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• 24 Mar

  Car Body Finance Enables Repairer To Take On New Work

  

  Repairing car bodies is a niche that we specialise in finding finance. We were able to help one body shop find the car body finance that they needed to enable them to take on more new work.

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  Repairing Car Bodies

  Collision repairs following an accident tend to be paid for by the responsible party's car insurance company. The work will be carried out by a body shop that will have been pre-authorised to carry out the work. Typically, they will have provided a quote for the repair work which will have been agreed upon by the insurer.

  Signed Off Work

  Once the repair has been completed, the customer is normally asked to "sign off" the repair. This process confirms that the work was satisfactory and completed by the body shop.

  Billing The Insurance Company And Awaiting Payment

  Next, the body shop will bill the insurance company direct. This will mean the production of a sales invoice on credit terms that covers the parts and labour involved with the repair. This is sent to the insurer for payment at some point in the future.

  Whilst the debt tends to be sound in that it's signed off work paid for by a substantial organisation, it can take some time for the body shop to get the money from the insurance. Garages are often left awaiting payment for some time. This can be problematic when parts have had to be paid for upfront, staff need to be paid as do rent and bills on their premises.

  Car Body Finance

  This is where car body finance comes in. The financier will provide the repairer with the full value of the invoice (minus their fee) as soon as the invoice is raised. The financier then takes on the responsibility of chasing the insurer for payment if it becomes necessary.

  In this particular case, our client was a medium-sized repairer that was holding off taking on more work due to working capital pressures. We helped them find car body finance so that they would see their cash flow improve. Once the facility was in place, our client was immediately able to take on more work that will enable them to grow their repair business.

  By Glenn Blackman