Truck Factoring is helpful for numerous reasons. It allows a truck company to raise money without getting brand-new debt. While debt is in some cases needed, most truck companies would choose to raise cash without borrowing money. Debt is dangerous, and when it cannot be repaid, assets can be repossessed. If the financial obligation is huge enough, it could even force a freight broker firm out of business.
Great New Discovery Kills Cash Flow Problems Quick! - Choose
A Freight�Brokerage Factoring Company Instead Of A Traditional Bank Financing
Exactly how to Enhance Cash Flow Without Loaning -Cash Money flow is one of the main reasons businesses fail.
At one time or another, every company, even effective ones, have experienced poor cash flow.
Cash flow does not have to be a problem any ever more. Do not be deceived -- banks are not the only locations you can get financing. Other solutions are offered and you do not have to borrow. What is trucking factoring ? One solution is called buy receivables. Trucking Factoring is the procedure of selling invoices to a financier rather than waiting to gather the money from the
client. Oh, the Irony- Trucking factoring has an ironic distinction:
It is the monetary
backbone of many of America's most effective businesses. Why is this paradoxical ? Since commercial factoring is not instructed in business colleges, is rarely mentioned in business strategies and is fairly unknown to the majority of most of American company individuals.
Yet it is a financial process that frees billions of dollars every year, allowing thousands of companies to grow and prosper. Invoice Factoring has been around for countless years. Receivable Financing Businesses are investors 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 customer has actually to pay in the near future. Factoring Principals--Although factoring
offers exclusively with business-to-business transactions, a big portion of the retail company uses a factoring principal. MasterCard, Visa, and American Express all use a type of factoring in their retail deals. Using the purest meaning of the word, these large consumer finance companies are truly just large Receivable Loan Financing Companies of customer paper. Think about it: You purchase at Sears and charge
it to your MasterCard. The store gets paid practically immediately, although you do not make payment up until you are prepared.
For this service, the charge card business charges Sears a fee (typical common normal fees range from two to four percent of the sale). The Advantages Invoice Factoring can provide numerous advantages to cash-hungry companies. Instead of waiting 30, 60, 90 days or longer for payment on an item that has already been delivered, a company can factor
(sell) its receivables for cash at a small discount
off the amount of
the invoice. Payroll, advertising efforts, and working capital are just a few of the company needs that can be met with instant money.
Buy Receivables offers the ways for a producer to renew stock and make more items to sell: There is no longer a requirement to wait for earlier sales to be paid. Receivable Loan Financing is not simply a cash management device for producers: Practically any type business can take advantage of Receivable Financing. Typically, a company that extends credit
will have 10 to 20 percent
of its yearly sales bound in invoices at any given time. Think for a moment about exactly how much is tied up in 60 days' worth of invoices: You can not pay the power bill or today s payroll with a customer s invoice, but you can sell that invoice for the money to satisfy those obligations. Using truck factoring companies is a quick and easy procedure. The factor buys the invoice at a discount, typically a couple of percentage
points less than the face value of the invoice.
Please call our freight bill factoring experts at 1 - 888-239-9162
or E-mail Us
The United states Trucking Association
specifies that there are about
200,000 truck drivers with transportation
300,000 personal providers trucking
companies licensed to
operate in the States that transferred,
according to their most current searchings for billions of
items, materials and
fundamental materials .
There are several typical
groups on our nation
roadways transferring these
crucial products to our
stores, factories and shipping ports.
Moreoverfreight invoice factoring
many of them and offer their
receivable loan 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.
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.
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
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 Dixon Truck & Haul have been successfully running their freight business. They've delivered goods for nearly every major industry in the nation and for 20 plus years, business was booming as they've traversed the country in all weather for all clients. During the heady times from 2002 to 2007, Dixon 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
. Worse still, it was noticed by Dixon in early 2008 that even though most of their loyal customers were on time with their payments, there were a few late bloomers who were starting to spread the disease. And as spring turmed to summer and summer into the early days of fall, Randall Mitchell, CEO of Dixon 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 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 Dixon hadn't gone elsewhere. They had just gone home.This current state-of-affairs was causing Randall Mitchell to have some very restless nights. He had employees to pay, goods to ship, trucks to maintain and overhead that was almost unbearable when compared against the lack of funds that were coming in. In the evenings he would discuss his concerns with his wife, Amber, and still find no relief from the worry and frustration.
""I have a bad feeling, Lin,"" he'd sadly say to his wife.""What could you do differently?"" she would ask.Randall 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 on earth was happening to create the death of his business?""I know what it is,"" said Randall. ""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."" Amber 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'.""Amber was trying so hard to support her husband in these worrying times, while Randall was weighed down with the worry of how he was going to handle this situation he found himself in.The next day Randall strolled into his office and was determined to sit down and make every phone call to every client who had owed Dixon money. 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 Randall 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 Gertrudeerley knocked at his door.
""Can I have a word with you Randall?"" she queried, standing in the doorway.
""Of course Gertrude, please come in."" Randall relaxed back into his chair and looked up at Gertrudeerley.""Well Randall, 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 of factoring?"" Gertrudeerley asked.""It sounds vaguely familiar. What is factoring""? he asked.""Well,"" she began, ""It�s actually quite simple really.
So basically, factoring invoices would enable us to get paid on the nose for loads that we haul.""""Immediately?"" Randall interrupted.""Yes, immediately,"" she continued, ""It's actually very simple. We can have an expert account manager review our numbers and help us complete a company profile. That profile will also include investigating our accounts receivable aging reports, our existing customer credit limits and so on. 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.��I see,� Randall said. �And then what?��Well, after their review, and we�re approved for a factoring contract, we can negotiate terms and conditions. You'll be surprised at the amount of flexibility, all dependent upon the credit histories and business volume.
This company tells us what the cost will be to purchase factoring for our accounts receivable. Once we arrive at a mutual agreement, the funding begins.�Leaning forward, Randall studied the documents very closely.""I don't know, Gertrude - it just sounds too good to be true"", Randall said quietly.""Yes, I know; that's exactly what I thought at the beginning. But think about it, Randall: 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. And they're flexible Randall,"" she drew a circle around a paragraph on the document before him.""Just how flexible?"" asked Randall.""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.
""""That sounds pretty good, seeing as we tapped ourselves out with bank loans last year to repair the fleet and money sure is tight. 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,"" Randall said.He took a deep breath and looked at his secretary with something she recognized as hope.""Exactly�. This could be the answer to our prayers: it will solve many problems we're facing due to these unpaid debts.""Randall thought about this and agreed with Gertrudeerley. The customers who were in debt to Dixon 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. He was well aware that the economy was in a bad way and that it might be quite a while before things started picking up. 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. He didn't want to lose business but he also didn't want to lose any more money.""Let me go over this tonight Gertrude, and thankyou."" Gertrude stood up and left Randall's office, with the nice feeling of knowing that she may just have solved a very serious problem.Randall 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 Dixon 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. In fact, Dixon could receive up to fifty-percent cash advances upon load pick-ups. Randall 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 Christian the good news,"" Randall muttered to himself.His son-in-law Christian had liked the idea of Dixon 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. At that time Randall knew the struggles Christian would face, but he still encouraged him to follow his dream. With the faltering economy, if a big fish like Dixon was hurting, a little guy like Christian was about to catch his death. But, an antidote may have been found in freight factoring and Randall was soon to find out.A few short months later, after completing the application process, having the legal experts review his credit history, accounts receivable, and statements, finally Randall was beginning to find his way out of the hole his debtors had created for him.They adopted reasonable factoring purchase contracts and stopped wasting their own precious time trying to collect debts. They took that time and refocused effort to offering competitive prices in new territories. Randall looked back on the dismal months of life before freight factoring and almost shuddered at the thought. Had he missed the boat on this one, he probably wouldn't be in business today.
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Factoring in the Future of a Trucking Business: A Story The phone was ringing on his desk, and Jared Little 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. Little Trucking Company was at a turning point of growth and Jared had to decide if signing with a factoring company was the right way forward.
More than forty years ago Jared's father had started this business working as an owner-operator and eventually growing Little 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 Jared'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. But now things were different: the company was in Jared's hands and he needed to ensure that this business would be left in great shape for his sons.
To move Little Trucking Company ahead into the future, he needed a steady cash flow but there was just not enough money to go around. His employees needed to be paid. They all have families and the usual household bills. A few of the refrigerated trailers really needed some maintenance, and in order to stay competitive he really wanted to invest in specialized haulers to meet the increasing requests for loads of agricultural and energy equipment. Every time he had to turn down a request, Little Trucking looked weak in a very strong market.
He knew what his father would have said - 'wait, take your time before adding new technology'. Jared chuckled, thinking about his father. His father had been against placing GPS units in the cabs. He would say, �Why do you need the voice of some woman to tell you to get off at an exit that has been the same exit that 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.
Jared knew he was right in his forward thinking. What would be the next step for Little 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? If he was being honest, he didn't really understand how it all worked. It sounded a lot like ninth grade algebra which just didn�t feel like it belonged as part of 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. 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 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.
Jared had to really consider what his next step was going to be. Jared had heard that there were companies that charged for same day money transfers and would only advance a percentage of the money owed to your company while holding the rest in a private account if they didn�t get their bill payment within 60 or so 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 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 didn�t mind signing 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. 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.
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 Jared because he and his father had created a very strong and loyal list of clientele over the years. So he knew they would understand when the factoring company contacted them for the invoices. His clients wouldn�t think poorly of Little 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.
Jared 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. With the capabilities of this new cash flow, Jared could actually expand Little Trucking Company further across the country and perhaps even go international into Canada. 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?� Chad Andrews asked as he leaned back in his chair, crossing his legs. The woman who sat across the desk smiled and shook her head.�Not quite,� she stated.Chad was the owner of a small trucking company which had fallen on some hard times recently. Certainly the trucking business can be an extremely profitable venture, and for many years it had been that way for Joshua. His company was called Meyer Trucking, named after both of his grandfathers, Chad and Kyle. They had both been hardworking men, and had done a lot to make Chad the same.Six months ago disaster struck Joshua'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. Chad depended on his full fleet, and missing two trucks was devastating . Furthermore, buying a whole new truck and fixing the other simply took more cash than Chad had on hand.A big problem a lot of trucking companies came across was how bills were paid in the industry. Waiting a month or longer for bills to be paid was quite normal. This system works okay as long as no problems arise, but if they do, then things can get quite sticky.Chad was an excellent business man, and he certainly hadn't done anything wrong. Things had happened that he couldn't have predicted, and he had to figure out a way to keep his business from hurting, or even going under.That�s where the woman across the desk came in. Her name was Rita 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.She sat there now, and 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.Chad agreed. It sounded good to him, almost too good.The woman laughed. �I'm not sure that you 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.�Rita nodded. �Yes, we get a lot of that. Listen, I�d hate to see you lose your company. We know how hard you work, and that you've invested everything in your business. We all need help sometimes. That�s what we�re here for.��Well, I'm very grateful that you came to see me today.��It�s right down the road, usually we do it all online, but I didn�t mind swinging on by today,� Rita said with a smile. �Let�s see what we can do to help you.�And right there and then they created a business profile. Chad completed the form, with Rita offering advice as needed.
The profile filled Rita and her company in on Joshua�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 Chad filled out his form, Rita was pretty sure he was a perfect candidate for factoring.When the form was done Rita took it and slid it into her briefcase. She then stood, reached across the desk and shook Joshua�s hand. He stood before they shook as well, and then smiled. They said their goodbyes and Chad walked her to the door, and then returned to 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. But now, after speaking to Rita 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. He could feel it all fading away. He knew it wasn't over yet and that there was still a way to go, but he could just feel everything start to change for him. He was there, he was on the right path, and he was working to make things right.Chad 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 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 long and hard, and then he decided to sell the restaurant. He took half a year off, and in that time he thought to start Meyer 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.And then the trucks went down, and his success looked to be in flux. He was nearing fifty. He was concerned that he just didn't have the energy left to try and save the business. 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. Joshua's eyes opened, he sat forward in his chair and turned on his computer. He had things to do. He could be thankful later, for now, it was time to work.
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The key reasons why Trucking Corporations Employ Factoring Companies.
As the owner of your own establishment, you may be more than aware already of the difficulty in making sure that cash flow issues do not become a problem down the line. After all, the worst thing that can in all probability occur for your business is to find yourself swept up in a long and perplexing situation that leaves you forever searching for the funds you need to have on an continuing manner.
For pretty much any company in this situation, the complication can come for waiting for work to clear up and actually be brought in into your bank account. Statements, checks, and the like could take some time to actually to be taken care of which can certainly leave you with short-term available resources difficulties. Gratefully, there are approaches out there for businesses to check out-- and one of these is factoring providers.
Factoring companies will, in exchange for your bill of sales, give you with the money now to ensure that you don't need to worry about the lingering phase that could make paying the bills and purchasing materialsmore difficult. With this style of setup, invoice factoring can end up being remarkably practical for a lot of firms who need to get out of a cash trap which they have found themselves in.
Because, basing on the volume of the job, it can take up to 60 days for several enterprises to get paid then it's significant to cover up your own back and definitely not leave yourself money short to settle the expenses. After all, how many firms possess two months profits just lying there to handle all their bills until they get paid?
This is most especially correct of trucking enterprises. They usually take care of lots of invoices which means a huge amount of collection period involves company owner themselves. Seeking to get paid off promptly can come to be an extraordinary inconvenience and this is the reason why you employ trucking factoring companies who are thrilled to help out truckers primarily.
As most of us know, trucking is an amazingly massive field with numerous firms out there utilizing hundreds of vehicle drivers. However, several of these drivers land up in money dilemmas considering that they are still expecting work from six weeks previously to actually pay them. When this is the circumstance for a truck organization, choosing factoring providers for solutions may be the most suitable alternative left.
This indicates that a truck organization can pay out the wages of the personnel, keep all the cars filled with gas and continue to surmount, progress and expand without always waiting for the resources which is taking too long to come in. Trucking Business enterprises operating without a factoring system put in place are leaving themselves at critical hazard, as competitors cash out rapidly and go on to expand.
There's absolutely not a thing to be stressed about when it comes to employing a Factoring agency-- they typically aren't like a financial institution or someone who is going to leave you with a large mound of financial obligation to repay. You give them authentic invoices from job you have already wrapped up , you are simply expediting the payment system.
In the Usa, where trucking firms prosper, factoring companies are not considered getting a loan in any capacity. This confidential settlement then allows both groups to make money and delight in a comfortable future-- it gives the factoring firm a warranted resource of income to include in the list and it furnishes the trucking company the needed funds that they worked hard to obtain.
The trucking enterprise bestows their invoices to the factoring firm. The trucking factoring agency then obtain the installment payments from the trucking company's customers. Factoring has been in existence for centuries and has been used for decades by plenty of varying sectors-- but none exceeding 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 means that you are obtaining the cash today and can actually start setting the cash to function.
After all, an IOU or an invoice is absolutely not going to cover bills, is it? For trucking enterprises when the cash can be very good one day and gone the next, it's up to the vehicle 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 again.
So the next period your trucking establishment is having some temporary capital issues and you are shelling out a bit too much time chasing slow paying customers, why not begin thinking about using a factoring businesses as a way to get your finances and give yourself a more convenient future in the eyes of your trucking crew and your bank difference?
Bank loans are an extremely traditional way for a business to get financing. These loans can be a life-saver, but they're not always 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. Of course, once that loan has been re-paid, you can always re-apply for another loan.
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. 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 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. 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. One of the main benefits of this kind of financing is that your business credit rating and your personal credit rating won't be affected. 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. 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 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. 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 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. You'll receive the 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. 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. 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. In addition, there are other benefits that a Trucking Factoring company can offer you, outside the scope of a 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. 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.
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.