How To Get More Cash -
Our Sale Receivables
Your Freight Company
The Money Your Company Needs
Trucking Factoring is advantageous for several factors. It enables a trucking business to raise cash without getting new debt. While financial obligation is often necessary, a lot of freight brokerage would like to raise money without borrowing cash. Debt is dangerous, and when it can't be paid back, properties can be repossessed. If the financial obligation is huge enough, it might even require a trucking companies out of business.
Cash For Companies. Tell Us What You Want - Select
A Freight�Invoice Factoring Company Instead Of A Traditional Bank Funding
Exactly how to Increase Cash Flow Without Loaning -Cash Money flow is among the main reasons companies fail.
At one time or another, every company, even effective ones, have experienced poor cash flow.
Cash flow does not have to be a problem any ever more. Do not be fooled -- banks are not the only locations you can get financing. Other solutions are offered and you do not have to borrow money. What is truck factoring ? One solution is called sale receivables. Truck Factoring is the procedure of offering accounts receivable to an investor instead of waiting to gather the cash from the
client. Oh, the Irony- Truck factoring has a paradoxical difference:
It is the financial
backbone of many of America's most effective companies. Why is this ironic ? Since trucking factoring is not taught in business colleges, is rarely discussed in company strategies and is fairly unknown to the majority of most of American business individuals.
Yet it is a monetary process that releases up billions of dollars every year, enabling countless companies to grow and succeed. Invoice Factoring has been around for countless years. Receivable Financing Companies are financiers who pay money for the right to get the future payments on your invoices. An overdue receivable or invoice has value. It is a debt your client has actually agreed pay in the near future. Factoring Principals--Although factoring
deals solely with business-to-business transactions, a large portion of the retail business utilizes a factoring principal. MasterCard, Visa, and American Express all utilize a type of factoring in their retail transactions. Using the purest definition of the word, these big customer finance companies are really simply large Trucking Factoring Companies of consumer paper. Think about it: You purchase at Sears and charge
it to your MasterCard. The store makes money practically immediately, although you do not make payment up until you are prepared.
For this service, the charge card business charges Sears a charge (typical common normal charges range from two to 4 percent of the sale). The Benefits Receivable Financing can offer numerous advantages to cash-hungry companies. Rather than wait 30, 60, 90 days or longer for payment on a product that has actually currently been provided, a business can factor
(sell) its receivables for cash at a little price cut
off the amount of
the invoice. Payroll, marketing efforts, and working capital are just a few of the company needs that can be met with instant cash.
Sale Receivables provides the ways for a producer to replenish inventory and make even more products to offer: There is no longer a requirement to wait for earlier sales to be paid. Receivable Loan Financing is not simply a cash management device for manufacturers: Practically any type company can take advantage of Receivable Financing. Typically, a business that extends credit
will have 10 to 20 percent
of its annual sales bound in accounts receivable at any given time. Think for a moment about how much is bound in 60 days' worth of invoices: You can not pay the power expense or this week s payroll with a client s invoice, however you can offer that invoice for the cash to satisfy those obligations. Using trucking factoring companies is a quick and simple process. The factoring company buys the invoice at a price cut, typically a couple of portion
points less than the stated value of the invoice.
Please call our truck factoring specialists at 1 - 888-239-9162
or E-mail Us
The American Truck Organization
specifies that there are about
195,000 work with transportation
250,000 personal service providers trucking
companies certified to
run in the States that transferred,
according to their latest data of millions
products, supplies and
fundamental materials .
There are a number of typical
groups on our country
highways carrying these
important items to our
shops, manufacturingplants and shipping ports.
Plusfreight invoice factoring
numerous of them and offer their
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
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Bowman Truck and Haul has been in business since the mid 1980s. They've delivered goods for nearly every major industry in the nation and for 20 plus years, business was booming as they've traversed the country in all weather for all clients. During the heady times from 2002 to 2007, Bowman was a top rated accounts receivable mastermind of the trucking industry. Few customers were ever late on bills and those clients who were, were sure to turn in their late payments within a reasonable amount of time. The money was flowing, and times were great.It was just one year later, in 2008, when the economy in the United States took a sharp decline, and both large and small businesses started to notice the squeeze on their pocketbooks: everyone had suddenly gone silent. Business slowed down. And worse yet, Bowman had noticed during the early part of 2008 that though the bulk of their clients were always on time with payments, the few late-bloomers there were, had seemingly started to spread this illness. And as spring turmed to summer and summer into the early days of fall, Kelly Parker, CEO of Bowman felt a chill go down his spine whenever he would look at the weekly A/R reports. There was a growing list of clients who now owed them back debt.He had gone to his administrators and asked them what the problem had been. Were they doing something wrong or different when it came to reaching out to delinquent 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 Bowman money had jumped ship and decided to leave him holding the bag.
. They couldn't afford to pay him their debt, but they could afford a lesser service, maybe. But after doing the cursory research for this and talking to friends in the field, he found that alas, no, customers of Bowman hadn't gone elsewhere. The had just gone!.To Kelly Parker the situation looked desperate. Kelly 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. After work he would confide in his wife, Caroline, and neither were unable to stop the constant worry over the lack of funds.""Lin, I have a really bad feeling,"" he would say with deep woe.""Well, what do you think it is?"" she would ask.Kelly would stare off into the distance, and then slowly close his 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,"" said Kelly. ""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."" Caroline would look at her husband lovingly, and holding his hand would say 'It's such a harsh economy these days and our clients must be having difficulty meeting their responsibilities'.""Caroline was trying so hard to support her husband in these worrying times, while Kelly was weighed down with the worry of how he was going to handle this situation he found himself in.The following day Kelly walked into his office with a spring in his step, determined to call each and every client who owed money to Bowman Truck & Haul. This wasn't really a very efficient way for a Chief Executive to spend his day, and Kelly knew he should be overseeing all the other sides of the business, such as shipments and deliveries, approaching prospective customers, or working with his sales team. 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 Kelly 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 Deloreserley knocked at his door.
""Kelly, can I have a word?"" she queried, standing in the doorway.
""Of course Delores, please come in."" Kelly leaned back in his chair and looked expectantly at Deloreserely.""Well Kelly, this afternoon I did some research, trying to work out how we're going to get out of this mess."" She pulled a small stack of papers from a folder and set them on the desk before him.""Have you ever heard the word factoring?"" she asked.""It does sound 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.""Kelly 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 provides a very broad view.��Kelly replied cautiously ""I see - and what happens then?��Well, after their review, and we�re approved for a factoring contract, we can negotiate terms and conditions. There�s a lot of flexibility depending on the business volume and credit histories. This company tells us what the cost will be to purchase factoring for our accounts receivable. The funding commences once we�ve arrived at an agreement.�Kelly was still a little concerned. He leaned forward in his chair and studied the paperwork very closely.""It sounds too good to be true, Delores,"" he said.""Now, now, I know, I thought the same thing. But really, they have guaranteed us experts that do all the legwork, which would free us up here to focus on our clients in good standing and marketing, all that good stuff. And they're flexible Kelly,"" she underlined a paragraph on the paper before him.""Just how flexible?"" asked Kelly.""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. It only takes 2 to 4 days for this to be figured out. """"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. We need to keep business rolling as normal and every day we�re going unpaid, we�re closer to facing some serious problems in both the short and long term,"" Kelly said.Kelly took in a long slow breath, then looked at his secretary with something like hope in his eyes.""Exactly�. I think this might just be a way out of the trouble we're in with these folks who owe us money.""Kelly took a moment to think about this solution, and agreed with his secretary. The customers who were in debt to Bowman Truck & Haul were professional resources of the company, but they were also long-standing friends. Just because they were experiencing difficulties paying their own bills now, Kelly was very concerned about losing these relationships. Kelly knew that the economy had taken a hit and he knew that it would probably be a long time before things started to look up again. That unknown amount of time could create a disaster situation for both of them if he wasn't careful in how these debtors were handled. Of course he didn't want to lose any more money, but he didn't want to lose business either.""Let me go over this tonight Delores, and thankyou."" Delores nodded, stood up and left the office feeling that she had helped her employer keep on his shirt and hers too.Kelly sat behind his desk and looked over the details Delores had not mentioned in their meeting. What other issues could freight factoring help Bowman 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. Kelly was surprised: it said that his company could get up to fifty percent cash advances on load pickups. Kelly 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 Thomas the good news,"" muttered Kelly to himself.His son-in-law Thomas had liked the idea of Bowman so much and revered his father in law for having such business acumen that only two years before, he had gathered the venture capital to begin his own transportation service company. At that time Kelly knew the struggles Thomas would face, but he still encouraged him to follow his dream. With the faltering economy, if a big fish like Bowman was hurting, a little guy like Thomas was about to catch his death. But, maybe the answer for both of them was in freight factoring, and Kelly was going to find out very soon.A few short months later, after completing the application process, having the legal experts review his credit history, accounts receivable, and statements, finally Kelly was beginning to find his way out of the hole his debtors had created for him.They adopted reasonable factoring purchase contracts and stopped wasting their own precious time trying to collect debts. They took that time and refocused effort to offering competitive prices in new territories. Kelly recalled those dismal months when he wasn't aware of freight factoring, and he shuddered at those memories. He probably wouldn't be in business today had he not learned just in time about freight factoring.
More Trucking Factoring Companies Story Articles
The Future of a Trucking Company, and Factoring The phone was ringing on his desk, and Ronnie Stone just sat there letting it ring. He let his morning coffee cool and left his cigarette to ash itself in the tray, because he is trying to make the biggest decision ever for his trucking company. Stone Trucking Company was at a turning point of growth and Ronnie had to decide if signing with a factoring company was the right way forward.
More than forty years ago Ronnie's father had started this business working as an owner-operator and eventually growing Stone Trucking Company into a fifteen trailer fleet. There had been some hard times when it seemed everything was going to go under and even Ronnie�s mother strapped herself into a cab to make hauls. His father had worked long enough to see the price of hires drop dramatically during the recession and to see the explosion of fuel prices afterwards. Now the company was solely in Ronnie�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. He had employees to pay. They had families and household bills too. Some of the refrigerated trailers were in need of repairs and he felt to stay competitive it was also a good idea to invest in specialized haulers to be ready for the constant requests he was getting for loads of new energy and agriculture equipment. He knew that turning down these requests made Stone Trucking look inefficient and weak in what was currently a strong market.
He knew what his father would have said - 'wait, take your time before adding new technology'. Ronnie allowed himself a good hard chuckle. He remembered when his father was totally against installing GPS units in the cabs. He would say, �Why do you need the voice of some woman to tell you to get off at an exit that has been the same exit that has been there for years?� Also his father had the habit of teasing all the drivers he caught switching into automatic even though driving in automatic was much more efficient though not manly in his father�s eyes. His father days were long gone and technology was actually an important improvement for the business such as having Qualcomm to cut down on fruitless time communicating on the phone for bills of lading.
Ronnie believed a successful man is always thinking of his next step. What would be the next step for Stone Trucking? More importantly, how could he afford it? Funding was all tied up in the mortgage for the office and garage and in the fuel bills. He just finished paying off the small bank loan for installing satellite radio in the trucks for the guys.
But was factoring the answer? There was a lot he didn�t understand about the process. 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. The factoring company gives the trucking business its payment right away which allows the business to have continuous cash flow so it can pay employees, buy fuel, and make repairs for upcoming hauls. Without the assistance of factoring, you have to wait for customers to send you the payment which is often 30 days late. During those thirty days the trucking company can't pay its employees and bills with invoices.
Now it was time for Ronnie 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 friend Ronnie who had a trucking business in Missouri, was run nearly into the ground by a factoring company that charged him the full freight bill on top of the factoring fees. Well, what was the point of going to a factoring company if there was shady business like that going on?
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. Their customer service actually knew things about their company and spoke in nice clear English so he could understand what was being explained. He was quite happy to sign an exclusive contract. He liked the idea of a long term commitment so he knew he wouldn�t have to bother going back and forth to different companies and wasting time filing more forms. Nobody charged him for credit checks and they offered him a fuel advance on the pick-up of the load. Many companies offered a non-recourse factoring program that suited him just fine. Also he was happy to hear how much he was offered in terms of percentages on the freight bills. It was good money.
For Ronnie it was quite a relief to be dealing with the factoring company. They were more personable than those loan managers at the bank. It seemed as though those bank people spoke another language, but these factoring guys knew the trucking business and spoke to him like a client, not like a beggar for a handout. The factoring companies were not interested in his credit nor the financial problems his father had experienced in the past. Factoring was based on the credit of his customers and on their reliability which worked well for Ronnie because he and his father had built up good strong relationships over decades with their list of clients. 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 Stone 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.
Feeling happier now, Ronnie stepped out of his office to advise his secretary to expect to receive the contract very shortly from the factoring company. 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, Ronnie could actually expand Stone Trucking Company further across the country and perhaps even go international into Canada. He was a happy man again knowing that he had just made a decision which would guarantee the success of his business and his sons wouldn't be inheriting a financial mess.
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Trucking Factoring Articles
�So, this is not a loan?� Nathaniel Ross asked as he leaned back in his chair, crossing his legs. The woman who sat across the desk smiled and shook her head.�Not quite,� she stated.Nathaniel was the owner of a small trucking company which had fallen on some hard times recently. Trucking could be a profitable business, and for a little under a decade, it had been for Marcus. He named his business Hunter Trucking, named after Claude and Richard, his two grandfathers. Both of these men had been very hardworking and had set a great example for Marcus.Disaster had struck half a year ago, when two trucks in Marcus�s fifteen truck fleet went down. One was involved in a very costly accident, and the other simply rolled over, and headed to the trucking graveyard. Nathaniel depended on his full fleet, and missing two trucks was devastating . Furthermore, buying a whole new truck and fixing the other simply took more cash than Nathaniel had on hand.Paying of bills in the trucking industry is always a major cause for concern for businesses.
You could go a month or more before bills were completely paid off. This system works okay as long as no problems arise, but if they do, then things can get quite sticky.Nathaniel was an excellent business man, and he certainly hadn't done anything wrong. Certain events had occurred that he couldn't possibly have predicted, and now he had to find a way to protect his business and prevent it from ultimate devastation.And that's why he found himself across the desk from this woman. Nathaniel knew she was employed by a Factoring company and that her name was Louise. 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.Nathaniel nodded. It sounded good to him, almost too good.Louise 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.�Louise nodded. �We get that a lot. Listen, I�d hate to see you lose your company. We know how hard you work, and that you've invested everything in your business. Sometimes you need help. That�s what we�re here for.��Well, I'm very grateful that you came to see me today.��It�s right down the road, usually we do it all online, but I didn�t mind swinging on by today,� Louise said with a smile. �Let�s see what we can do to help you.�And with that they set about making a profile.
Nathaniel filled the form out, with Louise available to help him if he needed it. The completed profile gave Louise and her company all the information they needed on Marcus's business, and with this information they would determine if this business would in fact be 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. Listening as Nathaniel filled out his form, Louise was pretty sure he was a perfect candidate for factoring.Louise took the completed form and placed it in her briefcase. Standing up, she reached over the desk and shook Marcus's hand. He also stood up, and they smiled at each other. Nathaniel walked Louise to the door where they said 'Goodbye', then he went back into 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 shut his eyes. He felt so drained: he had been flailing helplessly for so long, he just knew his business was going to collapse and probably take him with it. But now, after speaking to Louise and learning all about Factoring, he felt such a huge relief, like someone had just lifted a huge weight off his shoulders. He relaxed into his chair, running his hand through his thick black hair with its telling streaks of grey.The long nights, where he couldn�t sleep. The terrifying panic attacks that occurred regardless of where he was. He could feel it all fading 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 still here; he knew this was the right path for him, and he felt proud that he had taken the appropriate steps to sort out his problems.His mind wandered back to the very beginning, when he first started his business. At twenty-two and straight out of school he had opened a restaurant. It had been successful. Offering home cooking in his own hometown, his business had really prospered.But he had gotten bored. His passion didn�t lie with 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 Hunter Trucking. And that's exactly what he did. Once again he built a company from the ground up. He had been successful.Then disaster! The two trucks went down and suddenly his success wasn't looking so guaranteed. He was about to turn fifty. He was concerned that he just didn't have the energy left to try and save the business. But giving up wasn't part of his personality either.
Just the thought of shutting down, cutting his losses, laying off his workers - the whole thing made him physically sick some nights. He didn't want to quit - both for himself and for his staff members.And now it seemed as though he wouldn't have to - all because of Factoring. Marcus's eyes opened, he sat forward in his chair and turned on his computer. He had lots to do. He could be thankful later, for now, it was time to work.
More Trucking Factoring Company Story Articles
Why Trucking Companies Make use of Factoring Firms.
As the owner of your own firm, you may be much more than knowledgeable already of the hardship in making certain that capital matters do not become a difficulty down the line. Anyway, the most awful thing that can in all probability transpire for your company is to find yourself swept up in a long and difficult circumstance that leaves you forever looking for the cash you really need on an continuing manner.
For any sort of company in this predicament, the problem can come for waiting for work to lapse and actually be repaid into your balance. Bill of sales, checks, and the like could take a while to actually to beprocessed which can leave you with momentary capital difficulties. The good news is, there are solutions out there for establishments to investigate-- and one of these is factoring firms.
Factoring companies will, in exchange for your statements, supply you with the money immediately to ensure that you don't need to fret about the lingering time span that could make paying off the bills and obtaining materialsmore complicated. With this form of system, invoice factoring can end up being extraordinarily valuable for countless firms who ought to avoid a cash lure which they have discovered themselves in.
For the reason that, basing on the size of the job, it can take up to 60 days for many businesses to get paid then it's critical to take care of your own back and certainly not leave yourself resources short to pay off the costs. After all, how many business enterprises have two months revenue just lying there to address all their overheads till they get paid?
This is primarily correct of trucking enterprises. They usually deal with lots of statements which means a significant volume of collection period entails company owner themselves. Attempting to get paid out promptly can come to be an incredible headache and this is exactly why you use trucking factoring organizations who are thrilled to help out truckers specifically.
As we all know, trucking is an amazingly huge field with plenty of companies out there working with hundreds of vehicle drivers. Unfortunately, plenty of these drivers wind up in income troubles considering that they are still waiting on work from six weeks ago to actually pay them. When this is the case for a trucking business, turning to factoring companies for help could be the most effective choice left.
This means that a truck organization can pay out the paychecks of the personnel, keep all the trucks filled with fuel and continue to escalate, progress and expand without consistently waiting for the money which is taking too prolonged to come in. Trucking Companies running without a factoring program put in place are leaving themselves at considerable risk, as contenders cash out promptly and continue to broaden.
There's genuinely nothing to be distressed about when it comes to employing a Factoring agency-- they commonly are not like a bank or someone who is going to leave you with a substantial heap of personal debt to repay. You give them authentic invoices from job you have already completed , you are only just quickening the repayment system.
In the United states of America, where trucking establishments thrive, factoring providers are not considered accepting loan of in any capacity. This confidential contract then allows both parties to profit and indulge in a convenient future-- it gives the factoring provider a guaranteed resource of revenue to include in the list and it supplies the trucking firm the required money that they worked hard to earn.
The trucking company presents their statements to the factoring business. The trucking factoring company then receive the installment payments from the trucking company's clients. Factoring has beenaround for hundreds of years and has been employed for several years by numerous varied business-- but none much more so than truckers. While you may lose out on a small part of the money, something like 1-3 % depending on who you collaborate with, it implies that you are getting the finances today and can actually start putting the funds to perform.
Once and for all, an IOU or an invoice is not going to fund spendings, is it? For trucking enterprises when the funds can be very good one day and gone the next, it's up to the drivers to work smartly and to make sure they are leaving themselves with a substantial volume of time and finance to get through the week till they are compensated again.
So the next occasion your trucking company is having some short-term cash flow troubles and you are spending excessive time chasing sluggish paying customers, why not start thinking of using a factoring businesses as a means to get your finances and give yourself a more worry-free future in the eyes of your trucking staff and your bank difference?
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.