What Your Banker Doesn't Want You to Know -
Our Receivable Factoring
Your Trucking Company
The Cash You Want
Factoring invoices is helpful for numerous reasons. It permits a trucking business to raise money without getting new debt. While financial obligation is occasionally essential, many trucking companies would like to raise cash without obtaining cash. Financial obligation is risky, and when it can not be paid back, properties can be repossessed. If the financial obligation is big enough, it may even force a freight broker firm out of business.
Check the Kind of Bank Account You Want - Pick
A Freight�Factoring Company Instead Of A Traditional Bank Funding
Exactly how to Increase Cash Flow Without Loaning -Cash Money flow is one of the main reasons businesses fail.
At one time or another, every business, even successful ones, have experienced bad cash flow.
Money flow does not have to be an issue any ever more. Do not be fooled -- banks are not the only locations you can get funding. Other solutions are available and you do not have to borrow. Exactly what is trucking factoring ? One option is called receivable factoring. Trucking Factoring is the procedure of selling invoices to a financier instead of waiting to collect the cash from the
customer. Oh, the Irony- Truck factoring has an ironic distinction:
It is the monetary
backbone of numerous of America's most successful businesses. Why is this paradoxical ? Because receivable loan funding is not taught in business colleges, is rarely discussed in company plans and is relatively unidentified to the majority of most of American business individuals.
Yet it is a monetary procedure that frees billions of dollars every year, allowing thousands of companies to grow and succeed. Invoice Factoring has been around for thousands of years. Commercial Factoring Companies are investors who pay cash for the right to get the future payments on your invoices. An overdue receivable or invoice has value. It is a debt your customer has actually to pay in the near future. Factoring Principals--Although factoring
offers solely with business-to-business deals, a big percentage of the retail company utilizes a factoring principal. MasterCard, Visa, and American Express all utilize a form of factoring in their retail transactions. Utilizing the purest definition of the word, these large customer finance business are really simply large Trucking Factoring Companies of customer paper. Consider it: You make a purchase at Sears and charge
it to your MasterCard. The shop gets paid almost instantly, although you do not pay up until you are prepared.
For this service, the charge card company charges Sears a charge (typical common normal charges range from two to 4 percent of the sale). The Benefits Invoice Factoring can provide numerous advantages to cash-hungry companies. Rather than wait 30, 60, 90 days or longer for payment on an item that has already been provided, a business can factor
(sell) its receivables for money at a small price cut
off the dollar value of
the invoice. Payroll, marketing efforts, and working capital are simply a few of the company requirements that can be satisfied with instant cash.
Receivable Factoring offers the means for a producer to replenish stock and make more items to offer: There is no longer a requirement to wait for earlier sales to be paid. FACTORING is not just a money management device for manufacturers: Practically any type business can benefit from Receivable Financing. Typically, 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 minute about exactly how much is bound in 60 days' worth of invoices: You can not pay the power bill or this week s payroll with a client s invoice, but you can offer that invoice for the money to satisfy those responsibilities. Using trucking factoring companies is a fast and simple process. The factoring company purchases the invoice at a price cut, usually a couple of portion
points less than the face value of the invoice.
Please call our freight bill factoring specialists at 1 - 888-239-9162
or E-mail Us
The U.s. Transportation Association
states that there are about
205,000 work with freight trucking
276,000 private service providers trucking
firms licensed to
operate in the States that carried,
according to their newest searchings for billions of
items, supplies and
standard products .
There are several common
groups on our country
roads transferring these
crucial products to our
stores, factories and ports.
numerous of them and offer their
receivable loan facilities
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
If you're like most drivers, you're looking for a better company in trucking that might be offering the best jobs in terms of pay, freight, and hometime ' not to mention benefits or a sign on bonus. We've got all of our clients listed based on the states where they're hiring, so you can quickly find the best job in your home state. You'll see the very best nationwide trucking companies that have positions available.
The largest trucking companies in the U.S. set a revenue record in 2013, but revenuegrowth slowed for the second year in a row.
The combined revenue of the 50 largest motor carriers rose to $106.6 billion last year, according to The JOC Top 50 Trucking Companies list, based on data prepared by SJ Consulting Group in Pittsburgh.
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.
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
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.
Griffin Truck and Haul has been in business since the mid 1980s. 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 boom times from 2002 to 2007 Griffin 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. Times were great for everyone, and the cash was flowing.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
. And worse yet, Griffin had noticed during the early part of 2008 that though the bulk of their clients were always on time with payments, the few late-bloomers there were, had seemingly started to spread this illness. And as spring turmed to summer and summer into the early days of fall, Earl Allen, CEO of Griffin felt a chill go down his spine whenever he would look at the weekly A/R reports. The number of clients who were late in their payments was continuing to grow.He had already been to the administrators to ask what the actual problem was. Were they doing things different, or wrong, when it came to collecting overdue accounts? By his bookkeepers records, this wasn't the case. He thought perhaps that he was losing clients to a competitor who offered rock-bottom prices with little to no guarantee of quality performance, and that the folks who owed Griffin money had jumped ship and decided to leave him holding the bag.
. They couldn't afford to pay him their debt, but they could afford a lesser service, maybe. But after doing the cursory research for this and talking to friends in the field, he found that alas, no, customers of Griffin hadn't gone elsewhere. They had just gone home.To Earl Allen 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. After work he would confide in his wife, Lillian, and neither were unable to stop the constant worry over the lack of funds.""I have a bad feeling, Lin,"" he would say with deep woe.""Well, what do you think it is?"" she would say.Earl 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 on the road, delivering good to all his loyal customers. But then a haze would cover his trucks and his vast fleet would vanish to leave just a few. What could cause this ultimate death spiral of business?""I think I know what it could be,"" said Earl. ""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."" Linda could only grab her husband's hand and look at him lovingly, ""It's a hard economy. It might be awhile until things get settled up.
""Earl 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 Earl strolled into his office and was determined to sit down and make every phone call to every client who had owed Griffin money. This wasn't really a very efficient way for a Chief Executive to spend his day, and Earl 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. A waste of time - a waste of money - he had the best intentions, but all the while Earl 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 Janeterley knocked at his door.
""Can I have a word with you Earl?"" she asked standing in the doorway.
""Sure thing Janet, come on in."" Earl relaxed back into his chair and looked up at Janeterley.""Well Earl, this afternoon I did some research, trying to work out how we're going to get out of this mess."" She pulled a small stack of papers from a folder and set them on the desk before him.""Have you ever heard the word factoring?"" she asked.""It does sound vaguely familiar. What is it?"" he said.She began, ""Well, it's really very simple. Basically, factoring invoices means that we would get paid immediately for the loads we haul.""""Immediately?"" Earl interrupted.""Yes, immediately,"" she continued, ""In a nutshell, it's pretty easy. 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�s a broad view.��I see,� Earl 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. The funding commences once we�ve arrived at an agreement.�Leaning forward, Earl studied the documents very closely.""It sounds too good to be true, Janet,"" 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, Earl,"" she drew a circle around a paragraph on the document before him.""How flexible?"" asked Earl.""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 Earl.Earl 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.""Earl took a moment to think about this solution, and agreed with his secretary. The clients who owed them money were long standing friends and professional resources of Griffin. Just because they were experiencing difficulties paying their own bills now, Earl was very concerned about losing these relationships. Earl knew only too well that the whole economy was floundering, and that it was not going to change overnight. 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.""Well, let me think about this tonight Janet, thank you."" Janet stood up and left Earl's office, with the nice feeling of knowing that she may just have solved a very serious problem.Earl stayed at his desk for a long time, looking over the details they hadn't discussed during their meeting. What other issues could freight factoring help Griffin 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. Earl was surprised: it said that his company could get up to fifty percent cash advances on load pickups. Earl 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.""Well, I'll have to tell Kenneth about this,"" muttered Earl to himself.His son-in-law Kenneth had liked the idea of Griffin so much and revered his father in law for having such business acumen that only two years before, he had gathered the venture capital to begin his own transportation service company. At that time Earl knew the struggles Kenneth would face, but he still encouraged him to follow his dream. With the economy the way it was, if an established company such as Griffin was struggling then the little guys, like Kenneth, were going to be in even more trouble. But, maybe the answer for both of them was in freight factoring, and Earl 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, Earl 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. Earl recalled those dismal months when he wasn't aware of freight factoring, and he shuddered at those memories. If Earl 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 Raymond Adams 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. Adams 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.
Raymond�s father had started as an owner-operator and had grown Adams 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 Raymond�s mother strapped herself into a cab to make hauls. His father had lived long enough to witness the price of hires drop during the recession and watch the eruption of fuel prices afterwards. But now things were different: the company was in Raymond's hands and he needed to ensure that this business would be left in great shape for his sons.
To move Adams Trucking Company ahead into the future, he needed a steady cash flow but there was just not enough money to go around. His employees needed to be paid. They all have families and the usual household bills. 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 Adams Trucking look inefficient and weak in what was currently a strong market.
He knew what his father would have said - 'wait, take your time before adding new technology'. Raymond chuckled, thinking about his father. His father had been against placing GPS units in the cabs. He would say, �Why do you need the voice of some woman to tell you to get off at an exit that has been the same exit that has been there for years?� 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.
Raymond knew he was right in his forward thinking. How would he take Adams Trucking to the next level? 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.
But was factoring the answer? If he was being honest, he didn't really understand how it all worked. It sounded a lot like ninth grade algebra which just didn�t feel like it belonged as part of the trucking business. Factoring companies buy your invoices and manage your accounts receivable for a certain percentage of the invoiced amount. 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 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 Raymond to do his homework. Raymond 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. Worse still, if the customer defaulted on payment, the factoring company takes it out of the money supposedly coming to you! He'd even heard about some companies putting you onto a sliding percentage scale regardless of any previously signed contracts for possibly 3% or 7%, and there you are now with 10% coming as a charge 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. 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 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. In fact there were a few companies who offered him a non-recourse factoring program, and this was exactly what he had been hoping for. Also he was happy to hear how much he was offered in terms of percentages on the freight bills. It was good money.
It was really refreshing dealing with the factoring people. They were more personable than those loan managers at the bank. It seemed as though those bank people spoke another language, but these factoring guys knew the trucking business and spoke to him like a client, not like a beggar for a handout. The factoring companies 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 Raymond 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 Adams 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.
Raymond stepped out of his office to let his secretary know to expect the arrival of the factoring contract shortly. 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. With the capabilities of this new cash flow, Raymond could actually expand Adams Trucking Company further across the country and perhaps even go international into Canada. 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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Trucking Factoring Articles
�So, this is not a loan?� Howard Nelson asked as he leaned back in his chair, crossing his legs. The woman who sat across the desk smiled and shook her head.�No, not exactly,� she said.Howard was the owner of a small trucking company which had fallen on some hard times recently. Certainly the trucking business can be an extremely profitable venture, and for many years it had been that way for Theodore. His company was called Butler Trucking, named after both of his grandfathers, Eddie and Brad. They had both been hardworking men, and had done a lot to make Howard the same.Disaster had struck half a year ago, when two trucks in Theodore�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 Theodore's company relied on his full fleet on fifteen being on the road, and missing two trucks was just devastating . Furthermore, buying a whole new truck and fixing the other simply took more cash than Howard had on hand.A big problem a lot of trucking companies came across was how bills were paid in the industry. 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.Howard 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.And that's why he found himself across the desk from this woman. Howard knew she was employed by a Factoring company and that her name was Kristina. Howard had come across her company as he sat in his office late one night, pouring over the internet for some solution to his problem long after his employees had gone home.She sat there now, and explained. �It�s not a loan, we purchase 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.Howard nodded. It sounded perfect - perhaps too good?.The woman laughed. �You look like you don�t believe me,� she said.�No, I do, I just think it sounds a bit too good to be true. I actually thought I might end up losing my business.�Kristina nodded. �Yes, we get a lot of that. 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.��In any case, thank you for coming to see me.��No problem - I'm just down the road. We normally do it all online but I was happy to come and visit you today,� said Kristina with a smile. �Let's work out a solution to your problem.�And with that they set about making a profile.
Howard completed the form, with Kristina offering advice as needed.
The profile filled Kristina and her company in on Theodore�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. As Howard completed his form, Kristina listened to his story and she felt quite sure he would be the ideal candidate for Factoring.When the form was done Kristina took it and slid it into her briefcase. Standing up, she reached over the desk and shook Theodore's hand. He also stood up, and they smiled at each other. They said their goodbyes and Howard 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 leaned back and closed 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 Kristina 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. 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 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. 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 Butler 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 about to turn 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, because of factoring, he was sure he wouldn�t have to. Theodore'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.
As the owner of your own establishment, you may likely be much more than aware already of the challenge in making sure that cash flow issues do not become a dilemma down the line. Anyway, the most horrible thing that can potentially take place for your company is to find yourself involved in a long and tough predicament that leaves you forever trying to find the resources you need on an recurring manner.
For any type of enterprise in this case, the concern can come for waiting for work to lapse and actually be paid out into your balance. Invoices, checks, and the like can take a while to actually to be taken care of which can certainly leave you with short-term available resources troubles. Gratefully, there are solutions out there for industries to look into-- and one of these is factoring providers.
Factoring agencies will, in exchange for your invoices, give you with the funds right now to ensure you don't have to fret about the waiting duration that could make paying the expenses and purchasing materialsmore tough. With this type of setup, invoice factoring can become incredibly beneficial for plenty of establishments who ought to avoid a cash lure which they have discovered themselves in.
Considering that, basing on the scale of the job, it can take up to 60 days for a number of firms to get paid out then it's important to take care of your own back and not leave yourself money short to pay off the bills. After all, how many establishments possess two months profits just lying there to address all their expenses until they earn?
This is most especially correct of trucking companies. They tend to manage numbers of invoices which means a significant volume of collection time demands company owner themselves. Attempting to get paid off in time can turn into an extraordinary trouble and this is the key reasons why you work with trucking factoring providers who are thrilled to help out truckers exclusively.
As we all realize, trucking is an exceptionally massive field with plenty of organizations out there hiring hundreds of drivers. Regrettably, plenty of these drivers land up in cash difficulties considering that they are still waiting on work from six weeks in the past to actually compensate them. When this is the situation for a trucking company, turning to factoring companies for aid might be the ideal alternative left.
This indicates that a truck organization can pay the salaries of the staff, keep all the trucks filled with gas and continue to go up, grow and expand without constantly waiting for the finances which is taking too lengthy to come in. Trucking Businesses running without a factoring system used are leaving themselves at substantial threat, as competitors cash out rapidly and carry on to grow.
There's honestly not much to be worried about when it comes to using a Factoring business-- they typically aren't like a bank or someone who is going to leave you with a large mass of financial obligation to pay back. You give them legitimate invoices from job you have already wrapped up , you are merely facilitating the repayment system.
In the United States, where truck companies survive, factoring enterprises are not considered accepting loan of in any capacity. This private agreement then makes it possible for both groups to profit and take pleasure in a worry-free future-- it gives the factoring business a warranted resource of money to add to the list and it furnishes the trucking firm the required money that they sweated to get.
The trucking firm presents their statements to the factoring agency. The trucking factoring company then receive the payment amounts from the trucking company's customers. Factoring has beenaround for hundreds of years and has been used for several years by a lot of varied business sectors-- but none exceeding so than truckers. While you might possibly miss out on a small part of the money, something like 1-3 % depending on who you work with, it implies that you are receiving the money today and can actually start setting the cash to perform.
After all, an IOU or an invoice is not going to pay for overheads, is it? For trucking agencies when the resources can be very good one day and gone the next, it's up to the drivers to work prudently and to make sure they are leaving themselves with a substantial quantity of time and money to get through the week up until they are compensated again.
So the next moment your trucking business is enduring some momentary capital problems and you are putting in a lot of time chasing sluggish paying clients, why not start thinking of employing a factoring companies as a manner to get your cash and give yourself a more comfortable future in the eyes of your trucking workers and your bank balance?
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 do not give loans, and the money you get from the Trucking Factoring company does not put you in debt. Rather the financing you receive from a Trucking Factoring company is based on money your business has already earned, but have not yet received. The Trucking Factoring company purchases your accounts receivable, or part of them, for a certain percentage of their value - this is normally about 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 you have set up Trucking Factoring account it continues as long as you wish it too and the amount of money available to you even can grow as your business grows, giving you the ready cash you need to meet your own obligations.
What Are The Benefits Of A Trucking Factoring Company Versus A Traditional 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. Should the unforeseeable happen and your business fails, you won't have to worry about anyone coming after your personal as well as your business assets to pay off a loan. With a bank loan, the debt goes onto your credit report, and even one late payment can adversely affect your businesses credit, and even the ability to get insurance and may even reflect upon your personal credit rating.
2. There's no collateral required. Another benefit of using a Trucking Factoring company instead of a traditional loan is that you aren't required to provide collateral to the Trucking Factoring company in order to secure financing, because the company �buys� the accounts receivables; not loans you money based on them. In addition, while the Trucking Factoring company does run a credit check on your customers whose accounts receivables are offered for financing, the state of your credit is not an issue. This makes it easier for fledgling businesses to get the financing they need through a Trucking Factoring company (as long as their accounts receivables are in good order) then from a bank, who may not feel that you have been in business long enough to be worth the risk of issuing you a loan.
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, there are several benefits that makes considering financing through a Trucking Factoring company over a traditional bank worthwhile. 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.