automotive power tools business Kielder and finding a way to manage their cashflow thanks to an “innovative” Invoice Finance facility from Optimum Finance.

Paying suppliers and staff while waiting to be paid themselves by some of the major resellers was the challenge. Invoice Finance, which uses receivables (invoices) as the principal 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, driving access to liquidity at the point of invoice as opposed to needing to wait.

Mo Han, co-founder and Head of Purchasing at Kielder, commented: “Optimum advances 85 per cent of the invoice value and that helps us not only pay our own people and our key suppliers, but also enables us to offer discounts on bulk orders to our key customers.

“With some of our customers requiring 60-day payment terms, it enables us to bridge the cashflow gap, and do so with what is effectively our own money. What’s especially good about it is that as we grow, so the amount of cash available to us also grows, and this will help us expand.”

The business 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 served.

He thus set to work designing his own range of power tools and associated products for professional mechanics, working closely with his Chinese partners. The result is a range of tools sold through specialist retailers and direct to the motorsport industry.

Mo was already familiar with Invoice Finance, having previously used a similar facility provided by her main banking partner. A change in funding policy, however, obliged her to seek alternatives.

She continued: “It was a concentration issue. Unfortunately, they reduced our accessibility to cash. Lack of cash restricted our growth and impacted our margin and profitability. It wasn’t sustainable and 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 cashflow helps me sleep at night.”

By Matthew Neville – Senior Correspondent, Bdaily

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