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Medium-Size freight companies, especially those who have actually not been in existence for really long, will typically find it difficult to secure a loan. Banks are frequently reluctant to lend cash to companies that do not have a great deal of earnings and possessions. They likewise want proof of the practicality of a company and therefore need that many operations, especially little ones, been around for a particular quantity of time before they are ready to turn over any money. Since of this, a medium-size company often has a couple of money producing choices when requires arise. One option offered, however commonly ignored, is invoice factoring. This is an excellent way for a small business to obtain money.
Six Types of Companies - Which Group Are You In? - Pick
A Freight Bill�Factoring Company Instead Of A Regular Bank Financing
Exactly how to Increase Money Flow Without Loaning -Cash Money flow is one of the main reasons companies fail.
At one time or another, every company, even effective ones, have experienced poor cash flow.
Money flow does not have to be an issue any ever more. Do not be fooled -- banks are not the only places you can get financing. Other options are offered and you do not have to borrow money. Exactly what is truck factoring ? One solution is called transportation factoring. Truck Factoring is the procedure of offering invoices to an investor rather than waiting to collect the money from the
customer. Oh, the Irony- Trucking factoring has an ironic distinction:
It is the monetary
foundation of many of America's most effective companies. Why is this paradoxical ? Since truck factoring is not taught in business colleges, is rarely discussed in company plans and is fairly unknown to the majority of most of American business individuals.
Yet it is a financial procedure that releases up billions of dollars every year, allowing countless companies to grow and succeed. Receivable Loan Funding has been around for thousands of years. Receivable Funding Companies are financiers who pay cash for the right to receive 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 deals, a large portion of the retail company utilizes a factoring principal. MasterCard, Visa, and American Express all utilize a type of factoring in their retail deals. Using the purest definition of the word, these large consumer finance companies are really just big Commercial Factoring Businesses of customer paper. Consider it: You make a purchase at Sears and charge
it to your MasterCard. The store gets paid almost instantly, although you do not pay up until you are ready.
For this service, the credit card business charges Sears a fee (typical common normal charges range from two to four percent of the sale). The Advantages Receivable Loan Funding can provide numerous benefits to cash-hungry business. Rather than wait 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 cash at a small discount
off the amount of
the invoice. Payroll, marketing efforts, and working capital are just a few of the company needs that can be satisfied with instant money.
Transportation Factoring provides the means for a manufacturer to renew inventory and make even more products to sell: There is no longer a requirement to wait for earlier sales to be paid. FACTORING is not just a cash management device for producers: Almost any type company can benefit from Staffing Factoring. Generally, a business that extends credit
will have 10 to 20 percent
of its yearly sales bound in accounts receivable at any given time. Think for a minute 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 sell that invoice for the cash to satisfy those obligations. 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 face value of the invoice.
Please call our truck factoring specialists at 1 - 888-239-9162
or E-mail Us
The United states Transportation Organization
states that there around
200,000 work with freight trucking
250,000 personal providers trucking
firms accredited to
run in the States that carried,
according to their most current data of millions
items, materials and
standard products .
There are several typical
groups on our nation
roadways transporting these
vital products to our
stores, manufacturingplants and ports.
countless of them and offer their
accounts receivablesfinancing services
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
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.
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.
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.
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.
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.
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
Watson Truck & Haul have been operating their business since the mid 1980s. 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, Watson 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. Cash was flowing and times were good for all.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, Watson 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. Spring changed to summer, summer changed to fall, and the CEO of Watson, Wayne Miller, was beginning to feel very uncomfortable indeed whenever he looked at their weekly Accounts Receivable reports. The number of clients who were late in their payments was continuing to grow.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. Perhaps he was losing his customers to his competitor, who seemed to offer very low prices with no guarantee of quality or performance, and these clients who were in debt to his company had possibly disappeared leaving him stranded. 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 Watson hadn't gone elsewhere. They had just gone home.The situation looked dire to Wayne Miller. Wayne 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. In the evenings he would discuss his concerns with his wife, Theresa, and still find no relief from the worry and frustration.
""Lin, I have a really bad feeling,"" he would say with deep woe.""What could you do differently?"" she would say.Wayne 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 on earth was happening to create the death of his business?""I think I know what it could be,"" said Wayne. ""For way too long I've been relying solely on profits received from invoices. I've let too many of our customers go too long without paying on their bills."" Theresa 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'.""Theresa was trying so hard to support her husband in these worrying times, while Wayne was weighed down with the worry of how he was going to handle this situation he found himself in.The next day Wayne strolled into his office and was determined to sit down and make every phone call to every client who had owed Watson money. This wasn't really a very efficient way for a Chief Executive to spend his day, and Wayne 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 Wayne was realising just how much trouble he was in.Poor Wayne spent the whole morning trying in vain to contact his debtors: they promised to call back, dodged his calls, or made small interest-only payments. He was beginning to feel quite despaired when his secretary knocked on his door.
""Wayne, can I have a word?"" she queried, standing in the doorway.
""Of course Leslie, please come in."" Wayne leaned back in his chair and looked expectantly at Leslieerely.""Well, I did a little searching this afternoon and tried to figure out a way out of this mess Wayne."" She pulled a small stack of papers from a folder and set them on the desk before him.""Have you ever heard of factoring?"" she asked.""It does sound vaguely familiar. What is factoring""? he asked.""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?"" Wayne interrupted.""Yes, immediately,"" she continued, ""It's actually very simple. 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.��I see,� Wayne said. �And then what?��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. 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.�Wayne was still a little concerned. He leaned forward in his chair and studied the paperwork very closely.""I don't know, Leslie - it just sounds too good to be true"", Wayne said quietly.""Yes, I know; that's exactly what I thought at the beginning. But think about it, Wayne: 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, Wayne,"" she underlined a paragraph on the paper before him.""Just how flexible?"" asked Wayne.""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 Wayne.Wayne 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.""Wayne thought about this and agreed with Leslieerley. The clients who owed them money were long standing friends and professional resources of Watson. Wayne wasn't prepared to lose these relationships just because they were having financial issues at the moment. Wayne knew only too well that the whole economy was floundering, and that it was not going to change overnight. 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.""Let me go over this tonight Leslie, and thankyou."" Leslie stood up and left Wayne's office, with the nice feeling of knowing that she may just have solved a very serious problem.Wayne stayed at his desk for a long time, looking over the details they hadn't discussed during their meeting. He wondered if there might be other problems freight factoring could help Watson 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. In fact, Watson could receive up to fifty-percent cash advances upon load pick-ups. Wayne 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.""Well, I'll have to tell Richard about this,"" Wayne muttered to himself.Richard is Wayne's son-in-law, and he really admired the ideas behind Watson, so much so that only two years before he had started his own transportation service business. At that time Wayne knew the struggles Richard would face, but he still encouraged him to follow his dream. With the economy the way it was, if an established company such as Watson was struggling then the little guys, like Richard, 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.A few months later after going through the entire application process and having the experts review his accounts receivable, credit history and statements, Wayne found himself beginning to dig his way out of the hole his delinquent account holders had created for him.They adopted reasonable factoring purchase contracts and stopped wasting their own precious time trying to collect debts. They used that time to refocus their efforts in being competitive in new territories. Wayne 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
Factoring in the Future of a Trucking Business: A Story Cecil Johnston let the phone ring on his desk. His morning coffee cooled and his cigarette smoked away in the tray: Cecil is thinking, and pondering the biggest decision he's ever had to make for his trucking business. Johnston Trucking Company was at a turning point of growth and Cecil had to decide if signing with a factoring company was the right way forward.
More than forty years ago Cecil's father had started this business working as an owner-operator and eventually growing Johnston 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 Cecil's mother had jumped into the cab at times 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 Cecil�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 all have families and the usual household bills. 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, Johnston Trucking looked weak in a very strong market.
He knew what his father would have said - 'wait, take your time before adding new technology'. Cecil 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.
Cecil knew he was right in his forward thinking. How would he take Johnston 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 like a ninth grade math problem and he wondered how this would fit into 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 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.
Cecil had to really consider what his next step was going to be. 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! 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 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?
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. Customer service appeared to understand their company and explained in clear, concise English exactly how it all worked. 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. 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 was good money.
For Cecil it was quite a relief to be dealing with the factoring company. They were extremely helpful and more personable than the bank staff. 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 Cecil 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 have any problems, nor would they think poorly of Johnston Trucking, because the factoring companies handle themselves in such a polite and professional manner, similar to the way his father had managed the business in the past.
Feeling happier now, Cecil 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. He suddenly realized that, with this new cash flow, he could actually expand Johnston Trucking Company and who knows, move into Canada, which had always been his dream. 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?� Dustin Bryant asked as he leaned back in his chair, crossing his legs. The woman sitting across the desk from Dustin smiled at him, shaking her head.�Not quite,� she said.Dustin Bryant owned a small trucking company, and his business had recently fallen on difficult times. Certainly the trucking business can be an extremely profitable venture, and for many years it had been that way for Clifford. He named his business Coleman Trucking, named after Anthony and Theodore, his two grandfathers. They had both been hardworking men, and had done a lot to make Dustin the same.Six months ago disaster struck Clifford's business when two out of his fleet of fifteen trucks were taken off the road.
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 Clifford'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 Dustin had on hand.A big problem a lot of trucking companies came across was how bills were paid in the industry. 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.Dustin 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. Her name was Holly and she worked for a factoring company. 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.Holly 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.Dustin agreed. It sounded good to him, almost too good.The woman 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.�Holly smiled, agreeing. �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.��In any case, thank you for coming to see me.��No problem - I'm just down the road. We normally do it all online but I was happy to come and visit you today,� Holly said with a smile. �Let�s see what we can do to help you.�And with that they set about making a profile.
Dustin filled the form out, with Holly available to help him if he needed it. The profile filled Holly and her company in on Clifford�s company, and would help them determine if he was suitable for factoring. In truth, not all companies were. Some businesses are beyond the help of a Factoring company, while other businesses weren't in enough financial stress to warrant it. As Dustin completed his form, Holly listened to his story and she felt quite sure he would be the ideal candidate for Factoring.Holly took the completed form and placed it in her briefcase. Standing up, she reached over the desk and shook Clifford's hand. He also stood up, and they smiled at each other. Dustin walked Holly to the door where they said 'Goodbye', then he went back into his office.His employees were there, seven who worked in the office, and as he sat behind his desk once more he heard the familiar clack of fingers on keyboards, the electronic whine of the copy machine.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 Holly 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.The long nights, where he couldn�t sleep. The sudden panic attacks, not matter where he was. Already he could feel all the stress start to drain 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.Dustin 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 he had gotten bored. His passion didn�t lie with 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 Coleman 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 he couldn�t give up. 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. Dustin opened his eyes, sat forward, turned his computer on. He had lots to do. He could be thankful later, for now, it was time to work.
As the operator of your own business enterprise, you may be more than wary already of the difficulty in making certain that cash flow issues do not become a predicament down the line. Anyway, the most horrible thing that can in all probability transpire for your establishment is to find yourself involved in a long and troublesome condition that leaves you forever searching for the money you are in need of on an ongoing basis.
For any company in this situation, the trouble can come for waiting for work to lapse and actually be brought in into your account. Statements, checks, and the like could take a while to actually to beprocessed which may leave you with temporary available resources problems. The good news is, there are solutions out there for companies to explore-- and just one of these is factoring agencies.
Factoring firms will, in exchange for your invoices, give you with the cash money today to ensure you don't have to worry about the delaying time frame that could make paying the expenses and purchasing toolsmore tough. With this kind of system, invoice factoring can come to be tremendously useful for several businesses who have to get out of a cash lure which they have found themselves in.
Because, basing on the volume of the work, it can take up to 60 days for several companies to get compensated then it's vital to cover your own back and definitely not leave yourself cash short to pay the expenses. After all, how many businesses have two months income just occupying there to cover all their expenses until they get paid?
This is especially true of truck agencies. They generally deal with good deals of statements which means a significant amount of collection period concerns business owner themselves. Striving to get paid off promptly can turn into an incredible difficulty and this is exactly why you work with trucking factoring providers who are happy to help out truckers mainly.
As we all understand, trucking is an incredibly enormous business with countless agencies out there handling hundreds of drivers. However, numerous of these drivers end up in money predicaments simply because they are still expecting work from six weeks back to actually pay them. When this is the case for a trucking agency, depending on factoring firms for aid could be the most effective alternative left.
This means that a trucking company can pay the wages of the workers, keep all the cars refilled with gas and continue to surmount, progress and expand without constantly waiting for the resources which is taking too long to come in. Trucking Firms working without a factoring program applied are leaving themselves at substantial hazard, as contenders cash out quickly and go on to expand.
There's absolutely nothing at all to be troubled about when it comes to working with a Factoring establishment-- they usually are not like a bank or somebody who is going to leave you with a massive stockpile of liability to repay. You give them authentic invoices from job you have already finished , you are simply speeding the repayment system.
In the Usa, where truck establishments do well, factoring establishments are not considered borrowing in any capacity. This confidential settlement then enables both groups to make money and take pleasure in a good future-- it provides the factoring agency a warranted asset of cash flow to include in the list and it provides the trucking company the needed finances that they worked hard to gain.
The trucking establishment provides their statements to the factoring agency. The trucking factoring firm then take the payments from the trucking company's customers. Factoring has been in existence for centuries and has been used for long times by several varying 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 upon who you deal with, it signifies that you are receiving the cash today and can actually start setting the resources to operate.
After all, an IOU or an invoice is not actually going to finance overheads, is it? For trucking agencies when the funds can be fantastic one day and gone the next, it's up to the vehicle drivers to work sensibly and to guarantee they are leaving themselves with a significant volume of time and money to get through the week until they are compensated once more.
So the next instance your trucking company is enduring some short-term cash flow troubles and you are shelling out an excessive amount of time chasing sluggish paying customers, why not begin taking into consideration using a factoring companies as a method to get your money and give yourself a more at ease future in the eyes of your trucking crew and your bank dividend?
Traditional Bank Loans
Finance through a bank loan is the normal, or traditional, way of financing your business. While these loans are handy they are not 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. 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. The finance you receive from the Trucking Factoring company is determined by money already earned by your business, but 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. In the event that your business fails, you wouldn't have to be concerned about someone coming after your personal or your business assets in order to pay off a loan. The debt goes onto your credit report with a bank loan, with only one missed payment adversely affecting your business credit: it would also affect your ability to secure insurance, and may reflect on your personal credit rating as well.
2. There's no collateral required. Another benefit of using a Trucking Factoring company instead of a traditional loan is that you aren't required to provide collateral to the Trucking Factoring company in order to secure financing, because the company �buys� the accounts receivables; not loans you money based on them. Plus, the state of your credit rating is not an issue; however the Trucking Factoring company will run a credit check on your clients whose accounts receivable are being offered for financing. 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. Once the Trucking Factoring company assures itself that the customers in your accounts receivable are likely to pay their debt, the money is usually in the account within 24 hours. 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. 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 you don't have to worry about monthly loan repayments, and you don't have to worry about the amount of interest payable, because all the money in the account is yours to spend.
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.