Small freight businesses, specifically those who have actually not been around for extremely long, will frequently discover it tough to protect a loan. Banks are commonly hesitant to lend cash to companies that do not have a lot of earnings and assets. They likewise desire evidence of the viability of a business and thus need that a lot of operations, specifically little ones, been around for a specific quantity of time before they are prepared to hand over any cash. Since of this, a medium-size company frequently has few money producing options when needs emerge. One option available, however often neglected, is receivable Financing. This is an outstanding way for a small company to get cash.
How To Get Rich With - Choose
A Factoring Company Instead Of A Traditional Bank Funding
Exactly how to Increase Cash Flow Without Loaning -Cash Money flow is one of the primary reasons companies fail.
At one time or another, every business, even successful ones, have actually experienced poor money 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 funding. Other options are available and you do not have to borrow. What is truck factoring ? One solution is called accounts receivable factoring. Trucking Factoring is the procedure of offering accounts receivable to a financier instead of waiting to collect the cash from the
customer. Oh, the Irony- Truck factoring has a paradoxical distinction:
It is the monetary
backbone of numerous of America's most effective businesses. Why is this paradoxical ? Since trucking factoring is not instructed in business colleges, is rarely discussed in business strategies and is relatively unknown to the majority of most of American company people.
Yet it is a financial procedure that frees billions of dollars every year, allowing countless businesses to grow and succeed. Invoice Factoring has actually been around for countless years. Trucking Factoring Businesses are financiers who pay money 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 agreed pay in the near future. Factoring Principals--Although factoring
deals solely with business-to-business transactions, 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. Utilizing the purest meaning of the word, these big consumer finance business are truly simply large Invoice Factoring Businesses of customer paper. Think about it: You make a purchase at Sears and charge
it to your MasterCard. The store makes money almost instantly, although you do not pay until you are prepared.
For this service, the credit card company charges Sears a charge (typical common normal charges vary from two to four percent of the sale). The Benefits Invoice Factoring can provide numerous benefits to cash-hungry companies. Instead of waiting 30, 60, 90 days or longer for payment on a product that has actually already been delivered, a company can factor
(sell) its receivables for cash at a little discount
off the dollar value of
the invoice. Payroll, marketing 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 replenish stock and make 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 cash management tool for producers: Almost any type company can benefit from Receivable Financing. Generally, a company that extends credit
will have 10 to 20 percent
of its yearly sales tied up in invoices at any given time. Think for a moment about how much is tied up 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 sell that invoice for the money to meet those obligations. Using trucking factoring companies is a quick and simple procedure. The factor purchases the invoice at a discount, usually a couple of portion
points less than the stated value of the invoice.
Please call our trucking factoring specialists at 1 - 888-239-9162
or E-mail Us
The United states Transportation Organization
mentions that there are about
205,000 employees with freight trucking
300,000 personal service providers trucking
firms certified to
operate in the States that carried,
according to their latest listings of millions of
items, supplies and
standard materials .
There are several usual
teams on our country
roadways transferring these
crucial items to our
stores, manufacturing facilities and shipping ports.
Plusfreight bill factoring
many of them and offer their
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
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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.
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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 Bennett 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, Bennett 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 Bennett 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. Spring changed to summer, summer changed to fall, and the CEO of Bennett, Aaron Wade, was beginning to feel very uncomfortable indeed whenever he looked at their weekly Accounts Receivable reports. There was a growing list of clients who now owed them back debt.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? By his bookkeepers records, this wasn't 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. 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. They had just gone home.To Aaron Wade the situation looked desperate. 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, Jane, and still find no relief from the worry and frustration.
""Lin, I have a really bad feeling,"" he'd sadly say to his wife.""What could you do differently?"" she would ask.Aaron would stare off into the distance, and then slowly close his eyes. In his mind he could clearly see the fleet of trucks purchased over the many years. He could see them traveling, bringing goods to all of his clients. 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 know what it is,"" said Aaron. ""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."" Jane 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'.""Aaron 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 next day Aaron strolled into his office and was determined to sit down and make every phone call to every client who had owed Bennett 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. 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. Wasting money, wasting time - even with the best of intentions, Aaron knew that he was in trouble.
Poor Aaron 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.
""Aaron, can I have a word?"" she asked standing in the doorway.
""Of course Kimberly, please come in."" Aaron relaxed back into his chair and looked up at Kimberlyerley.""Well Aaron, this afternoon I did some research, trying to work out how we're going to get out of this mess."" She opened up a folder she had been carrying and pulled out a small wad of papers, placing them on the desk in front of him.""Have you ever heard the word factoring?"" Kimberlyerley asked.""It sounds vaguely familiar. What is it?"" he said.""Well,"" she began, ""It�s actually quite simple really.
Basically, factoring invoices means that we would get paid immediately for the loads we haul.""Aaron interrupted ""Immediately?"".""Immediately, yes"" she added, ""It's actually very simple. We can have an expert account manager review our numbers and help us complete 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.��Aaron replied cautiously ""I see - and what happens then?��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. This company tells us what the cost will be to purchase factoring for our accounts receivable. The funding commences once we�ve arrived at an agreement.�Aaron leaned forward and reviewed the paperwork closely.""It sounds too good to be true, Kimberly,"" he said.""Now, now, I know, I thought the same thing. But think about it, Aaron: 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 Aaron,"" she underlined a paragraph on the paper before him.""How flexible?"" he asked.""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,"" said Aaron.Aaron took in a long slow breath, then looked at his secretary with something like hope in his eyes.""Precisely�. I think this might just be a way out of the trouble we're in with these folks who owe us money.""Aaron thought about this and agreed with Kimberlyerley. The clients who owed them money were long standing friends and professional resources of Bennett. Just because they were experiencing difficulties paying their own bills now, Aaron was very concerned about losing these relationships. Aaron knew that the economy had taken a hit and he knew that it would probably be a long time before things started to look up again. 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 Kimberly, and thankyou."" Kimberly stood up and left Aaron's office, with the nice feeling of knowing that she may just have solved a very serious problem.Aaron sat behind his desk and looked over the details Kimberly had not mentioned in their meeting. What other issues could freight factoring help Bennett 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. Aaron was surprised: it said that his company could get up to fifty percent cash advances on load pickups. Aaron 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 Lee the good news,"" muttered Aaron to himself.Aaron's son-in-law, Lee, loved the idea behind Bennett and highly respected his father-in-law for having such great business sense, that two years ago he got his capital together and started his own transportation company. At that time Aaron knew the struggles Lee would face, but he still encouraged him to follow his dream. With the economy the way it was, if an established company such as Bennett was struggling then the little guys, like Lee, were going to be in even more trouble.
But, maybe the answer for both of them was in freight factoring, and Aaron was going to find out very soon.Some months later, having successfully gone through the entire process of the application, having experts study his credit history and statements and review his accounts receivable, Aaron found that he was starting his journey out of the despair which had been created for him by his delinquent account holders.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. Aaron 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.
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The Future of a Trucking Company, and Factoring The phone was ringing on his desk, and Gordon Willis just sat there letting it ring. His morning coffee cooled and his cigarette smoked away in the tray: Gordon is thinking, and pondering the biggest decision he's ever had to make for his trucking business. Willis Trucking Company was at a turning point of growth and Gordon had to decide if signing with a factoring company was the right way forward.
More than forty years ago Gordon's father had started this business working as an owner-operator and eventually growing Willis Trucking Company into a fifteen trailer fleet. There had been some hard times when it seemed everything was going to go under and even Gordon�s mother strapped herself into a cab to make hauls. His father had worked long enough to see the price of hires drop dramatically during the recession and to see the explosion of fuel prices afterwards. But now things were different: the company was in Gordon's hands and he needed to ensure that this business would be left in great shape for his sons.
To move Willis Trucking Company ahead into the future, he needed a steady cash flow but there was just not enough money to go around. 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. He knew that turning down these requests made Willis Trucking look inefficient and weak in what was currently a strong market.
His father would have told him to wait and to take his time adding on new technology. Gordon 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.
Gordon knew he was right in his forward thinking. What would be the next step for Willis 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. 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? There was a lot he didn�t understand about the process. It sounded like a ninth grade math problem and he wondered how this would fit into 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. In those 30 days, a trucking company can�t pay its bills and employees in invoices.
Now it was time for Gordon 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?
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. Their customer service actually knew things about their company and spoke in nice clear English so he could understand what was being explained. He didn�t mind signing 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. Many companies offered a non-recourse factoring program that suited him just fine. He was more than happy with the figures he was offered in percentage terms on the freight bills. It was good money.
For Gordon it was quite a relief to be dealing with the factoring company. They were more personable than those loan managers at the bank. He was relieved to note that the factoring companies understood the trucking business and discussed business with him like a respected client, not like someone looking 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 Gordon 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 have any problems, nor would they think poorly of Willis 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, Gordon stepped out of his office to advise his secretary to expect to receive the contract very shortly from the factoring company. 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, Gordon could actually expand Willis 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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�So, this is not a loan?� asked Ted Lawrence, reclining back into his chair and crossing his legs. The woman sitting across the desk from Ted smiled at him, shaking her head.�Not quite,� she said.Ted Lawrence 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 Dale. His company was called Vasquez Trucking, named after both of his grandfathers, Mike and Cecil. Both of these men had been very hardworking and had set a great example for Dale.Disaster had struck half a year ago, when two trucks in Dale�s fifteen truck fleet went down. One was involved in a very costly accident, and the other simply rolled over, and headed to the trucking graveyard. Ted 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 Ted had on hand.Paying of bills in the trucking industry is always a major cause for concern for businesses.
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.Ted wasn�t a bad owner, and he hadn�t messed up. 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.And that's why he found himself across the desk from this woman. Her name was Virginia 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�s not a loan, we purchase 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.Ted agreed. It sounded perfect - perhaps too good?.Virginia laughed. �You look like you don�t believe me,� she said.�Oh no, I do: it just sounds too good to be true. I thought I was going to lose my company.�Virginia smiled, agreeing. �We get that a lot. Listen, I�d hate to see you lose your company. You work hard, you�ve put everything you can into it. We all need help sometimes. That's why we do what we do.��In any case, thank you for coming to see me.��It�s right down the road, usually we do it all online, but I didn�t mind swinging on by today,� Virginia said with a smile. �Let's work out a solution to your problem.�And with that they set about making a profile.
Ted filled the form out, with Virginia available to help him if he needed it. The profile filled Virginia and her company in on Dale�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 Ted filled out his form, Virginia was pretty sure he was a perfect candidate for factoring.When the form was done Virginia took it and slid it into her briefcase. She then stood, reached across the desk and shook Dale�s hand. He also stood up, and they smiled at each other. They said their goodbyes and Ted walked her to the door, and then returned to his office.All his staff members were there, all seven who worked in his office. Sitting behind his desk once more he could hear the familiar sounds of his office workers going about their daily business.He shut 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 Virginia though, learning about factoring, it felt like a weight had been lifted from his shoulders. He sat back in his chair and ran a hand through his graying but still thick black hair.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.Ted 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 he had gotten bored. He wasn't passionate about 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 Vasquez Trucking. So he did it. Once again he built 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 giving up wasn't part of his personality either.
The idea of cutting his losses, shutting down, laying off his workers, it actually made him sick some nights. He didn�t know how to say quit.And now it seemed as though he wouldn't have to - all because of Factoring. Dale'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?
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.