Small trucking companies, particularly those who have not been in existence for very long, will frequently find it hard to protect a loan. Banks are often hesitant to lend cash to businesses that don't have a great deal of earnings and assets. They likewise desire proof of the viability of a company and hence need that many operations, particularly little ones, be in business for a particular amount of time prior to they are willing to hand over any money. Since of this, a medium-size business commonly has a couple of cash creating alternatives when requires emerge. One alternative available, however frequently overlooked, is invoice factoring. This is an exceptional way for a small business to obtain money.
How To Burn Off Receivables, Hour-by-Hour - Pick
An Invoice Factoring Company Instead Of A Regular Bank Financing
How to Increase Cash Flow Without Borrowing -Cash Money flow is among the primary reasons companies fail.
At one time or another, every company, even successful ones, have experienced bad money flow.
Money flow does not have to be an issue any ever more. Do not be deceived -- banks are not the only locations you can get financing. Other options are available and you do not have to borrow money. What is trucking factoring ? One solution is called receivable factoring companies. Trucking Factoring is the procedure of offering accounts receivable to a financier instead of waiting to gather the money from the
client. Oh, the Irony- Trucking factoring has a paradoxical distinction:
It is the monetary
foundation of many of America's most effective businesses. Why is this paradoxical ? Since accounts receivable factoring is not taught in business colleges, is rarely discussed in company plans and is fairly unidentified to the majority of most of American company individuals.
Yet it is a financial process that frees billions of dollars every year, enabling countless companies to grow and prosper. Factoring has actually been around for countless years. Invoice Factoring Companies are investors who pay money for the right to receive the future payments on your invoices. An overdue receivable or invoice has value. It is a financial obligation your client has actually agreed pay in the near future. Factoring Principals--Although factoring
offers solely with business-to-business deals, a large portion of the retail company uses a factoring principal. MasterCard, Visa, and American Express all utilize a type of factoring in their retail deals. Utilizing the purest meaning of the word, these large customer finance business are truly simply big Receivable Loan Financing Companies of consumer paper. Consider it: You purchase at Sears and charge
it to your MasterCard. The shop gets paid practically instantly, although you do not pay up until you are ready.
For this service, the charge card company charges Sears a fee (typical common normal charges range from two to four percent of the sale). The Benefits Commercial Factoring can provide numerous benefits to cash-hungry companies. Instead of waiting 30, 60, 90 days or longer for payment on an item that has already been provided, a business can factor
(sell) its receivables for money at a small price cut
off the dollar value of
the invoice. Payroll, marketing efforts, and working capital are just a few of the company requirements that can be met with instant money.
Receivable Factoring Companies offers the means for a producer to renew stock and make even more products to sell: There is no longer a need to await for earlier sales to be paid. FACTORING is not simply a cash management tool for manufacturers: Practically any type company can take advantage of Truck Factoring. Typically, a company 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 bill or today s payroll with a customer s invoice, however you can offer that invoice for the cash to meet those responsibilities. Using trucking factoring companies is a fast and easy process. The factor purchases the invoice at a price cut, usually a couple of percentage
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. Truck Association
mentions that there around
195,000 employees with truck
276,000 personal companies trucking
firms licensed to
operate in the States that transferred,
according to their most current searchings for billions of
items, supplies and
basic products .
There are several usual
teams on our country
roads carrying these
crucial items to our
shops, factories and shipping ports.
Alsofreight bill factoring
many 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
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
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
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.
List of Trucking Companies for Owner/Operators and Company Drivers
Click below to find Trucking Companies in the United States:
Trucking Companies serving to/from points within the United States, categorized by services offered. United States Trucking Companies will be listed under all categories in which they provide specified Trucking Services. To find companies offering specific Trucking Services in the United States, click on the list of services below.
Searching for the right trucking companies to move your freight can be tough, with the large amount of local, regional, and national truck carriers out there. FreightCenter helps make freight shipping simple, finding you the safest, reliable trucking companies every time you ship. Our trucking companies are licensed and insured to carry freight safely and efficiently across the country, no matter the size or type of freight you need to ship.Plus, with the high volume of freight we move, we will work to get you the best freight rates possible. Simply enter in a few details below and you�ll see instant freight rates from all the top trucking companies in one easy screen
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.
Since the mid 1980s Wright 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, Wright 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. Times were great for everyone, and the cash was flowing.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 to a crawl
. And worse yet, Wright 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, Frank Cunningham, CEO of Wright felt a chill go down his spine whenever he would look at the weekly A/R reports. The numbers of clients who owed him back debt were growing.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? By his bookkeepers records, this wasn't 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 Wright 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 Wright hadn't gone elsewhere. The had just gone!.This current state-of-affairs was causing Frank Cunningham to have some very restless nights. Frank 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 Brenda and shake his head in frustration.
""I have a bad feeling, Lin,"" he'd sadly say to his wife.""What could you do differently?"" she would ask.Frank 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 somewhere, a haze would form over his fleet and the vast number of vehicles would disappear to but a few. What could cause this ultimate death spiral of business?""I know what it is,"" said Frank. ""I've relied too long on the profits I receive from invoices alone. For too long I've been allowing our clients to let their accounts become overdue."" All Brenda could do was hold his hand and look at him tenderly. 'We know it's a difficult economy at the moment - perhaps it will take a while for people to get on top of their bills'.""Brenda was trying so hard to support her husband in these worrying times, while Frank was weighed down with the worry of how he was going to handle this situation he found himself in.The following day Frank walked into his office with a spring in his step, determined to call each and every client who owed money to Wright 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. Even though he was doing something to help his company, he knew he had folks on salary to do just this thing. A waste of time - a waste of money - he had the best intentions, but all the while Frank 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 Ethelerley knocked at his door.
""Can I have a word with you Frank?"" she asked standing in the doorway.
""Of course Ethel, please come in."" Frank relaxed back into his chair and looked up at Ethelerley.""Well Frank, 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 it?"" he said.""Well,"" she began, ""It�s actually quite simple really.
Basically, factoring invoices means that we would get paid immediately for the loads we haul.""""Immediately?"" Frank interrupted.""Immediately, yes"" she added, ""In a nutshell, it's pretty easy. We can have an expert account manager review our numbers and help us complete a company profile. Included in the profile would be the investigation of our accounts receivable aging reports, our current customers' credit limits etc.. Additionally, the factoring will help to determine the creditworthiness of our customers independent of their credit history with our business. It provides a very broad view.��Frank 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.�Frank leaned forward and reviewed the paperwork closely.""It sounds too good to be true, Ethel,"" he said.""Yes, I know; that's exactly what I thought at the beginning. 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 Frank,"" she drew a circle around a paragraph on the document before him.""Just how flexible?"" he asked.""It seems that they personalize their factoring charges so that the amount they're prepared to work with is commensurate with our client's debt and our needs. Apparently they can figure this all out in two to four days.
""""That sounds pretty good, seeing as we tapped ourselves out with bank loans last year to repair the fleet and money sure is tight. 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 Frank.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.""Frank thought about this and agreed with Ethelerley. The customers who were in debt to Wright Truck & Haul were professional resources of the company, but they were also long-standing friends. They didn't want to throw away these relationships because they were having trouble paying their bills now. Frank 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. If he didn't handle these debtors in the right way, that unknown amount of time could spell disaster for all of them. Of course he didn't want to lose any more money, but he didn't want to lose business either.""Well, let me think about this tonight Ethel, thank you."" Ethel nodded, satisfied with her work, and she left the office feeling quite content in the knowledge that she had helped Frank keep the shirt on his back, and possibly hers too.Frank stayed at his desk for a long time, looking over the details they hadn't discussed during their meeting. What other issues could freight factoring help Wright with? Running his pencil down the sheet, he noted that the freight factoring company could assist with fuel costs, fuel advances, and fuel discount cards. In fact, Wright could receive up to fifty-percent cash advances upon load pick-ups. Frank 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 Keith the good news,"" muttered Frank to himself.His son-in-law Keith had liked the idea of Wright 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. Frank knew then what struggles Keith would face but he encouraged him nonetheless. With the economy the way it was, if an established company such as Wright was struggling then the little guys, like Keith, 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, Frank 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. Frank looked back on the dismal months of life before freight factoring and almost shuddered at the thought. If Frank 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 Albert Rogers let the phone ring on his desk. His morning coffee cooled and his cigarette smoked away in the tray: Albert is thinking, and pondering the biggest decision he's ever had to make for his trucking business. Rogers Trucking Company was at a turning point of growth and Albert had to decide if signing with a factoring company was the right way forward.
More than forty years ago Albert's father had started this business working as an owner-operator and eventually growing Rogers Trucking Company into a fifteen trailer fleet. Yes, they had survived some very difficult times when it appeared like they might go under, and even Albert's mother had jumped into the cab at times 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. But now things were different: the company was in Albert's hands and he needed to ensure that this business would be left in great 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. Every time he had to turn down a request, Rogers Trucking looked weak in a very strong market.
His father would have told him to wait and to take his time adding on new technology. Albert allowed himself a good hard chuckle. He remembered when his father was totally against installing 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.
Albert knew he was right in his forward thinking. What would be the next step for Rogers Trucking? And how would he be able to afford it? Funding was all tied up in the mortgage for the office and garage and in the fuel bills. Thankfully he'd just finished paying off the bank loan for the installation of satellite radio in the trucks.
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. Factoring companies buy your invoices and manage your accounts receivable for a certain percentage of the invoiced amount. 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 the assistance of factoring, you have to wait for customers to send you the payment which is often 30 days late. In those 30 days, a trucking company can�t pay its bills and employees in invoices.
Now it was time for Albert 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. Worse still, if the customer defaulted on payment, the factoring company takes it out of the money supposedly coming to you! He'd even heard about some companies putting you onto a sliding percentage scale regardless of any previously signed contracts for possibly 3% or 7%, and there you are now with 10% coming as a charge 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. Well, what was the point of going to a factoring company if there was shady business like that going on?
However, it all turned out to be very simple. 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 didn�t mind signing 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. 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. He was more than happy with the figures he was offered in percentage terms on the freight bills. It was good money.
For Albert 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. Factoring was based on the credit of his customers and on their reliability which worked well for Albert 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 Rogers 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.
Albert stepped out of his office to let his secretary know to expect the arrival of the factoring contract shortly. He felt exhilarated by the new possibilities that would make the future of the company fun again and put the stress of the difficult times behind him. He suddenly realized that, with this new cash flow, he could actually expand Rogers Trucking Company and who knows, move into Canada, which had always been his dream. 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 It is not a loan?� Erik Garcia asked as he leaned back in his chair, crossing his legs. The woman who sat across the desk smiled and shook her head.�No, not exactly,� she said.Erik Garcia owned a small trucking company, and his business had recently fallen on difficult times. Trucking could be a profitable business, and for a little under a decade, it had been for Karl. His company was called Ellis Trucking, named after both of his grandfathers, Jerome and Jeremy. They had both been hardworking men, and had done a lot to make Erik the same.Disaster had struck half a year ago, when two trucks in Karl�s fifteen truck fleet went down. One was a roll-over and ended up in the trucking graveyard: the other was involved in a serious and costly accident. The financial security of Karl'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 Erik 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.Erik wasn�t a bad owner, and he hadn�t messed up. 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. Erik knew she was employed by a Factoring company and that her name was Melissa. Erik had come across her company as he sat in his office late one night, pouring over the internet for some solution to his problem long after his employees had gone home.Melissa explained. �it is really not a loan at all: we actually buy 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.Erik agreed. It sounded perfect - perhaps too good?.Melissa laughed. �You look like you don�t believe me,� she chuckled.�Oh no, I do: it just sounds too good to be true. I thought I was going to lose my company.�Melissa nodded. �We get that a lot. There's no way we want to see you lose your business. You work hard, you�ve put everything you can into it. We all need help sometimes. That�s what we�re here for.��Well, I'm very grateful that you came to see me today.��No problem - I'm just down the road. We normally do it all online but I was happy to come and visit you today,� said Melissa with a smile. �Let's work out a solution to your problem.�And right there and then they created a business profile. Erik completed the form, with Melissa offering advice as needed.
The profile filled Melissa and her company in on Karl�s company, and would help them determine if he was suitable for factoring. In truth, not all companies were. Some were beyond factoring special brand of help, and sometimes things weren�t even dire enough for it. As Erik completed his form, Melissa listened to his story and she felt quite sure he would be the ideal candidate for Factoring.When the form was done Melissa took it and slid it into her briefcase. She then stood, reached across the desk and shook Karl�s hand. He stood before they shook as well, and then smiled. They said their goodbyes and Erik 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 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. Talking to Melissa though, learning about factoring, it felt like a weight had been lifted from his shoulders. He relaxed into his chair, running his hand through his thick black hair with its telling streaks of grey.All those long, sleepless nights. The sudden panic attacks, not matter where he was. He could feel it all fading away. He wasn�t out of the woods yet, there was still a lot of work to be done, but he could feel it. He was there, he was on the right path, and he was working to make things right.Erik couldn�t help but think back to when he had first started the business. At twenty-two and straight out of school he had opened a restaurant. It had been really successful. Home cooking in his hometown, and he had done very well.But he had gotten bored. He wasn't passionate about the food industry. He thought long and hard, and then he decided to sell the restaurant. He took six months off, and during that time he decided to create Ellis Trucking. And that's exactly what he did. For the second time in his short life he created 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 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.
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. Erik 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.
More Trucking Factoring Company Story Articles
Why Trucking Firms Use Factoring Firms.
As the manager of your own establishment, you may perhaps be more than mindful already of the challenge in making certain that cash flow concerns do not become a difficulty down the line. Anyway, the most disappointing thing that can possibly develop for your firm is to find yourself swept up in a long and challenging circumstance that leaves you forever looking for the funds you require on an continuing manner.
For virtually any firm in this predicament, the issue can come for waiting for work to clear up and actually be paid out into your account. Bill of sales, checks, and the like could take a long time to actually to be taken care of which can leave you with temporary available resources issues. Luckily, there are alternatives out there for firms to check out-- and just one of these is factoring agencies.
Factoring agencies will, in trade for your accounts, give you with the resources immediately to ensure that you don't need to fret about the delaying duration which could make paying off the expenses and obtaining toolsmore challenging. With this form of setup, invoice factoring can become tremendously practical for plenty of companies who need to get out of a cash pitfall which they have gotten themselves in.
Simply because, depending on the volume of the task, it can take up to 60 days for some business enterprises to get compensated then it's essential to cover up your own back and definitely not leave yourself resources short to pay off the bills. After all, how many establishments have two months revenue just occupying there to handle all their spendings until they make money?
This is especially true of trucking firms. They often tend to handle lots of invoices which means a substantial amount of collection period entails company owner themselves. Attempting to get paid off promptly can turn into an unbelievable struggle and this is exactly why you employ truck factoring companies who are happy to help out truckers specifically.
As we all determine, trucking is an exceptionally large industry with a lot of agencies out there hiring hundreds of vehicle drivers. Regrettably, many of these drivers end up in income dilemmas due to the fact that they are still expecting work from six weeks ago to actually pay them. When this is the case for a trucking organization, turning to factoring agencies for support may be the most effective alternative left.
This implies that a truck business can pay off the salaries of the crew, keep all the trucks filled with fuel and continue to escalate, thrive and expand without consistently waiting for the money which is taking too prolonged to come in. Trucking Businesses operating without a factoring system used are leaving themselves at notable hazard, as rivals cash out promptly and continue to broaden.
There's absolutely very little to be worried about when it comes to using a Factoring agency-- they usually are not like a banking company or a person who is going to leave you with a huge stack of personal debt to pay back. You give them genuine invoices from work you have already completed , you are simply expediting the repayment system.
In the Usa, where trucking firms prosper, factoring enterprises are not considered accepting loan of in any capacity. This private agreement then allows both parties to make money and experience a worry-free future-- it gives the factoring firm a guaranteed resource of earnings to put into the list and it supplies the trucking firm the required cash that they sweated to generate.
The trucking company provides their accounts to the factoring agency. The trucking factoring company then collect the installment payments from the trucking company's clients. Factoring has been in existence for centuries and has been employed for long times by plenty of different markets-- but none more so than truckers. While you might lose out on a small part of the money, something like 1-3 % depending upon who you deal with, it indicates that you are obtaining the cash today and can actually start putting the cash to work.
After all, an IOU or an invoice is not actually going to fund costs, is it? For trucking enterprises when the cash can be excellent one day and gone the next, it's up to the drivers to work prudently and to make certain they are leaving themselves with a notable measure of time and money to get through the week until they are handed over once more.
So the next occasion your trucking enterprise is having some short-term cash flow troubles and you are devoting excessive time chasing slowly paying customers, why not begin thinking of utilizing a factoring businesses as a manner to get your cash and give yourself a more worry-free future in the eyes of your trucking staff and your bank difference?
Bank loans are an extremely traditional way for a business to get financing. While these loans are handy they are not available to every business. As an example, a newly formed business may not have the required assets to qualify for a bank loan, and even if they did, it's usual practise for a bank to use the business itself as collateral. This means that if you default on your loan payment you could lose your entire business. In addition, while you apply for a certain loan amount, that is all the financing you are entitled to. Once the loan is paid off, you can then apply for another loan if the need arises.
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 money you can receive is based on the amount of money you have earned and the accounts receivable you are willing 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
While not every business can take advantage of Trucking Factoring account financing (you have to have a business that has account receivables) for those that can use this type of financing there are several distinct benefits.
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 makes it easier for fledgling businesses to get the financing they need through a Trucking Factoring company (as long as their accounts receivables are in good order) then from a bank, who may not feel that you have been in business long enough to be worth the risk of issuing you a loan.
3. You'll receive the 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. With a bank, there are vast amounts of paperwork, then the loan has to be underwritten, which can take months before you actually see the loan if it is approved.
4.Interest is Paid Up Front. With a bank loan interest continues to build, and this has to be paid the whole time you have a business loan; however with a Trucking Factoring company there is no interest - they take it right off the top by deducting it from the total amount of receivable accounts. 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 from the above, there are some great benefits to financing through a Trucking Factoring company, and not through a traditional bank loan. 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 good at collecting these debts, saving you the time and effort that you need to devote to your growing company.
In addition, since the Trucking Factoring company evaluates the credit quality of your customers prior to purchasing the accounts receivable you gain valuable information into which customers are likely to pay and which ones are not so likely to pay.A Trucking Factoring company is not the only method of gaining access to finance for the running and growing of your business, however it does offer a financing option well worth considering.