How an insulation firm tripled its turnover in four years

Plenty of work, money too late

The owner started his insulation business fifteen years ago with two men and a van. The craft was sound, the clients were happy, and the jobs kept coming in. Yet for years the growth failed to arrive, and the reason was not on the shop floor. That pattern is typical of construction and infrastructure, where costs run ahead of income.

"We had the people, we had the knowledge, and we had the demand," he says. "What we did not have was the room to say yes to the big jobs. A fifty thousand euro contract meant I had to advance materials and wages first, and then wait three to four months for my money. In construction that is not the exception, that is the norm."

The result: every year he let jobs go that fitted the business perfectly. He could handle them easily. It was just that the liquidity would not allow it. "That is the frustrating part. You say no to work you know you would do well, purely because you cannot pre-fund it."

The bank kept the door shut

The obvious route was a dead end. "At the bank I got nowhere. And even if they had been willing, a process like that takes weeks. By then the job has long gone to someone else."

A fellow business owner pointed him towards factoring. The principle was new to him, and that made him cautious at first. "There are plenty of providers, all with different terms. I did not know where to start."

When he contacted SOOF Finance about factoring, someone was sitting at his table within a day. "No sales pitch. Someone who knew construction and grasped straight away where my money was stuck. We looked together at which form suited my situation."

How it works

The answer was traditional factoring on the full receivables book. He submits his invoice, SOOF pays out a large part of it straight away, and his client pays SOOF later on their own term. The remainder follows once the payment comes in.

The difference with a bank loan is in how it grows. "My funding line is not a fixed ceiling. It scales with my turnover. If I take on a bigger job, the headroom simply grows with it, without my having to go back and renegotiate."

Part of his security was still pledged to the bank. SOOF took over that position and coordinated the process, so that he did not end up in the middle of it.