Overview of Scrap Metal Industry
The scrap metal industry accounts for up to 90 billion dollars in economic activity in the U.S. Companies often collect scrap metal from a variety of sources, including junk cars, old machinery, appliances, and construction waste, which enable many small companies to enter the industry and cater to a local market. Scrap metal recycling in the U.S. remains an important source of supply for developing countries that need both ferrous and nonferrous metals to supplement their development. Over the five years to 2018, industry revenue is projected to increase per year on average. Financing and working capital have never been more essential for the growth of the industry.
Importance of Scrap Metal Industry
By buying excess shavings and cuttings, scrap firms offer factories another income stream while keeping their plants clear of piles of metal waste. Scrap Metal Recycling not only gives your company profits from the value of your recyclables but also adds to the environment and economy. Scrap metal has been reused for thousands of years because reusing the metal is a more efficient process than mining and processing new ore. According to one of the reports given in Metal Recyclers, LLC, in 2008, the scrap reusing market generated 86 billion dollars and supported 85,000 jobs. It decreases greenhouse gas exhausts and makes use of less energy. If you recycle a ton of aluminum, it can save up to 8 tons of bauxite ore and 14-megawatt hours of electricity.
Challenges: Scrap Metal Industry face!
- Scrap is a high volume and low margin business
- Prices for many metals have been falling for several years
- Unpaid bills in the wake
- Competition from scrap substitutes
- High shipping cost
How can the Finance Industry Help?
Metal scrap-yards and firms generally need cash flow right from the time scrap is loaded. However, it can take several weeks and months to even get bills of lading available. To be successful as a scrap metal supplier, you must always be able to pay for scrap metal in advance and then wait for 2 to 3 months. Banks don’t understand the business of recycled scrap metal well and typically do not have real solutions for this industry. Hence, loans are not a good financial solution for the scrap metal industry.
Invoice factoring with credit protection allows metal companies of all kinds, to get funding with up to 92% of the invoice amount.
BusinessCash.com provides financial support to the Scrap Metal Industry. We offer the following solutions and customize a financing package for your unique situation:
- Purchase Order Financing: PO funding provides you the financing to pay scrap metal suppliers. This enables you to deliver the goods and close the sale.
- Non-Recourse Accounts Receivable Financing: AR funding can be a source of unlimited working capital. It can help you accelerate cash flow and sustain in business.
- We also manage Accounts Receivables for you. We provide a complete solution for a firm’s asset management.
- Our experienced experts can help you with complying with government regulations.
- We can help you pursue growth initiatives and face increasing competition.