How To Get More Cash -
Our Invoice Factoring Services
Your Freight Company
The Cash You Want
Factoring invoices is beneficial for a number of factors. It permits a truck firm to raise cash without acquiring new debt. While financial obligation is in some cases essential, the majority of trucking firms would prefer to raise money without obtaining cash. Debt is risky, and when it cannot be repaid, assets can be repossessed. If the debt is large enough, it could even force a truck companies out of business.
The Company Who Won the Prize For - Choose
An Accounts Receivable Factoring Company Instead Of A Typical Bank Funding
How to Increase Money Flow Without Loaning -Cash Money flow is among the main reasons companies fail.
At one time or another, every company, even successful ones, have experienced poor money flow.
Cash flow does not have to be an issue any ever more. Do not be fooled -- banks are not the only locations you can get funding. Other solutions are offered and you do not have to borrow money. Exactly what is truck factoring ? One solution is called invoice factoring services. Trucking Factoring is the procedure of offering invoices to a financier instead of waiting to collect the cash from the
customer. Oh, the Irony- Trucking factoring has a paradoxical difference:
It is the monetary
backbone of numerous of America's most successful businesses. Why is this paradoxical ? Since factoring is not instructed in business colleges, is rarely mentioned in business plans and is fairly unknown to the majority of most of American business individuals.
Yet it is a monetary procedure that frees billions of dollars every year, allowing countless companies to grow and succeed. Receivable Financing has actually been around for countless years. Receivable Loan Financing Companies are financiers who pay money for the right to receive the future payments on your invoices. An unpaid receivable or invoice has value. It is a financial obligation your customer has agreed pay in the near future. Factoring Principals--Although factoring
deals exclusively with business-to-business deals, a big percentage of the retail business uses a factoring principal. MasterCard, Visa, and American Express all use a form of factoring in their retail transactions. Utilizing the purest definition of the word, these big consumer finance companies are really just large FACTORING Companies of customer paper. Consider it: You purchase at Sears and charge
it to your MasterCard. The store gets paid almost immediately, although you do not make payment up until you are ready.
For this service, the charge card business charges Sears a fee (typical common normal fees vary from 2 to four percent of the sale). The Benefits Receivable Loan Funding can provide many benefits to cash-hungry business. Instead of waiting 30, 60, 90 days or longer for payment on an item that has actually already been provided, a company can factor
(sell) its receivables for money at a small discount
off the amount of
the invoice. Payroll, marketing efforts, and working capital are simply a few of the business requirements that can be satisfied with instant money.
Invoice Factoring Services offers the means for a manufacturer to replenish stock and make even more products to sell: There is no longer a requirement to wait for earlier sales to be paid. Receivable Loan Financing is not just a cash management tool for manufacturers: Practically any kind business can benefit from Truck Factoring. Typically, a business that extends credit
will have 10 to 20 percent
of its annual sales tied up in accounts receivable at any given time. Think for a moment about how much is tied up in 60 days' worth of invoices: You can not pay the power expense or today s payroll with a customer s invoice, however you can offer that invoice for the money to meet those obligations. Using trucking factoring companies is a quick and simple process. The factor buys the invoice at a discount, usually a few portion
points less than the stated value of the invoice.
Please call our freight bill factoring experts at 1 - 888-239-9162
or E-mail Us
The U.s. Trucking Association
specifies that there are about
205,000 work with freight trucking
300,000 private service providers trucking
firms certified to
operate in the U.S. that transferred,
according to their latest searchings for billions of
products, materials and
basic materials .
There are a number of common
teams on our nation
highways transporting these
crucial products to our
stores, factories and harbors.
several of them and offer their
receivables financing facilities
including the following states.
Alaska, Arizona, Arkansas,
California, Colorado, Connecticut, Delaware,Florida,
Georgia, Hawaii, Idaho State,Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,
Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska,
Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina,
North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina,
South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia,
Wisconsin, and Wyoming
The largest trucking companies in the U.S. set a revenue record in 2013, but revenuegrowth slowed for the second year in a row.
The combined revenue of the 50 largest motor carriers rose to $106.6 billion last year, according to The JOC Top 50 Trucking Companies list, based on data prepared by SJ Consulting Group in Pittsburgh.
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If you're like most drivers, you're looking for a better company in trucking that might be offering the best jobs in terms of pay, freight, and hometime ' not to mention benefits or a sign on bonus. We've got all of our clients listed based on the states where they're hiring, so you can quickly find the best job in your home state. You'll see the very best nationwide trucking companies that have positions available.
EveryTruckJob.com is a free service dedicated to helping professional truck drivers find new truck driving jobs with the best trucking companies hiring today!
Locate truck driving jobs by city, state, position andbenefits offered. Search current driving jobs and fill out the EZ truck driver application customized for cdl trucking jobs
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Life of a Truck driver, like many other professionals can be very challenging, rewarding, and frustrating at the same time. �The Truckers Place.com� is an information site for many of the Truckers needs. It is designed to encompass the needs of the Trucker, both on the Road and at Home.
Since the mid 1980s Elliott Truck & Haul have been successfully running their freight business. For more than twenty years they've been delivering goods for most major industries in the nation, with business booming as they traversed the country, in all kinds of weather, for all kinds of clients. During the heady times from 2002 to 2007, Elliott was a top rated accounts receivable mastermind of the trucking industry. Very few customers were behind on their bills, and those customers who were late turned in their overdue payments within an acceptable time frame. The money was flowing, and times were great.But a short year later, in the fall of 2008, when the United States economy took a nosedive and businesses both small and large began to feel the pinch on their pocketbooks, those that used to make their demands had suddenly and largely gone silent. Business slowed to a crawl
. Worse still, it was noticed by Elliott in early 2008 that even though most of their loyal customers were on time with their payments, there were a few late bloomers who were starting to spread the disease. Spring changed to summer, summer changed to fall, and the CEO of Elliott, Rick Price, was beginning to feel very uncomfortable indeed whenever he looked at their weekly Accounts Receivable reports. There was a growing list of clients who now owed them back debt.He had already been to the administrators to ask what the actual problem was. Were they doing things different, or wrong, when it came to collecting overdue accounts? When checking his bookkeeper's records this was definitely not the case. He thought perhaps that he was losing clients to a competitor who offered rock-bottom prices with little to no guarantee of quality performance, and that the folks who owed Elliott money had jumped ship and decided to leave him holding the bag.
. Perhaps they were unable to pay their debt to him, but were able to meet the costs of a lesser service. So he did the necessary research and, after discussions with friends in the same field, he realised that no, his customers hadn't gone anywhere else. They had just gone home.To Rick Price the situation looked desperate. Rick was very concerned, because there were constant overheads, goods to ship, employees to pay, and trucks which needed to be maintained, but there just wasn't the money coming back into the business. At night he would speak to his wife Katie and shake his head in frustration.
""Lin, I have a really bad feeling,"" he would say with deep woe.""What could you do differently?"" she would ask.Rick would stare off for a moment and then close eyes. He could see the fleet of trucks he had purchased over the years. He could see them on the road, delivering good to all his loyal customers. But then a haze would cover his trucks and his vast fleet would vanish to leave just a few. What could cause this ultimate death spiral of business?""I know what it is,"" Rick said. ""For way too long I've been relying solely on profits received from invoices. For too long I've been allowing our clients to let their accounts become overdue."" Linda could only grab her husband's hand and look at him lovingly, ""It's a hard economy. It might be awhile until things get settled up.
""Rick knew very well that Katie was only trying to help, but his responsibilities weighed heavily on his shoulders and he knew he had better do something soon to resolve this situation.The following day Rick walked into his office with a spring in his step, determined to call each and every client who owed money to Elliott Truck & Haul. Now, it wasn't the most efficient way to spend a day as a chief executive, what he really needed to be doing was to be overseeing all of the other intricacies of shipment and delivery and reaching out to prospective clients or retraining his sales team to do the same. But, he felt like he was doing something proactive to help his business, even though he had staff on salary to do just that thing. A waste of time - a waste of money - he had the best intentions, but all the while Rick was realising just how much trouble he was in.After a half day of contacting debtors in vain - they dodged his calls or promised to call back at worst or made minimal interest-only payments at best - he was about to throw in the towel when his secretary Heathererley knocked at his door.
""Can I have a word with you Rick?"" she asked standing in the doorway.
""Of course Heather, please come in."" Rick relaxed back into his chair and looked up at Heathererley.""Well, I did a little searching this afternoon and tried to figure out a way out of this mess Rick."" She opened up a folder she had been carrying and pulled out a small wad of papers, placing them on the desk in front of him.""Have you ever heard of factoring?"" Heathererley asked.""It sounds vaguely familiar. What is factoring""? he asked.She began, ""Well, it's really very simple. So basically, factoring invoices would enable us to get paid on the nose for loads that we haul.""Rick interrupted ""Immediately?"".""Yes, immediately,"" she continued, ""In a nutshell, it's pretty easy. We start by having a professional account manager review our figures and help us set up a company profile. Included in the profile would be the investigation of our accounts receivable aging reports, our current customers' credit limits etc.. In addition, factoring will assist in determining our customers' creditworthiness, independent from their credit relationship with our company. It�s a broad view.��I see,� Rick said. �And then what?��Following the completion of their review and once we've been approved for a contract with the factoring company, then we sit down to negotiate conditions and terms. There�s a lot of flexibility depending on the business volume and credit histories. The company will advise us the cost to purchase factoring for our company's accounts receivable. The funding commences once we�ve arrived at an agreement.�Rick leaned forward and reviewed the paperwork closely.""It sounds too good to be true, Heather,"" he said.""Yes, I know; that's exactly what I thought at the beginning. But think about it, Rick: they've guaranteed that experts will do all the paperwork, and that will free us up to do what we should be doing - focusing on our customers in good standing, and that kind of stuff. They appear to be very flexible, Rick,"" she drew a circle around a paragraph on the document before him.""Just how flexible?"" asked Rick.""They personalize the factoring rates so that the amount they are willing to take on is commensurate with our needs and our client�s debt. Apparently they can figure this all out in two to four days.
""""It does all sound pretty good, remembering that we're all tapped out now with loans from the bank last year to repair vehicles, and we all know just how tight money is. It's imperative that we keep the business rolling as usual, and every day we go unpaid we're getting closer and closer to dealing with some serious issues in both the short term and the long term,"" said Rick.He took a deep breath and looked at his secretary with something she recognized as hope.""Exactly�. I think this might just be a way out of the trouble we're in with these folks who owe us money.""Rick thought about this and agreed with Heathererley. The clients who owed them money were long standing friends and professional resources of Elliott. They didn't want to throw away these relationships because they were having trouble paying their bills now. He was well aware that the economy was in a bad way and that it might be quite a while before things started picking up. That unknown amount of time, if he handled these debtors incorrectly, could spell disaster for both of them. He didn't want to lose business but he also didn't want to lose any more money.""Let me go over this tonight Heather, and thankyou."" Heather nodded, satisfied with her work, and she left the office feeling quite content in the knowledge that she had helped Rick keep the shirt on his back, and possibly hers too.Rick sat behind his desk and looked over the details Heather had not mentioned in their meeting. He wondered if there might be other problems freight factoring could help Elliott Truck & Haul with? With his pencil gliding down the sheet he noticed that the factoring company could help fray the cost of fuel with fuel discount cards and fuel advances. Rick was surprised: it said that his company could get up to fifty percent cash advances on load pickups. Rick was a typical business man: he despised binding contracts that didn't allow room to breathe, so he was pleasantly surprised to see that the factoring company didn't require a long term contract, that there was no minimum volume required, and that there were no sign-up fees.""I must tell Aaron the good news,"" Rick muttered to himself.Aaron is Rick's son-in-law, and he really admired the ideas behind Elliott, so much so that only two years before he had started his own transportation service business. At that time Rick knew the struggles Aaron would face, but he still encouraged him to follow his dream. With the economy the way it was, if an established company such as Elliott was struggling then the little guys, like Aaron, were going to be in even more trouble. Perhaps the antidote to these problems was in freight factoring, and they were about to find out.Some months later, having successfully gone through the entire process of the application, having experts study his credit history and statements and review his accounts receivable, Rick found that he was starting his journey out of the despair which had been created for him by his delinquent account holders.They took on reasonable factoring purchase contracts and stopped spending their precious man hours scrambling to collect debt. They used that time to refocus their efforts in being competitive in new territories. Rick looked back on the dismal months of life before freight factoring and almost shuddered at the thought. If Rick hadn't discovered freight factoring at just the right time, his business may not be operating today.
More Trucking Factoring Companies Story Articles
Factoring in the Future of a Trucking Business: A Story Tony Hamilton let the phone ring on his desk. His morning coffee cooled and his cigarette smoked away in the tray: Tony is thinking, and pondering the biggest decision he's ever had to make for his trucking business. Hamilton Trucking Company had reached a turning point and he now had to make a decision as to whether he should sign up with a factoring company, and indeed if this would be a good or regrettable decision for his business.
More than forty years ago Tony's father had started this business working as an owner-operator and eventually growing Hamilton Trucking Company into a fifteen trailer fleet. There had been some hard times when it seemed everything was going to go under and even Tony�s mother strapped herself into a cab to make hauls. His father had lived long enough to witness the price of hires drop during the recession and watch the eruption of fuel prices afterwards. Now the company was solely in Tony�s hands and he wanted to live to see it in better shape for his sons.
There just never seemed to be enough money to go around, and certainly no spare cash, but to move his company successfully into the future he needed a steady and reliable cash flow. His employees needed to be paid. They had families and household bills too. A few of the refrigerated trailers really needed some maintenance, and in order to stay competitive he really wanted to invest in specialized haulers to meet the increasing requests for loads of agricultural and energy equipment. Every time he had to turn down a request, Hamilton Trucking looked weak in a very strong market.
He knew what his father would have said - 'wait, take your time before adding new technology'. Tony allowed himself a good hard chuckle. His father had been against placing GPS units in the cabs. His Dad would say ""Why on earth do you need some stranger telling you to get off the exit that everyone knows has been there for years?� He smiled to himself as he remembered his father poking fun at the other drivers who switched to automatic, even though automatic was quite obviously more efficient (though less manly). He knew his father's days were long gone and new technology was very important for the business, like having Qualcomm to reduce communication time for bills of lading.
Tony believed a successful man is always thinking of his next step. How would he take Hamilton Trucking to the next level? More importantly, how could he afford it? Business funding was tied up in fuel bills and the mortgage for the garage and office. He just finished paying off the small bank loan for installing satellite radio in the trucks for the guys.
He wondered about factoring - was this the answer for him? If he was being honest, he didn't really understand how it all worked. It sounded a lot like ninth grade algebra which just didn�t feel like it belonged as part of the trucking business. A factoring company actually purchases your invoices and takes control of your accounts receivable, payment being a certain percentage of the amount invoiced. In return, the factoring company pays the trucking business straight away, providing immediate cash flow for the business to pay staff, purchase fuel, and do any repairs or maintenance. Without this assistance, you're placed in the position of waiting for payment from your customers, and this can often be thirty days, or more. During those thirty days the trucking company can't pay its employees and bills with invoices.
Now it was time for Tony to do his homework. He had heard of companies charging for same day money transfers, advancing a percentage of the money owed to your business, while the rest is held in a private account if the bill wasn't paid within sixty or more days. Plus it was worse still if the customer didn�t pay up at all because then the factoring company would take it right out of the money supposed to be coming to you! Through the grapevine, he�d also heard about how some companies suddenly slipped you onto a sliding scale of percentages even if you had already signed a lengthy contract for maybe 3% or 7% so there you are with 10% coming as a cost to you out of the freight bill. His colleague, Ronnie, who owned a trucking company in Missouri, was nearly destroyed by a factoring company who charged him the full freight bill on top of the fees for factoring. He knew he would have to be very careful if he was to avoid any of these shady companies?
But it turned out to be quite easy. When he called the factoring companies he discovered they were very open about their business practices, and very friendly and helpful. Customer service appeared to understand their company and explained in clear, concise English exactly how it all worked. He didn�t mind signing an exclusive contract. In fact, he was quite pleased with the idea of a long-term contract because he knew this was a one-off and he wouldn't have to keep going back and forth to different companies. He was not charged for a credit check, and in addition he was offered a fuel advance on the pick-up of a load. In fact there were a few companies who offered him a non-recourse factoring program, and this was exactly what he had been hoping for. Also he was happy to hear how much he was offered in terms of percentages on the freight bills. It sounded like a great scheme to him.
For Tony it was quite a relief to be dealing with the factoring company. They were extremely helpful and more personable than the bank staff. He was relieved to note that the factoring companies understood the trucking business and discussed business with him like a respected client, not like someone looking for a handout. The factoring companies were not interested in his credit nor the financial problems his father had experienced in the past. All the factoring company was interest in was the credit of his customers and on their reliability: this worked great for Tony because he and his father had created a very strong and loyal list of clientele over the years. He knew immediately that there would not be any problems when they were contacted by the factoring company regarding their invoices. His clients wouldn�t think poorly of Hamilton Trucking and the factoring companies appeared capable of handling the accounts receivable in the same polite manner that his father had used over the years.
Tony stepped out of his office to let his secretary know to expect the arrival of the factoring contract shortly. There was a new bounce is his step now: he knew instinctively that this new step would raise the future of his company to a new and higher level, and that all the stress from the past could now be put behind him. With the capabilities of this new cash flow, Tony could actually expand Hamilton Trucking Company further across the country and perhaps even go international into Canada. His heart felt full knowing his sons wouldn�t have to worry about money because of the right decisions he had made for their trucking business.
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Trucking Factoring Articles
�So It is not a loan?� asked Derek Rogers, reclining back into his chair and crossing his legs. The woman sitting across the desk from Derek smiled at him, shaking her head.�Not quite,� she said.Derek was the owner of a small trucking company which had fallen on some hard times recently. Certainly the trucking business can be an extremely profitable venture, and for many years it had been that way for Clyde. His company was called Richards Trucking, named after both of his grandfathers, Jimmy and Harvey. Both of these men had been very hardworking and had set a great example for Clyde.Six months ago disaster struck Clyde's business when two out of his fleet of fifteen trucks were taken off the road.
One was involved in a very costly accident, and the other simply rolled over, and headed to the trucking graveyard. The financial security of Clyde's company relied on his full fleet on fifteen being on the road, and missing two trucks was just devastating . Furthermore, buying a whole new truck and fixing the other simply took more cash than Derek had on hand.Paying of bills in the trucking industry is always a major cause for concern for businesses.
Waiting a month or longer for bills to be paid was quite normal. This system works okay as long as no problems arise, but if they do, then things can get quite sticky.Derek was an excellent business man, and he certainly hadn't done anything wrong. Things had happened that he couldn't have predicted, and he had to figure out a way to keep his business from hurting, or even going under.And that's why he found himself across the desk from this woman. Derek knew she was employed by a Factoring company and that her name was Christy. He had accidentally come across her company one night when he was working late, searching the internet to see if there was some solution to his financial dilemma.She sat there now, and explained. �It�s not a loan, we purchase your accounts receivable. We aren�t giving you money to be paid back later, we�re buying something from you, and you can buy it back when you can. This is a win-win situation: we're protected from a total loss, and you're protected from the ridiculous fees and charges you'd have to pay if you borrowed from a bank.Derek agreed. It sounded perfect - perhaps too good?.Christy laughed. �I'm not sure that you believe me,� she said.�No, I do, I just think it sounds a bit too good to be true. I actually thought I might end up losing my business.�Christy nodded. �Yes, we get a lot of that. Listen, I�d hate to see you lose your company. You work hard, you�ve put everything you can into it. We all need help sometimes. That's why we do what we do.��In any case, thank you for coming to see me.��It�s right down the road, usually we do it all online, but I didn�t mind swinging on by today,� Christy said with a smile. �Let�s see what we can do to help you.�And with that they set about making a profile.
Derek completed the form, with Christy offering advice as needed.
The profile filled Christy and her company in on Clyde�s company, and would help them determine if he was suitable for factoring. Unfortunately, not all companies are. Some businesses are beyond the help of a Factoring company, while other businesses weren't in enough financial stress to warrant it. As Derek completed his form, Christy listened to his story and she felt quite sure he would be the ideal candidate for Factoring.Christy took the completed form and placed it in her briefcase. Standing up, she reached over the desk and shook Clyde's hand. He also stood up, and they smiled at each other. They said their goodbyes and Derek walked her to the door, and then returned to his office.All his staff members were there, all seven who worked in his office. Sitting behind his desk once more he could hear the familiar sounds of his office workers going about their daily business.He leaned back and closed his eyes. He had felt so helpless lately, was sure the whole thing was collapsing, and would take him with it. Talking to Christy though, learning about factoring, it felt like a weight had been lifted from his shoulders. He sat back in his chair and ran a hand through his graying but still thick black hair.All those long, sleepless nights. The terrifying panic attacks that occurred regardless of where he was. Already he could feel all the stress start to drain away. He knew it wasn't over yet and that there was still a way to go, but he could just feel everything start to change for him. He was there, he was on the right path, and he was working to make things right.Derek couldn�t help but think back to when he had first started the business. He had opened a restaurant at age twenty two when he was fresh out of school. It had been successful. Home cooking in his hometown, and he had done very well.But it wasn't what he really wanted to do. He wasn't passionate about the food industry. He thought about it for a long time, then decided it was time to sell his restaurant. He took half a year off, and in that time he thought to start Richards Trucking. So he did it. For the second time in his short life he created a company from the ground up. He had been successful.And then the trucks went down, and his success looked to be in flux. He was nearing fifty. He didn�t think he had it in him, to save this company. But giving up wasn't part of his personality either.
The idea of cutting his losses, shutting down, laying off his workers, it actually made him sick some nights. He didn�t know how to say quit.And now, because of factoring, he was sure he wouldn�t have to. Derek opened his eyes, sat forward, turned his computer on. He had things to do. He could be thankful later, for now, it was time to work.
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The reason why Truck Corporations Use Factoring Companies.
As the owner of your own firm, you may perhaps be more than conscious already of the difficulty in making certain that capital matters do not become a problem down the line. After all, the worst thing that can in all probability occur for your establishment is to find yourself dragged in a long and hard situation that leaves you forever trying to find the resources you need on an continuing manner.
For virtually any enterprise in this situation, the dilemma can come for waiting for work to clear up and actually be brought in into your bank account. Bill of sales, checks, and the like could take a while to actually to be taken care of which can leave you with momentary capital difficulties. Fortunately, there are alternatives out there for companies to look into-- and among these is factoring firms.
Factoring providers will, in substitution for your invoices, provide you with the cash asap in order that you don't need to worry about the delaying duration which could make paying the expenses and acquiring toolsmore challenging. With this kind of arrangement, invoice factoring can end up being extremely practical for countless businesses who need to avoid a money lure which they have discovered themselves in.
Due to the fact that, basing on the volume of the task, it can take up to 60 days for a number of establishments to get paid out then it's vital to cover your own back and definitely not leave yourself funds short to pay off the bills. After all, how many enterprises possess two months cash flow just occupying there to address all their costs until they earn?
This is particularly correct of trucking establishments. They generally handle good deals of statements which means a substantial quantity of collection period entails business owner themselves. Trying to get compensated promptly can end up being an incredible headache and this is the reason why you employ trucking factoring organizations who are thrilled to help out truckers exclusively.
As we all realize, trucking is an extremely enormous field with a lot of companies out there utilizing hundreds of vehicle drivers. Sadly, plenty of these drivers wind up in income difficulties given that they are still awaiting work from six weeks back to actually compensate them. When this is the scenario for a truck organization, resorting to factoring providers for support might be the most ideal option left.
This implies that a trucking company can pay out the salaries of the work force, keep all the vehicles loaded with gas and continue to surmount, rise and expand without continually waiting for the finances which is taking too lengthy to come in. Trucking Companies operating without a factoring program applied are leaving themselves at critical hazard, as rivals cash out fast and proceed to expand.
There's absolutely almost nothing to be troubled about when it comes to working with a Factoring establishment-- they typically aren't like a financial institution or any individual who is going to leave you with a substantial mound of financial obligation to pay back. You give them authentic invoices from job you have already finished , you are simply hastening the payment system.
In the United states of America, where truck establishments survive, factoring establishments are not considered taking on loan in any capacity. This private settlement then enables both parties to profit and take pleasure in a convenient future-- it gives the factoring firm a guaranteed resource of revenue to put into the list and it gives the trucking company the needed finances that they sweated to get.
The trucking company provides their accounts to the factoring enterprise. The trucking factoring provider then obtain the payments from the trucking company's customers. Factoring has been all around for hundreds of years and has been used for long times by several various fields-- but none more so than truckers. While you might possibly lose out on a small part of the money, something like 1-3 % depending on who you deal with, it means that you are getting the cash today and can actually start putting the cash to do work.
After all, an IOU or an invoice is not actually going to cover overheads, is it? For trucking companies when the hard earned cash can be great one day and gone the next, it's up to the drivers to work sensibly and to guarantee they are leaving themselves with a considerable volume of time and money to get through the week up until they are compensated again.
So the next instance your trucking company is enduring some temporary capital troubles and you are spending a lot of time chasing slowly paying clienteles, why not start thinking of utilizing a factoring businesses as a way to get your money and give yourself a more convenient future in the eyes of your trucking workers and your bank dividend?
Traditional Bank Loans
Finance through a bank loan is the normal, or traditional, way of financing your business. These loans can be a life-saver, but they're not always available to every business. For example, a fairly newly established business simply may not have the assets to readily get a loan from a bank, even if they do, the standard collateral for a business loan is the business itself, which means that if you cannot make your loan payment, you risk losing your entire business. Plus, the amount you apply for through the bank is the actual amount that you are going to receive. Of course, once that loan has been re-paid, you can always re-apply for another loan.
What Are Trucking Factoring Companies?
Trucking Factoring companies don't offer loans, and you don't go into debt when you get money from a Trucking Factoring company. Rather the financing you receive from a Trucking Factoring company is based on money your business has already earned, but have not yet received. Trucking Factoring companies actually purchase your accounts receivable or at least part of them for a percentage of their total worth, Normally around 80%-95%. The amount of finance you can receive will be based on the amount you have earned and the accounts receivable you are prepared to 'sell.' Once a Trucking Factoring account has been created for you, it will continue for as long as you need it, with the money available continuing to grow as your business grows, and providing cash as you require it.
Benefits of a Trucking Factoring Company Vs. A Bank Loan
Not every business can benefit from Trucking Factoring account financing because you have to have a business with accounts receivable, however there are many benefits for those who can access this type of finance.
1. You Won't Incur Debt. You don't incur debt as you do with a bank loan because the Trucking Factoring company actually purchases your accounts receivable. This has many benefits including the fact, that this type of financing won't affect either your business credit rating or your personal credit rating. Should the unforeseeable happen and your business fails, you won't have to worry about anyone coming after your personal as well as your business assets to pay off a loan. With a bank loan, the debt goes onto your credit report, and even one late payment can adversely affect your businesses credit, and even the ability to get insurance and may even reflect upon your personal credit rating.
2. There's no collateral required. Another great benefit of using the services of a Trucking Factoring company instead of a bank loan is that there is no collateral required for the Trucking Factoring company, because the Trucking Factoring company is 'buying' your accounts receivables. In addition, while the Trucking Factoring company does run a credit check on your customers whose accounts receivables are offered for financing, the state of your credit is not an issue. This means that it's easier for new businesses to access the finance they need through a Trucking Factoring company, providing their accounts receivable are in good order. A bank may believe you haven't been in business long enough to be able to cover this risk.
3. Receive Your Money Faster. Using a Trucking Factoring company means that you'll get the finance quicker. The money will normally be in your account within 24 hours, once the Trucking Factoring company is confident that your customers� accounts are likely to be paid. Borrowing from a bank begins with vast amounts of paperwork, the loan must be underwritten, and this can take ages before you're notified if the loan has been approved.
4.You receive interest up-front. Unlike a bank loan that continues to build interest that you have to pay the entire time you have your business loan with a Trucking Factoring company, you don't have to continue to pay interest as they take it right off the top, deducting it from the total amount of accounts receivable. So not only are you relieved of those monthly loan payments, but you also don't have to worry about the building up of interest, as every penny in the account is yours to spend on the business.
As you can see, there are several benefits that makes considering financing through a Trucking Factoring company over a traditional bank worthwhile. However, there are also a couple of other benefits that a factory company can offer your business is far beyond the scope of the bank. The most important benefits is that once you sell your accounts receivable to the factory company, you don't have to take time away from running your business to collect the money owed from reluctant to pay customers. Since these accounts belong to the Trucking Factoring company, this is now their job. Trucking Factoring companies are very efficient at debt collecting, and this frees up your valuable time to devote to running your company.
Another bonus is that, because the Trucking Factoring company has evaluated the quality of your customers' credit before buying the accounts receivable, you learn valuable information regarding your customers, like which ones are likely to pay, and which ones are less likely to pay.While a Trucking Factoring company is not the only way for your business to obtain the money it needs to keep growing, it does offer a type of financing well worth considering.