DG Laundry, a specialist and automated linen hire and cleaning service service supplier has found an innovative way of managing its cashflow and expanding its business thanks to a bespoke Invoice Finance facility from Optimum Finance.
The solution was a tailored Invoice Finance facility from Optimum Finance, helping the business to find its feet, bridge the gap between invoice and delivery and enhance its service offering to a host of Michelin star restaurants and hotels in and around London, leading to a continued period of fast growth. It is on track to have quintupled its turnover in just two years.
Invoice Finance is a method of cashflow funding that uses receivables (invoices) as the principal asset against which money can be raised. Optimum Finance pays DG Laundry 80% of the invoice value as soon as it is submitted, driving access to liquidity at the point of invoice, as opposed to having to wait to get paid.
Yusuf says that Invoice Finance had an immediate positive impact on the business: “Starting out in such a competitive industry required large amounts of capital to purchase linen and specialist machinery that could process, clean, fold and package large quantities of stock,” he explains.
“Payment terms differ with each service, but we were often waiting up to 60 days to receive payment which put a potential strain on our cashflow reserves.”
“Invoice Finance provides a better alternative to a bank loan, allowing us to consolidate our business position and focus on growth, without taking on debt. As we grow, so does our facility and we can take on new business without the stress of waiting to be paid.”
The company provides and washes in the region of 70,000 towels, linen, napkins and tablecloths to customers each week, operating on a same-day turnaround basis.
Ensuring that each item is cleaned, ironed, folded and delivered in time, and to the right address is no easy task, but DG Laundry has designed a means to automate its operation, while maintaining the highest quality in hygiene, fabric, look and feel.
Each laundry item in DG Laundry’s arsenal is microchipped by RFID (radio frequency identification devices) so that both the company and its clients can monitor the live status of its cleaning cycle as it happens. This acts as an automated stock counting system, helping Yusuf and his team streamline their operation, limit mistakes and keep track of where and when items may have been damaged or are ready to be replaced.
“Most linen that we supply is expected to be replaced between 150 and 200 washes,” he explains. “With the automated stock system, we can identify which items need closer inspection before they return to the customer and guarantee that they receive the highest quality of service time and time again.
“Developing and purchasing the technology to track this would not have been possible without Optimum’s help. We now have a slick operation that enables us to wash between five and seven tonnes of linen a day, and fold between five and ten tonnes a day, and ends up in the delivery van ready for delivery without any issues, and without compromising on quality.”
DG Laundry has evolved from a laundry service start-up with an annual turnover of almost £1m to a projected annual turnover of £5m in just two years. The future is bright and with the support of Optimum Finance, an established sector is seeing the rise of an ambitious and driven industry disruptor.
