Factoring invoices is useful for several reasons. It allows a trucking company to raise cash without obtaining brand-new financial obligation. While debt is occasionally required, the majority of trucking companies would choose to raise cash without obtaining cash. Debt is dangerous, and when it can't be paid back, possessions can be repossessed. If the debt is large enough, it may even require a trucking companies out of business.
The Instrument of Profitable Companies - Select
A Factoring Company Instead Of A Typical Bank Financing
Exactly how to Increase Money Flow Without Borrowing -Cash Money flow is one of the main reasons companies fail.
At one time or another, every company, even effective ones, have actually experienced bad money flow.
Cash flow does not have to be a problem any ever 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. What is trucking factoring ? One solution is called factoring business. Trucking Factoring is the procedure of selling accounts receivable to a financier rather than waiting to collect the cash from the
client. Oh, the Irony- Truck factoring has a paradoxical distinction:
It is the monetary
foundation of many of America's most successful companies. Why is this ironic ? Because receivable loan funding is not instructed in business colleges, is rarely discussed in business plans and is fairly unknown to the majority of most of American business people.
Yet it is a financial procedure that frees billions of dollars every year, enabling thousands of companies to grow and prosper. Receivable Financing has been around for countless years. Truck Factoring 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 deals, a big portion of the retail business utilizes a factoring principal. MasterCard, Visa, and American Express all use a type of factoring in their retail deals. Using the purest definition of the word, these large customer finance companies are truly simply big Accounts Receivable Factoring Businesses of consumer paper. Think about it: You make a purchase at Sears and charge
it to your MasterCard. The store makes money practically instantly, even though you do not pay until you are ready.
For this service, the charge card company charges Sears a charge (typical common normal charges range from two to four percent of the sale). The Benefits Truck 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 actually 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.
Factoring Business provides the ways for a producer to renew inventory and make more items to offer: 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: Almost any kind company can take advantage of Staffing Factoring. Generally, a business 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 expense or today s payroll with a customer s invoice, however you can sell that invoice for the cash to satisfy those responsibilities. Using truck factoring companies is a fast and easy 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 U.s. Transportation Association
specifies that there are about
205,000 workers with transportation
276,000 personal companies trucking
companies certified to
run in the States that transported,
according to their latest searchings for billions of
items, materials and
standard materials .
There are a number of typical
groups on our country
roadways transporting these
important products to our
stores, factories and shipping ports.
Furthermorefreight bill factoring
countless of them and offer their
receivables financing 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
EveryTruckJob.com is a free service dedicated to helping professional truck drivers find new truck driving jobs with the best trucking companies hiring today!
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
EveryTruckJob.com is a free service dedicated to helping professional truck drivers find new truck driving jobs with the best trucking companies hiring today!
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
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
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.
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 Kim Truck & Haul have been successfully running their freight business. 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 Kim Truck & Haul was the mastermind of a top-rated accounts receivable in 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. Cash was flowing and times were good for all.But a short year later, in the fall of 2008, when the United States economy took a nosedive and businesses both small and large began to feel the pinch on their pocketbooks, those that used to make their demands had suddenly and largely gone silent. Business slowed to a crawl
. Worse still, it was noticed by Kim 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 Kim, Jamie Graves, was beginning to feel very uncomfortable indeed whenever he looked at their weekly Accounts Receivable 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 something wrong or different when it came to reaching out to delinquent 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. Perhaps they were unable to pay their debt to him, but were able to meet the costs of a lesser service. But after doing the cursory research for this and talking to friends in the field, he found that alas, no, customers of Kim hadn't gone elsewhere. They had just gone home.To Jamie Graves the situation looked desperate. 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, Lillie, 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 say.Jamie 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 somewhere, a haze would form over his fleet and the vast number of vehicles would disappear to but a few. Why couldn�t he work out how to resolve this financial problem with his business?""I know what it is,"" said Jamie. ""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."" Lillie 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'.""Jamie knew very well that Lillie was only trying to help, but his responsibilities weighed heavily on his shoulders and he knew he had better do something soon to resolve this situation.The following day Jamie walked into his office with a spring in his step, determined to call each and every client who owed money to Kim Truck & Haul. This wasn't really a very efficient way for a Chief Executive to spend his day, and Jamie knew he should be overseeing all the other sides of the business, such as shipments and deliveries, approaching prospective customers, or working with his sales team. 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. A waste of time - a waste of money - he had the best intentions, but all the while Jamie 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 Sueerley knocked at his door.
""Can I have a word with you Jamie?"" she queried, standing in the doorway.
""Sure thing Sue, come on in."" Jamie relaxed back into his chair and looked up at Sueerley.""Well, I did a little searching this afternoon and tried to figure out a way out of this mess Jamie."" She pulled a small stack of papers from a folder and set them on the desk before him.""Have you ever heard of factoring?"" she asked.""It does sound 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?"" Jamie interrupted.""Yes, immediately,"" she continued, ""It's actually very simple. We start by having a professional account manager review our figures and help us set up 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,� Jamie 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. We come to an agreement and the funding starts pouring out.�Jamie was still a little concerned. He leaned forward in his chair and studied the paperwork very closely.""It sounds too good to be true, Sue,"" 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. They appear to be very flexible, Jamie,"" 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. It's imperative that we keep the business rolling as usual, and every day we go unpaid we're getting closer and closer to dealing with some serious issues in both the short term and the long term,"" Jamie said.Jamie took in a long slow breath, then looked at his secretary with something like hope in his eyes.""Precisely�. This could very well be the answer to resolving the problems we're having with these clients who still owe us money.""Jamie took a moment to think about this solution, and agreed with his secretary. The customers who were in debt to Kim Truck & Haul were professional resources of the company, but they were also long-standing friends. Jamie wasn't prepared to lose these relationships just because they were having financial issues at the moment. Jamie knew only too well that the whole economy was floundering, and that it was not going to change overnight. That unknown amount of time, if he handled these debtors incorrectly, could spell disaster for both of them. He didn't want to lose business but he also didn't want to lose any more money.""Well, let me think about this tonight Sue, thank you."" Sue stood up and left Jamie's office, with the nice feeling of knowing that she may just have solved a very serious problem.Jamie 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 Kim 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, Kim could receive up to fifty-percent cash advances upon load pick-ups. Jamie 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 Bill the good news,"" muttered Jamie to himself.Jamie's son-in-law, Bill, loved the idea behind Kim 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. Jamie knew then what struggles Bill would face but he encouraged him nonetheless. With the faltering economy, if a big fish like Kim was hurting, a little guy like Bill was about to catch his death. Perhaps the antidote to these problems was in freight factoring, and they were about 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, Jamie found himself beginning to dig his way out of the hole his delinquent account holders had created for him.They took on reasonable factoring purchase contracts and stopped spending their precious man hours scrambling to collect debt. They used that time to refocus their efforts in being competitive in new territories. Jamie recalled those dismal months when he wasn't aware of freight factoring, and he shuddered at those memories. If Jamie hadn't discovered freight factoring at just the right time, his business may not be operating today.
More Trucking Factoring Companies Story Articles
The Future of a Trucking Company, and Factoring The phone was ringing on his desk, and Derrick Snyder just sat there letting it ring. His morning coffee cooled and his cigarette smoked away in the tray: Derrick is thinking, and pondering the biggest decision he's ever had to make for his trucking business. Snyder 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.
Derrick�s father had started as an owner-operator and had grown Snyder 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 Derrick�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 Derrick's hands and he needed to ensure that this business would be left in great shape for his sons.
To move Snyder 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 had families and household bills too. 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 Snyder 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. Derrick allowed himself a good hard chuckle. 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?� 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). 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.
Derrick knew he was right in his forward thinking. What would be the next step for Snyder Trucking? More importantly, how could he 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.
He wondered about factoring - was this the answer for him? If he was being honest, he didn't really understand how it all worked. It sounded like a ninth grade math problem and he wondered how this would fit into 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. In those 30 days, a trucking company can�t pay its bills and employees in invoices.
Now it was time for Derrick to do his homework. Derrick 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. 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. 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 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. 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 sounded like a great scheme to him.
It was really refreshing dealing with the factoring people. They were extremely helpful and more personable than the bank staff. 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 didn�t worry over his credit and the debt troubles his father had had in the past of the company. All the factoring company was interest in was the credit of his customers and on their reliability: this worked great for Derrick 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 Snyder 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.
Feeling happier now, Derrick stepped out of his office to advise his secretary to expect to receive the contract very shortly from the factoring company. 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. He suddenly realized that, with this new cash flow, he could actually expand Snyder Trucking Company and who knows, move into Canada, which had always been his dream. 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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�So It is not a loan?� asked Lance Morales, reclining back into his chair and crossing his legs. The woman who sat across the desk smiled and shook her head.�No, not exactly,� she said.Lance Morales 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 Tommy. His company was called Schmidt Trucking, named after both of his grandfathers, Pedro and Ross. They had both been hardworking men, and had done a lot to make Lance the same.Disaster had struck half a year ago, when two trucks in Tommy�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. The financial security of Tommy'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.
Waiting a month or longer for bills to be paid was quite normal. In the long run, this wasn�t an issue, but if problems arose, you could find yourself in trouble.Lance 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 Maxine 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.Lance nodded. It sounded perfect - perhaps too good?.The woman laughed. �I'm not sure that you 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.�Maxine nodded. �We get that a lot. There's no way we want to see you lose your business. You work hard, you�ve put everything you can into it. Sometimes you need help. That's why we do what we do.��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,� Maxine said with a smile. �Let�s see what we can do to help you.�And with that they set about making a profile.
Lance filled the form out, with Maxine available to help him if he needed it. The completed profile gave Maxine and her company all the information they needed on Tommy's business, and with this information they would determine if this business would in fact be suitable for Factoring. Unfortunately, not all companies are. Some businesses are beyond the help of a Factoring company, while other businesses weren't in enough financial stress to warrant it. As Lance completed his form, Maxine listened to his story and she felt quite sure he would be the ideal candidate for Factoring.When the form was done Maxine took it and slid it into her briefcase. Standing up, she reached over the desk and shook Tommy's hand. He stood before they shook as well, and then smiled. They said their goodbyes and Lance 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 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 Maxine and learning all about Factoring, he felt such a huge relief, like someone had just lifted a huge weight off his shoulders. He sat back in his chair and ran a hand through his graying but still thick black hair.The long nights, where he couldn�t sleep. The sudden panic attacks, not matter where he was. He could feel it all fading 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 there, he was on the right path, and he was working to make things right.His mind wandered back to the very beginning, when he first started his 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 Schmidt Trucking. And that's exactly what he did. Once again he built a company from the ground up. The business had been an instant success.And then the trucks went down, and his success looked to be in flux. He was about to turn fifty. He didn�t think he had it in him, to save this company. But he couldn�t give up. 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. Lance opened his eyes, sat forward, turned his computer on. He had lots to do. There would be plenty of time later to be thankful, but for now it was time to get back to work.
As the owner of your own business enterprise, you may likely be more than conscious already of the challenge in making certain that capital matters do not become a predicament down the line. After all, the worst thing that can in all probability come about for your enterprise is to find yourself embroiled in a long and perplexing condition that leaves you forever searching for the cash you necessitate on an continuous manner.
For virtually any business enterprise in this position, the problem can come for waiting for work to clear up and actually be provided into your balance. Bill of sales, checks, and the like can take a while to actually to be taken care of which can leave you with temporary available resources dilemmas. The good news is, there are solutions out there for companies to delve into-- and among these is factoring firms.
Factoring providers will, in trade for your statements, give you with the resources now in order that you don't need to fret about the lingering duration which could make paying out the bills and acquiring toolsmore complicated. With this kind of arrangement, invoice factoring can end up being extraordinarily practical for several businesses who need to avoid a money lure which they have gotten themselves in.
For the reason that, basing on the volume of the project, it can take up to 60 days for some businesses to get paid then it's important to cover up your own back and not leave yourself money short to settle the expenses. After all, how many businesses possess two months cash flow just occupying there to pay for all their expenses till they earn?
This is most especially correct of truck establishments. They generally manage lots of invoices which means a notable quantity of collection time concerns business owner themselves. Seeking to get paid in time can eventually become an extraordinary inconvenience and this is the key reasons why you utilize trucking factoring providers who are glad to help out truckers primarily.
As most of us recognize, trucking is an remarkably massive field with a lot of agencies out there working with hundreds of drivers. However, many of these drivers end up in money predicaments due to the fact that they are still waiting for work from six weeks in the past to actually pay them. When this is the situation for a trucking organization, resorting to factoring companies for reinforcement could be the ideal choice left.
This means that a truck corporation can pay off the wages of the personnel, keep all the cars topped off with gas and continue to surmount, rise and expand without always waiting for the resources which is taking too long to come in. Trucking Enterprises running without a factoring program established are leaving themselves at significant risk, as competitors cash out quickly and carry on to develop.
There's genuinely almost nothing to be distressed about when it comes to employing a Factoring business-- they usually are not like a banking company or somebody who is going to leave you with a substantial stockpile of debt to pay back. You give them genuine invoices from job you have already finalized , you are merely speeding the payment system.
In the United States, where trucking companies thrive, factoring providers are not considered accepting loan of in any capacity. This confidential arrangement then allows both groups to make money and enjoy a comfortable future-- it provides the factoring business a secured resource of income to include in the list and it provides the trucking business the needed cash that they sweated to earn.
The trucking company presents their statements to the factoring enterprise. The trucking factoring agency then take the installment payments from the trucking company's customers. Factoring has beenaround for hundreds of years and has been utilized for many years by several various industries-- but none exceeding so than truckers. While you might possibly lose out on a small part of the money, something like 1-3 % depending on who you team up with, it signifies that you are receiving the funds today and can actually begin putting the funds to operate.
Anyway, an IOU or an invoice is certainly not going to finance overheads, is it? For trucking agencies when the income can be really good one day and gone the next, it's up to the drivers to work sensibly and to make sure that they are leaving themselves with a considerable quantity of time and finance to get through the week till they are paid once more.
So the next moment your trucking company is bearing some temporary cash flow challenges and you are devoting too much time chasing inactive paying clienteles, why not start looking at utilizing a factoring companies as a way to get your finances and give yourself a more pleasant future in the eyes of your trucking workers 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. As an example, a newly formed business may not have the required assets to qualify for a bank loan, and even if they did, it's usual practise for a bank to use the business itself as collateral. This means that if you default on your loan payment you could lose 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.
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. 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 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
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. 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. 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 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. 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. With a Trucking Factoring company you can actually get the money you need faster. 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. 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.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 not only are you relieved of those monthly loan payments, but you also don't have to worry about the building up of interest, as every penny in the account is yours to spend on the business.
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.
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.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.