Trucking Factoring is useful for a number of reasons. It enables a truck company to raise money without acquiring brand-new debt. While financial obligation is occasionally needed, most trucking companies would choose to raise money without borrowing money. Financial obligation is dangerous, and when it cannot be paid back, assets can be repossessed. If the financial obligation is large enough, it might even compel a freight broker firm out of business.
Take This One Minute Test - Pick A Freight Bill�Factoring Company Instead Of A Traditional Bank Financing
How to Increase Cash Flow Without Loaning -Cash Money flow is among the main reasons businesses fail.
At one time or another, every company, even successful ones, have experienced poor 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 funding. Other solutions are available and you do not have to borrow money. What is truck factoring ? One option is called trucking factoring. Truck Factoring is the procedure of selling accounts receivable to a financier rather than waiting to gather the money from the customer. Oh, the Irony- Trucking factoring has a paradoxical distinction:
It is the monetary
foundation of many of America's most effective businesses. Why is this ironic ? Because invoice factoring is not taught in business colleges, is rarely discussed in company plans and is relatively 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 businesses to grow and succeed. Factoring has actually been around for countless years. 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 financial obligation your client has agreed pay in the near future. Factoring Principals--Although factoring
deals solely with business-to-business transactions, a large percentage of the retail company uses a factoring principal. MasterCard, Visa, and American Express all use a type of factoring in their retail transactions. Using the purest definition of the word, these big consumer finance companies are truly just big Receivable Loan Financing Companies of customer paper. Consider it: You make a purchase at Sears and charge
it to your MasterCard. The store gets paid practically instantly, although you do not pay until you are prepared.
For this service, the charge card company charges Sears a fee (typical common normal charges range from 2 to 4 percent of the sale). The Advantages Commercial Factoring can offer numerous benefits to cash-hungry business. Instead of waiting 30, 60, 90 days or longer for payment on an item that has currently been delivered, a company can factor (sell) its receivables for money at a small discount
off the amount of
the invoice. Payroll, advertising efforts, and working capital are just a few of the company requirements that can be met with instant money.
Commercial Factoring provides the ways for a producer to replenish inventory and make more items to sell: There is no longer a need to await for earlier sales to be paid. FACTORING is not simply a cash management device for manufacturers: Practically any kind company can benefit from Accounts Receivable Factoring. Typically, a business that extends credit will have 10 to 20 percent
of its annual sales bound 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 expense or today s payroll with a customer s invoice, however you can sell that invoice for the cash to satisfy those obligations. Using trucking factoring companies is a fast and simple procedure. The factor purchases the invoice at a discount, typically a couple of percentage
points less than the face value of the invoice.
The American Transportation Association specifies that there are about 205,000 truck drivers with freight trucking companies and 300,000 private service providers trucking companies licensed to run in the States that carried, according to their most current listings of millions of products, materials and standard materials . There are several common providers
or in teams on our nation highways carrying these crucial products to our stores, factories and harbors.
Furthermore trucking factoring companies aid many of them and offer their receivables financing services nationally including 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
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.
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.
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.
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
New York is a vibrant center for commerce and business and one of the three ""world cities"" (along with London and Toyko) that control world finance. Manufacturing�primarily of small but highly diverse types�accounts for a large but declining amount of employment. Clothing and other apparel, such as furs; chemicals; metal products; and processed foods are some of the principal manufactures. The city is also a major center of television broadcasting, book publishing, advertising, and other facets of mass communication. It became a major movie-making site in the 1990s, and it is a preeminent art center, with artists revitalizing many of its neighborhoods. The most celebrated newspapers are the New York Times and the Wall Street Journal. New York attracts many conventions�including the national Democratic (1868, 1924, 1976, 1980, 1992) and Republican (2004) party conventions�and was the site of two World's Fairs (1939�40; 1964�65). It is served by three major airports: John F. Kennedy International Airport and LaGuardia Airport, both in Queens, and Newark International Airport, in New Jersey. Railroads converge upon New York from all points.With its vast cultural and educational resources, famous shops and restaurants, places of entertainment (including the theater district and many off-Broadway theaters), striking and diversified architecture (including the Woolworth Building, Chrysler Building, Empire State Building, Seagram Building, and Gehry's 8 Spruce St.), and parks and botanical gardens, New York draws millions of tourists every year. Some of its streets and neighborhoods have become symbols throughout the nation. Wall Street means finance; Broadway, the theater; Fifth Avenue, fine shopping; Madison Avenue, advertising; and SoHo, art
Spencer Truck & Haul have been operating their business since the mid 1980s. 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 Spencer Truck & Haul was the mastermind of a top-rated accounts receivable in the trucking industry. Few customers were ever late on bills and those clients who were, were sure to turn in their late payments within a reasonable amount of time. 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 Spencer 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 Spencer, Derek Hawkins, 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 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? 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. Perhaps they were unable to pay their debt to him, but were able to meet the costs of a lesser service. 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. The had just gone!.This current state-of-affairs was causing Derek Hawkins to have some very restless nights. Derek was very concerned, because there were constant overheads, goods to ship, employees to pay, and trucks which needed to be maintained, but there just wasn't the money coming back into the business. In the evenings he would discuss his concerns with his wife, Cathy, and still find no relief from the worry and frustration.
""I have a bad feeling, Lin,"" he would say with deep woe.""What could you do differently?"" she would say.Derek would stare off for a moment and then close eyes. He could see the fleet of trucks he had purchased over the 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. Why couldn�t he work out how to resolve this financial problem with his business?""I know what it is,"" said Derek. ""I've relied too long on the profits I receive from invoices alone. I've let too many of our customers go too long without paying on their bills."" Cathy 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'.""Cathy was trying so hard to support her husband in these worrying times, while Derek was weighed down with the worry of how he was going to handle this situation he found himself in.The following day Derek walked into his office with a spring in his step, determined to call each and every client who owed money to Spencer Truck & Haul. This wasn't really a very efficient way for a Chief Executive to spend his day, and Derek 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. Even though he was doing something to help his company, he knew he had folks on salary to do just this thing. Wasting money, wasting time - even with the best of intentions, Derek knew that he was in trouble.
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 Annaerley knocked at his door.
""Can I have a word with you Derek?"" she queried, standing in the doorway.
""Sure thing Anna, come on in."" Derek leaned back in his chair and looked expectantly at Annaerely.""Well, I did a little searching this afternoon and tried to figure out a way out of this mess Derek."" 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 of factoring?"" Annaerley asked.""It sounds vaguely familiar. What is factoring""? he asked.""Well,"" she began, ""It�s actually quite simple really.
Basically, factoring invoices means that we would get paid immediately for the loads we haul.""Derek interrupted ""Immediately?"".""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�s a broad view.��Derek replied cautiously ""I see - and what happens then?��Following the completion of their review and once we've been approved for a contract with the factoring company, then we sit down to negotiate conditions and terms. You'll be surprised at the amount of flexibility, all dependent upon the credit histories and business volume.
The company will advise us the cost to purchase factoring for our company's accounts receivable. The funding commences once we�ve arrived at an agreement.�Derek was still a little concerned. He leaned forward in his chair and studied the paperwork very closely.""I don't know, Anna - it just sounds too good to be true"", Derek said quietly.""Now, now, I know, I thought the same thing. But think about it, Derek: 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 Derek,"" 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. 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 Derek.He took a deep breath and looked at his secretary with something she recognized as hope.""Precisely�. I think this might just be a way out of the trouble we're in with these folks who owe us money.""Derek took a moment to think about this solution, and agreed with his secretary. The customers who were in debt to Spencer 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. Derek knew only too well that the whole economy was floundering, and that it was not going to change overnight. If he didn't handle these debtors in the right way, that unknown amount of time could spell disaster for all 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 Anna, thank you."" Anna nodded, stood up and left the office feeling that she had helped her employer keep on his shirt and hers too.Derek 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 Spencer Truck & Haul 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. In fact, Spencer could receive up to fifty-percent cash advances upon load pick-ups. As a man who hated binding contracts with no room to breathe, he was pleased to see that this factoring company would not make him sign a long term contract, would not make him pay any sign up fees and there was no minimum volume required.""Well, I'll have to tell Neil about this,"" muttered Derek to himself.Neil is Derek's son-in-law, and he really admired the ideas behind Spencer, so much so that only two years before he had started his own transportation service business. At that time Derek knew the struggles Neil would face, but he still encouraged him to follow his dream. With the faltering economy, if a big fish like Spencer was hurting, a little guy like Neil was about to catch his death. But, maybe the answer for both of them was in freight factoring, and Derek 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, Derek found that he was starting his journey out of the despair which had been created for him by his delinquent account holders.They took on reasonable factoring purchase contracts and stopped spending their precious man hours scrambling to collect debt. They took that time and refocused effort to offering competitive prices in new territories. Derek recalled those dismal months when he wasn't aware of freight factoring, and he shuddered at those memories. If Derek hadn't discovered freight factoring at just the right time, his business may not be operating today.
More Trucking Factoring Companies Story Articles
Factoring in the Future of a Trucking Business: A Story Manuel Jordan let the phone ring on his desk. 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. Jordan Trucking Company was at a turning point of growth and Manuel had to decide if signing with a factoring company was the right way forward.
Manuel�s father had started as an owner-operator and had grown Jordan 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 Manuel�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. Now the company was solely in Manuel�s hands and he wanted to live to see it in better shape for his sons.
To move Jordan 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 had families and household bills too. 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, Jordan Trucking looked weak in a very strong market.
He knew what his father would have said - 'wait, take your time before adding new technology'. Manuel chuckled, thinking about his father. He remembered when his father was totally against installing 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. 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.
Manuel knew he was right in his forward thinking. How would he take Jordan Trucking to the next level? 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. 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. A factoring company actually purchases your invoices and takes control of your accounts receivable, payment being a certain percentage of the amount invoiced. In return, the factoring company pays the trucking business straight away, providing immediate cash flow for the business to pay staff, purchase fuel, and do any repairs or maintenance. 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.
Manuel had to really consider what his next step was going to be. Manuel 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 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?
But it turned out to be quite easy. All the factoring companies he researched were open about their business practices and very friendly on the phone when he called. Their customer service actually knew things about their company and spoke in nice clear English so he could understand what was being explained. He was quite happy to sign 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.
It was really refreshing dealing with the factoring people. 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 didn�t worry over his credit and the debt troubles his father had had in the past of the company. Factoring was based on the credit of his customers and on their reliability which worked well for Manuel because he and his father had built up good strong relationships over decades with their list of clients. So he knew they would understand when the factoring company contacted them for the invoices. His clients wouldn�t think poorly of Jordan 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.
Manuel 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. He suddenly realized that, with this new cash flow, he could actually expand Jordan Trucking Company and who knows, move into Canada, which had always been his dream. 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.
Watch Our Factoring Videos For More Information
Trucking Factoring Articles
�So, this is not a loan?� Virgil Mcdonald 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 said.Virgil was the owner of a small trucking company which had fallen on some hard times recently. Trucking could be a profitable business, and for a little under a decade, it had been for Larry. His company was called Mccoy Trucking, named after both of his grandfathers, Virgil and Seth. Both of these men had been very hardworking and had set a great example for Larry.Disaster had struck half a year ago, when two trucks in Larry�s fifteen truck fleet went down. One was a roll-over and ended up in the trucking graveyard: the other was involved in a serious and costly accident. The financial security of Larry'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.
You could go a month or more before bills were completely paid off. This system works okay as long as no problems arise, but if they do, then things can get quite sticky.Virgil was an excellent business man, and he certainly hadn't done anything wrong. Certain events had occurred that he couldn't possibly have predicted, and now he had to find a way to protect his business and prevent it from ultimate devastation.And that's why he found himself across the desk from this woman. Her name was Vera 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.Vera 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.Virgil nodded. It sounded perfect - perhaps 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 actually thought I might end up losing my business.�Vera nodded. �Yes, we get a lot of that. There's no way we want to see you lose your business. We know how hard you work, and that you've invested everything in your business. Sometimes you need help. That's why we do what we do.��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,� Vera said with a smile. �Let�s see what we can do to help you.�And right there and then they created a business profile. Virgil completed the form, with Vera offering advice as needed.
The completed profile gave Vera and her company all the information they needed on Larry'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 were beyond factoring special brand of help, and sometimes things weren�t even dire enough for it. Listening as Virgil filled out his form, Vera was pretty sure he was a perfect candidate for factoring.Vera took the completed form and placed it in her briefcase. Standing up, she reached over the desk and shook Larry's hand. He stood before they shook as well, and then smiled. Virgil walked Vera to the door where they said 'Goodbye', then he went back into 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 Vera 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 terrifying panic attacks that occurred regardless of 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 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.His mind wandered back to the very beginning, when he first started his business. He had opened a restaurant at age twenty two when he was fresh out of school. It had been really successful. Offering home cooking in his own hometown, his business had really prospered.But it wasn't what he really wanted to do. He wasn't passionate about the food industry. He thought long and hard, and then he decided to sell the restaurant. He took six months off, and during that time he decided to create Mccoy Trucking. So he did it. Once again he built a company from the ground up. He had been successful.Then disaster! The two trucks went down and suddenly his success wasn't looking so guaranteed. He was nearing fifty. He was concerned that he just didn't have the energy left to try and save the business. 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, because of factoring, he was sure he wouldn�t have to. Larry's eyes opened, he sat forward in his chair and turned on his computer. 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, you may be more than mindful already of the difficulty in making sure that capital matters do not become a problem down the line. After all, the worst thing that can potentially occur for your business is to find yourself dragged in a long and difficult condition that leaves you forever trying to find the money you require on an continuous manner.
For any firm in this situation, the complication can come for waiting for work to clear up and actually be paid out into your balance. Statements, checks, and the like could take a long time to actually to beprocessed which may leave you with momentary available resources issues. Fortunately, there are alternatives out there for enterprises to delve into-- and one of these is factoring companies.
Factoring companies will, in substitution for your invoices, give you with the money right away so you don't need to stress over the waiting period that could make paying the bills and getting materialsmore complicated. With this kind of setup, invoice factoring can become incredibly beneficial for several establishments who ought to avoid a cash ploy which they have found themselves in.
Simply because, relying on the scale of the work, it can take up to 60 days for some business enterprises to get compensated then it's important to take care of your own back and certainly not leave yourself funds short to pay the bills. After all, how many enterprises have two months revenue just lying there to handle all their costs until they get paid?
This is most notably true of truck firms. They tend to take care of good deals of statements which means a huge quantity of collection time concerns company owner themselves. Attempting to get paid out promptly can turn into an unbelievable hassle and this is exactly why you work with trucking factoring companies who are delighted to help out truckers primarily.
As all of us understand, trucking is an surprisingly massive industry with numerous companies out there utilizing hundreds of drivers. Sadly, numerous of these drivers wind up in money predicaments due to the fact that they are still anticipating work from six weeks in the past to actually compensate them. When this is the scenario for a truck organization, turning to factoring firms for support could be the most effective alternative left.
This means that a trucking firm can provide the paychecks of the crew, keep all the trucks loaded with gas and continue to surmount, progress and expand without constantly waiting for the finances which is taking too long to come in. Trucking Companies working without a factoring system applied are leaving themselves at significant danger, as rivals cash out fast and carry on to grow.
There's genuinely almost nothing to be stressed about when it comes to employing a Factoring firm-- they usually are not like a bank or a person who is going to leave you with a substantial pile of personal debt to repay. You give them genuine invoices from work you have already finalized , you are only just expediting the payment system.
In the United states of America, where trucking establishments grow, factoring agencies are not considered accepting loan of in any capacity. This private agreement then makes it possible for both parties to profit and indulge in a worry-free future-- it provides the factoring agency a guaranteed asset of income to put into the list and it supplies the trucking company the required finances that they worked hard to obtain.
The trucking business provides their statements to the factoring firm. The trucking factoring firm then receive the installment payments from the trucking company's clients. Factoring has beenaround for hundreds of years and has been adopted for many years by many diverse business sectors-- but none more so than truckers. While you may well 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 getting the resources today and can actually start setting the money to work.
Once and for all, an IOU or an invoice is absolutely not going to fund bills, is it? For trucking companies when the money can be fantastic one day and gone the next, it's up to the vehicle drivers to work smartly and to ensure they are leaving themselves with a significant quantity of time and money to get through the week until they are paid once again.
So the next moment your trucking business is bearing some short-term capital issues and you are shelling out a lot of time chasing sluggish paying clients, why not start off thinking of utilizing a factoring companies as a method to get your money and give yourself a more comfortable future in the eyes of your trucking staff and your bank difference?
Bank loans are an extremely traditional way for a business to get financing. 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.
What Are 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. 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 finance you can receive will be based on the amount you have earned and the accounts receivable you are prepared 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.
What Are The Benefits Of A Trucking Factoring Company Versus A Traditional 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. 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. 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. 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. 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 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.