To be successful as a business, there should be enough money on hand to pay for basic operating costs. Adhering to this basic principle is more difficult than it seemsif every time you perform a service, you’re left waiting for payment. It is important in any industry — especially in the trucking industry — to maintain steady cash flow, but with fuel expenditures, worker wages, fleet management costs, equipment upgrades and maintenance, as well as administration costs, it can be an uphill battle. This is why many trucking companies are using invoice factoring to help them access working capital when they need it.
A Straightforward Process
The factoring process is simple: your trucking business enters into an agreement with the factoring company, and then you make your deliveries as normal. You send a copy of your invoice to the factor, and once they have purchased the invoice from youand given you your cash in advance (minus a nominal percentage held in reserve and a small factoring fee that varies depending on your plan) they will then collect from your customer on your behalf. Once they have done so, the reserve is returned to you.
Low One-Time Fees
Unlike the interest rates that accumulate with bank loans, invoice factoring (also known as freightfactoring) usually comes with a minor, one-time fee. Cursory research will reveal the many benefits of freight factoring services but when you work with a factoring company that specializes in the trucking industry, you’ll have access to plans that are custom tailored to enterprises of your precise size and scope. Flat fee factoring, for example, starts as low as 1.59%. Flexible factoring is also available for carriers with fast-paying customers and comes with a rate of 0.49% for 10 days. A factoring line of credit, on the other hand,is perfect for larger fleets and starts at 0.022% per day.
The qualification requirements of freight factoring are also simple. Your business must:
- Be a carrier or freight broker
- Work with credit-worthy commercial clients
- Have up to date documentation, licenses and authorities
- Generate lien-free freight bills
Be sure to look for an experienced freight factoring partner that offers the lowest rates in the industry, while also providing dedicated customer service and free credit checks as part of their accounts receivable management services. Accutrac Capital, for example, exclusively serves trucking companies, and is aware of the particular hurdles of the industry.
Reliable factoring companies provide financial solutions to:
- High growth companies without sufficient working capital
- Companies experiencing a change of ownership
- Start up operations
- Businesses in transition
- Companies unable to secure loans from traditional lenders such as banks
- Businesses experiencing a tough year
- Companies that have not yet transformed accounts receivable into collateral
if you own a trucking company and you’re looking to turn the obstacle of overdue invoices into an immediate resource, you should learn more about freight factoring immediately. Contact a reputable factoring partner that will help walk you through the terms and conditions. Once you find the right partner and choose the right plan, you’re well on your way to positive cash flow
Track All Your Accounts With Personal CapitalPersonal Capital lets you see all of your accounts in one convenient place. Sign up now for free.
More from my site
Latest posts by Mr. 4HWD (see all)
- What GIS Is, and Why You Are Hearing So Much About It Lately - September 20, 2018
- 4 Reasons Engineers Burn Out — and 5 Ways They Can Avoid It - September 20, 2018
- Self-Care: Why Being Good to Yourself is Good for Your Business - September 19, 2018