Scots Bearings, one of Scotland’s largest independent distributers of machinery parts, is set to grow turnover by 20 per cent this year, with support from its long-term banking partner, Lloyds TSB Commercial Finance.
The business, which is based in Aberdeen and also has offices in Dundee, Glasgow, Inverness and Irvine, sells a range of bearing and power-transmission products, which are used in a wide variety of machinery.
Established in 1996 and employing 55 people, Scots Bearings serves a diverse customer base, with parts used in structures such as oil rigs to white goods including household washing machines.
The company originally approached Lloyds TSB Commercial Finance for a funding boost in 2006 and secured a £500,000 invoice finance facility to drive three of the offices’ operations. This recently grew to a £2 million facility leveraged across all five divisions.
This funding advances the value of the business’ invoices as soon as they are issued to the customer, boosting cashflow. This has enabled the company to build solid relationships with suppliers, as payment terms can be shortened to facilitate discounts.
As a result of the funding and its diverse customer base, which ensures it is cushioned against any sector-specific market dips, the company is on track to increase turnover by 20 per cent this year to £12 million.
David Jackson, managing director at Scots Bearings, said: “With our base in Aberdeen we have grown consistently since the company was established 25 years ago by capitalising on the city’s varied industries including oil and gas, agriculture and technology – all of which operate machinery which requires bearings.
“Over the last six years we have built a close relationship with Fraser Wilson and the team at Lloyds TSB Commercial Finance, and, by communicating regularly, they have built a good knowledge of how our business works and its requirements.
“This has been instrumental in achieving record turnover figures in 2010 and 2011, with this year expected to top these.”
Fraser Wilson, client manager at Lloyds TSB Commercial Finance, said: “It is testament to David and the team’s hard work and expertise that they are targeting such positive sales growth in the relatively weak economy.
“By ensuring they deal with a diverse customer base, Scots Bearings also hedges its risk, with over 200 orders coming in each day, ranging from £1 to £100,0000.
“The finance facility ensures the company receives payment within 24 hours of issuing invoices, which in turn has a positive effect on the supply chain, meaning Scots can guarantee early payments to its suppliers, which can facilitate discounts and improved relationships.