In these economic times, people who have taken the risk of operating (and especially starting) a small trucking company have many reasons to be stressed. While building a pool of repeat clients and obtaining all the necessary capital to allow for growth and success, there is very little room for financial error. As a consequence, encountering clients who are unable or refusing to pay in a timely manner can be a serious detriment to your company. Using truck factoring as a financing option can greatly increase the chances of your small trucking company’s success.
Truck Factoring Helps Keep Cash Flowing for Small Trucking Companies
The direct flow of money into your trucking company is the most important element in its success. Whether you collect from a customer or not, you’re paying for your truck, fuel, insurance, maintenance, and other overhead expenses. It is essential to match your payment for services with the service itself, or at some point you have to turn business away.
After delivering a load, you can expect to wait the industry average of 43 days to get paid on your freight invoice.
One slow pay or uncollectible invoice could make it impossible to purchase fuel to haul that next load. Consider using the services of a truck factoring company to lighten the load instead of a traditional banking loan.
Truck Factoring Helps Close the Gap
Between Slow Payments and Steady Cash Flow
Many trucking company owners try to address their cash gap by trying to get business financing from their bank. However, they soon learn that banks seldom provide business loans to small transportation companies. Unfortunately, a business loan is not an option for most logistics and transportation companies. So, what is the solution? In many cases, trucking companies have an option that is better that a business loan: truck factoring. This type of factoring can provide logistics companies with the financing they need to meet their current expenses and grow. Compared to bank financing, truck factoring is generally easy to obtain and can be setup rather quickly.
Truck Factoring Makes more Sense For a Small Trucking Company
Throughout modern corporate finance history, when a business has needed money to continue operations, the most commonly sought funding source has been the extension of credit or loans from a bank. While this is a viable solution in some cases, it makes less sense for a small trucking company than does truck factoring.
For a small trucking company, truck factoring will be the better alternative. It can provide the equivalent of a quick pay by using an intermediary. The intermediary, called a freight factoring company, advances you funds against your freight bill. The transaction is settled once your client pays the invoice in full.
Truck Factoring Services from Pay4freight.com
There are many freight factoring companies to choose from, but Pay4Freight.com’s focus is to work directly with small trucking companies and truck owner-operators. Pay4Freiight provides you with the cash flow you need, allowing you to compete equally in the transportation marketplace. Their specialists take pride in providing you the best non-recourse freight factoring services in the industry. Call Pay4freight.com today and leave your slow paying invoice problems behind!