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Factoring invoices is advantageous for a number of factors. It permits a trucking business to raise money without acquiring new financial obligation. While financial obligation is often needed, the majority of trucking companies would prefer to raise money without obtaining money. Debt is high-risk, and when it can't be paid back, properties can be repossessed. If the financial obligation is big enough, it may even compel a trucking firms out of business.
Six Types of Companies - Which Group Are You In? - Choose
An Accounts Receivable Factoring Company Instead Of A Typical Bank Financing
How to Enhance Cash Flow Without Loaning -Cash Money flow is one of the main reasons businesses fail.
At one time or another, every business, even successful ones, have actually experienced poor cash flow.
Cash flow does not have to be an issue any more. Do not be fooled -- banks are not the only places you can get financing. Other options are available and you do not have to borrow money. What is trucking factoring ? One option is called accounts receivable factoring. Trucking Factoring is the procedure of offering accounts receivable to an investor instead of waiting to gather the money from the
customer. Oh, the Irony- Trucking factoring has a paradoxical distinction:
It is the monetary
foundation of many of America's most successful companies. Why is this paradoxical ? Since factoring is not instructed in business colleges, is seldom discussed in company plans and is relatively unidentified to the majority of most of American business people.
Yet it is a monetary procedure that releases up billions of dollars every year, allowing thousands of businesses to grow and succeed. Receivable Loan Funding has been around for thousands of years. Commercial Factoring Companies are financiers who pay money for the right to get the future payments on your invoices. An unpaid receivable or invoice has value. It is a financial obligation your client has to pay in the near future. Factoring Principals--Although factoring
offers solely with business-to-business deals, a big portion of the retail business uses a factoring principal. MasterCard, Visa, and American Express all utilize a type of factoring in their retail deals. Using the purest meaning of the word, these big consumer finance business are really just big Factoring Businesses of consumer paper. Consider it: You purchase at Sears and charge
it to your MasterCard. The store gets paid practically immediately, although you do not make payment 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 Benefits Commercial Factoring can provide many benefits to cash-hungry companies. Rather than wait 30, 60, 90 days or longer for payment on a product that has currently been provided, a company can factor
(sell) its receivables for money at a small discount
off the amount of
the invoice. Payroll, advertising efforts, and working capital are simply a few of the company needs that can be met with instant cash.
Accounts Receivable Factoring provides the ways for a manufacturer to renew stock and make even more items to offer: There is no longer a need to await for earlier sales to be paid. Receivable Loan Financing is not just a money management device for manufacturers: Practically any kind company can benefit from Truck Factoring. Generally, a company that extends credit
will have 10 to 20 percent
of its yearly sales tied up 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 this week s payroll with a customer s invoice, however you can offer that invoice for the money to satisfy those obligations. Using trucking factoring companies is a quick and easy procedure. The factor purchases the invoice at a discount, usually a couple of portion
points less than the face value of the invoice.
Please call our freight bill factoring specialists at 1 - 888-239-9162
or E-mail Us
The American Truck Association
mentions that there around
205,000 employees with freight trucking
250,000 personal service providers trucking
companies licensed to
run in America that transferred,
according to their most current searchings for billions of
products, materials and
basic products .
There are numerous usual
groups on our country
roadways transferring these
vital products to our
shops, manufacturing facilities and ports.
countless of them and offer their
accounts receivablesfinancing 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
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.
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.
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.
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
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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
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.
Shaw 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 boom times from 2002 to 2007 Shaw Truck & Haul was the mastermind of a top-rated accounts receivable in 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 to a crawl
. And worse yet, Shaw 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, Leroy Bennett, CEO of Shaw felt a chill go down his spine whenever he would look at the weekly A/R reports. The number of clients who were late in their payments was continuing to grow.He had gone to his administrators and asked them what the problem had been. Were they doing things different, or wrong, when it came to collecting overdue accounts? When checking his bookkeeper's records this was definitely not the case. He thought perhaps that he was losing clients to a competitor who offered rock-bottom prices with little to no guarantee of quality performance, and that the folks who owed Shaw 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. So he did the necessary research and, after discussions with friends in the same field, he realised that no, his customers hadn't gone anywhere else. The had just gone!.This current state-of-affairs was causing Leroy Bennett to have some very restless nights. There were goods to ship, employees to pay, trucks to repair and maintain, and continuous overheads that were very extensive when compared to the funds (or lack of) that were incoming. In the evenings he would discuss his concerns with his wife, Clara, 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.Leroy 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,"" Leroy said. ""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 Clara 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'.""Leroy knew his wife meant well, but he knew that he was responsible for too many people to sit idly by, waiting for the sun to peak over the clouds.The following day Leroy walked into his office with a spring in his step, determined to call each and every client who owed money to Shaw 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. Wasting money, wasting time - even with the best of intentions, Leroy knew that he was in trouble.
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 Audreyerley knocked at his door.
""Can I have a word with you Leroy?"" she asked standing in the doorway.
""Sure thing Audrey, come on in."" Leroy leaned back in his chair and looked expectantly at Audreyerely.""Well Leroy, 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. Basically, factoring invoices means that we would get paid immediately for the loads we haul.""Leroy interrupted ""Immediately?"".""Immediately, yes"" she added, ""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.. Additionally, the factoring will help to determine the creditworthiness of our customers independent of their credit history with our business. It�s a broad view.��I see,� Leroy said. �And then what?��Following the completion of their review and once we've been approved for a contract with the factoring company, then we sit down to negotiate conditions and terms. There�s a lot of flexibility depending on the business volume and credit histories. This company tells us what the cost will be to purchase factoring for our accounts receivable. We come to an agreement and the funding starts pouring out.�Leroy was still a little concerned. He leaned forward in his chair and studied the paperwork very closely.""It sounds too good to be true, Audrey,"" 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 Leroy,"" she drew a circle around a paragraph on the document before him.""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. 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,"" Leroy said.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.""Leroy thought about this and agreed with Audreyerley. The clients who owed them money were long standing friends and professional resources of Shaw. They didn't want to throw away these relationships because they were having trouble paying their bills now. Leroy knew only too well that the whole economy was floundering, and that it was not going to change overnight. 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 Audrey, and thankyou."" Audrey stood up and left Leroy's office, with the nice feeling of knowing that she may just have solved a very serious problem.Leroy 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 Shaw Truck & Haul 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. Leroy was surprised: it said that his company could get up to fifty percent cash advances on load pickups. As a man who hated binding contracts with no room to breathe, he was pleased to see that this factoring company would not make him sign a long term contract, would not make him pay any sign up fees and there was no minimum volume required.""Well, I'll have to tell Douglas about this,"" muttered Leroy to himself.Douglas is Leroy's son-in-law, and he really admired the ideas behind Shaw, so much so that only two years before he had started his own transportation service business. Leroy knew then what struggles Douglas would face but he encouraged him nonetheless. With the faltering economy, if a big fish like Shaw was hurting, a little guy like Douglas was about to catch his death. But, an antidote may have been found in freight factoring and Leroy was soon 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, Leroy 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. Leroy looked back on the dismal months of life before freight factoring and almost shuddered at the thought. 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 The phone was ringing on his desk, and Gilbert Franklin 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. Franklin Trucking Company had reached a turning point and he now had to make a decision as to whether he should sign up with a factoring company, and indeed if this would be a good or regrettable decision for his business.
Gilbert�s father had started as an owner-operator and had grown Franklin Trucking Company into a fifteen trailer fleet over forty years. There had been some hard times when it seemed everything was going to go under and even Gilbert�s mother strapped herself into a cab to make hauls. His father had lived long enough to witness the price of hires drop during the recession and watch the eruption of fuel prices afterwards. But now things were different: the company was in Gilbert'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 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, Franklin Trucking looked weak in a very strong market.
He knew what his father would have said - 'wait, take your time before adding new technology'. Gilbert 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?� 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.
Gilbert knew he was right in his forward thinking. What would be the next step for Franklin Trucking? And how would he be able to afford it? Business funding was tied up in fuel bills and the mortgage for the garage and office. Thankfully he'd just finished paying off the bank loan for the installation of satellite radio in the trucks.
He wondered about factoring - was this the answer for him? 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. 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 this assistance, you're placed in the position of waiting for payment from your customers, and this can often be thirty days, or more. During those thirty days the trucking company can't pay its employees and bills with invoices.
Now it was time for Gilbert to do his homework. He had heard of companies charging for same day money transfers, advancing a percentage of the money owed to your business, while the rest is held in a private account if the bill wasn't paid within sixty or more days. Plus it was worse still if the customer didn�t pay up at all because then the factoring company would take it right out of the money supposed to be coming to you! Through the grapevine, he�d also heard about how some companies suddenly slipped you onto a sliding scale of percentages even if you had already signed a lengthy contract for maybe 3% or 7% so there you are with 10% coming as a cost to you out of the freight bill. His colleague, Ronnie, who owned a trucking company in Missouri, was nearly destroyed by a factoring company who charged him the full freight bill on top of the fees for factoring. He knew he would have to be very careful if he was to avoid any of these shady companies?
But it turned out to be quite easy. All the factoring companies he researched were open about their business practices and very friendly on the phone when he called. 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. In fact, he was quite pleased with the idea of a long-term contract because he knew this was a one-off and he wouldn't have to keep going back and forth to different companies. He was not charged for a credit check, and in addition he was offered a fuel advance on the pick-up of a load. 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.
It was really refreshing dealing with the factoring people. 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. All the factoring company was interest in was the credit of his customers and on their reliability: this worked great for Gilbert because he and his father had created a very strong and loyal list of clientele over the years. He knew immediately that there would not be any problems when they were contacted by the factoring company regarding their invoices. His clients wouldn�t think poorly of Franklin 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.
Gilbert stepped out of his office to let his secretary know to expect the arrival of the factoring contract shortly. There was a new bounce is his step now: he knew instinctively that this new step would raise the future of his company to a new and higher level, and that all the stress from the past could now be put behind him. With the capabilities of this new cash flow, Gilbert could actually expand Franklin 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 It is not a loan?� Fred Robinson asked as he leaned back in his chair, crossing his legs. The woman sitting across the desk from Fred smiled at him, shaking her head.�Not quite,� she stated.Fred Robinson 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 Alfred. He named his business Knight Trucking, named after Peter and Dwight, his two grandfathers. Both of these men had been very hardworking and had set a great example for Alfred.Six months ago disaster struck Alfred'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 Alfred's company relied on his full fleet on fifteen being on the road, and missing two trucks was just devastating . In addition, he just didn't have the available cash to buy a new truck, plus repair the other one.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. In the long run, this wasn�t an issue, but if problems arose, you could find yourself in trouble.Fred 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. Fred knew she was employed by a Factoring company and that her name was Courtney. 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 is really not a loan at all: we actually buy your accounts receivable. We're not giving you finance to be repaid later: we're purchasing something from you, and when you can you can buy it back. That way we�re protected from a complete loss, but you�re protected from the outrageous fees you would find in a loan from the bank.Fred agreed. It sounded good to him, almost too good.Courtney laughed. �I'm not sure that you believe me,� she said.�Oh no, I do: it just sounds too good to be true. I actually thought I might end up losing my business.�Courtney nodded. �Yes, we get a lot of that. Listen, I�d hate to see you lose your company. You work hard, you�ve put everything you can into it. Sometimes you need help. 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,� Courtney said with a smile. �Let�s see what we can do to help you.�And with that they set about making a profile.
Fred completed the form, with Courtney offering advice as needed.
The profile filled Courtney and her company in on Alfred�s company, and would help them determine if he was suitable for factoring. Unfortunately, not all companies are. Some were beyond factoring special brand of help, and sometimes things weren�t even dire enough for it. Listening as Fred filled out his form, Courtney was pretty sure he was a perfect candidate for factoring.When the form was done Courtney took it and slid it into her briefcase. She then stood, reached across the desk and shook Alfred�s hand. He stood before they shook as well, and then smiled. Fred walked Courtney 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 shut his eyes. He had felt so helpless lately, was sure the whole thing was collapsing, and would take him with it. But now, after speaking to Courtney 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.All those long, sleepless nights. The terrifying panic attacks that occurred regardless of where he was. Already he could feel all the stress start to drain away. He wasn�t out of the woods yet, there was still a lot of work to be done, but he could feel it. 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.Fred 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. Offering home cooking in his own hometown, his business had really prospered.But it wasn't what he really wanted to do. 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 Knight 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. Alfred's eyes opened, he sat forward in his chair and turned on his computer. He had things to do. There would be plenty of time later to be thankful, but for now it was time to get back to work.
More Trucking Factoring Company Story Articles
Precisely why Trucking Agencies Use Factoring Firms.
As the owner of your own business, you may well be much more than aware already of the challenge in making sure that capital matters do not become a problem down the line. Anyway, the most awful thing that can quite possibly transpire for your firm is to find yourself swept up in a long and problematic condition that leaves you forever trying to find the money you need to have on an recurring manner.
For any kind of establishment in this scenario, the dilemma can come for waiting for work to lapse and actually be repaid into your account. Bill of sales, checks, and the like could take some time to actually to be taken care of which may leave you with momentary capital troubles. Luckily, there are solutions out there for industries to delve into-- and among these is factoring companies.
Factoring firms will, in substitution for your statements, supply you with the cash immediately so that you don't need to worry about the lingering phase which could make paying out the bills and purchasing toolsmore difficult. With this style of system, invoice factoring can become exceptionally useful for a lot of businesses who need to avoid a cash pitfall which they have gotten themselves in.
Due to the fact that, depending on the volume of the work, it can take up to 60 days for several companies to get paid then it's critical to blanket your own back and not leave yourself money short to settle the bills. After all, how many establishments possess two months cash flow just lying there to cover all their overheads until they make money?
This is specifically correct of trucking enterprises. They often handle lots of invoices which means a substantial amount of collection time entails business owner themselves. Attempting to get compensated promptly can end up being an unbelievable trouble and this is precisely why you make use of truck factoring organizations who are thrilled to help out truckers exclusively.
As we all realize, trucking is an incredibly large market with numerous organizations out there employing hundreds of operators. Sadly, many of these drivers end up in income problems considering that they are still waiting for work from six weeks ago to actually compensate them. When this is the situation for a trucking firm, resorting to factoring firms for aid maybe the ideal option left.
This signifies that a truck corporation can provide the wages of the crew, keep all the cars loaded with gas and continue to escalate, flourish and expand without consistently waiting for the money which is taking too long to come in. Trucking Companies working without a factoring program used are leaving themselves at critical threat, as contenders cash out rapidly and proceed to grow.
There's absolutely nothing at all to be troubled about when it comes to working with a Factoring company-- they usually are not like a financial institution or an individual who is going to leave you with a massive pile of personal debt to repay. You give them legitimate invoices from work you have already accomplished , you are only facilitating the repayment system.
In the United States, where truck agencies flourish, factoring enterprises are not considered borrowing in any capacity. This confidential settlement then allows both parties to benefit and take pleasure in a convenient future-- it provides the factoring agency a guaranteed resource of earnings to put into the list and it furnishes the trucking firm the needed funds that they worked hard to earn.
The trucking enterprise presents their invoices to the factoring firm. The trucking factoring company then take the payments from the trucking company's clients. Factoring has been all around for hundreds of years and has been utilized for many years by plenty of varying industries-- but none more so than truckers. While you may lose out on a small part of the money, something like 1-3 % depending upon who you collaborate with, it implies that you are receiving the funds today and can actually begin putting the resources to do work.
After all, an IOU or an invoice is not actually going to finance spendings, is it? For trucking enterprises when the hard earned cash can be good one day and gone the next, it's up to the drivers to work smartly and to make sure that they are leaving themselves with a considerable quantity of time and money to get through the week till they are paid for once again.
So the next period your trucking company is bearing some short-term cash flow issues and you are putting in excessive time chasing sluggish paying clienteles, why not start looking into employing a factoring companies as a means to get your cash and give yourself a more comfortable future in the eyes of your trucking staff and your bank balance?
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. Plus, the amount you apply for through the bank is the actual amount that you are going to receive. 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 do not give loans, and the money you get from the Trucking Factoring company does not put you in debt. Rather the financing you receive from a Trucking Factoring company is based on money your business has already earned, but have not yet received. The Trucking Factoring company purchases your accounts receivable, or part of them, for a certain percentage of their value - this is normally about 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 you have set up Trucking Factoring account it continues as long as you wish it too and the amount of money available to you even can grow as your business grows, giving you the ready cash you need to meet your own obligations.
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. There is no debt. Since the Trucking Factoring company actually buys your accounts receivable you don't actually incur debt like you do with a bank loan. 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. 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. Receive Your Money Faster. With a Trucking Factoring company you can actually get the money you need faster. 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 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, 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 main benefit is that once you've sold your accounts receivable to the Trucking Factoring company, you are free from having to collect money owed by your customers. The Trucking Factoring company takes over that chore, since it is now their money to collect. 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.