Invoice Factoring is useful for a number of factors. It enables a trucking company to raise cash without acquiring new financial obligation. While debt is often needed, the majority of truck companies would choose to raise cash without obtaining money. Financial obligation is high-risk, and when it can not be repaid, properties can be repossessed. If the debt is big enough, it could even force a truck companies out of business.
Here Is a Quick way to Shore Up Your Cash Flow - Pick A Freight�Invoice Factoring Company Instead Of A Typical Bank Financing
How to Enhance Money Flow Without Borrowing -Cash Money flow is among the primary 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 a problem any more. Do not be fooled -- banks are not the only places you can get financing. Other solutions are offered and you do not have to borrow money. Exactly what is trucking factoring ? One solution is called trucking factoring. Trucking Factoring is the procedure of offering accounts receivable to a financier instead of waiting to gather the money from the
customer. Oh, the Irony- Truck factoring has a paradoxical difference:
It is the monetary
backbone of many of America's most successful companies. Why is this ironic ? Since receivable financing is not instructed in business colleges, is rarely discussed in company strategies and is fairly unidentified to the majority of most of American company individuals.
Yet it is a monetary process that releases up billions of dollars every year, allowing countless companies to grow and succeed. Receivable Loan Funding has been around for thousands of years. Receivable Loan Funding Businesses 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 agreed 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 utilize a form of factoring in their retail transactions. Using the purest meaning of the word, these large customer finance companies are really simply large Receivable Financing Companies of customer paper. Consider it: You purchase at Sears and charge
it to your MasterCard. The shop gets paid practically immediately, although you do not make payment until you are ready.
For this service, the charge card company charges Sears a charge (typical common normal charges vary from 2 to four percent of the sale). The Advantages Accounts Receivable Factoring can provide numerous advantages to cash-hungry companies. Rather than wait 30, 60, 90 days or longer for payment on a product that has actually currently been delivered, a company 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 just a few of the business needs that can be met with instant money.
Accounts Receivable Factoring provides the ways for a manufacturer to renew stock and make even more products to sell: There is no longer a need to wait for earlier sales to be paid. Receivable Loan Financing is not simply a money management tool for manufacturers: Almost any kind business can benefit from Factoring. Typically, a business that extends credit
will have 10 to 20 percent
of its annual sales tied up in accounts receivable at any given time. Think for a minute about how much is bound in 60 days' worth of invoices: You can not pay the power expense or today s payroll with a client s invoice, however you can sell that invoice for the money to satisfy those responsibilities. Using truck factoring companies is a quick and easy procedure. The factor buys the invoice at a price cut, usually a couple of portion
points less than the stated value of the invoice.
The U.s. Trucking Organization
specifies that there around
205,000 employees with truck
276,000 private companies trucking
companies certified to
operate in the United States that carried,
according to their newest data of millions
products, materials and
standard materials .
There are numerous common
groups on our country
roadways carrying these
important items to our
shops, manufacturing facilities and shipping ports.
Also freight bill factoring
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
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
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.
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.
The largest trucking companies in the U.S. set a revenue record in 2013, but revenuegrowth slowed for the second year in a row.
The combined revenue of the 50 largest motor carriers rose to $106.6 billion last year, according to The JOC Top 50 Trucking Companies list, based on data prepared by SJ Consulting Group in Pittsburgh.
Life of a Truck driver, like many other professionals can be very challenging, rewarding, and frustrating at the same time. �The Truckers Place.com� is an information site for many of the Truckers needs. It is designed to encompass the needs of the Trucker, both on the Road and at Home.
List of Trucking Companies for Owner/Operators and Company Drivers
Fisher Truck and Haul has been in 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 Fisher 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. Times were great for everyone, and the cash was flowing.It was just one year later, in 2008, when the economy in the United States took a sharp decline, and both large and small businesses started to notice the squeeze on their pocketbooks: everyone had suddenly gone silent. Business slowed to a crawl
. Worse still, it was noticed by Fisher in early 2008 that even though most of their loyal customerswere 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 Fisher, Norman Armstrong, 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 things different, or wrong, when it came to collectingoverdue accounts? When checking his bookkeeper's records this was definitely not 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 Fisher money had jumped ship and decided to leave him holding the bag.
. 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 withfriends in the same field, he realised that no, his customers hadn't gone anywhere else. They had just gone home.The situation looked dire to Norman Armstrong. 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. After work he would confide in his wife, Cindy, and neither were unable to stop the constant worry over the lack of funds.""I have a bad feeling, Lin,""he'd sadly say to his wife.""What could you do differently?"" she would ask.Norman would stare off for a moment and then close 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 on earth was happening to create the death of his business?""I think I know what it could be,""Norman said. ""For way too long I've been relying solely on profits received from invoices. For too long I've been allowing our clients to let their accounts become overdue."" All Cindy could do was hold his hand and look at him tenderly. 'We know it's a difficult economy at the moment - perhaps it will take a while for people to get on top of their bills'.""Norman knew very well that Cindy was only trying to help, but his responsibilities weighed heavily on his shoulders and heknew he had better do something soon to resolve this situation.The next day Norman strolled into his office and was determined to sit down and make every phone call to every client who had owed Fisher money. This wasn't really a very efficient way for a Chief Executive to spend his day, and Norman 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 proactiveto help his business, even though he had staff on salary to do just that thing. Wasting money, wasting time - even with the best of intentions, Norman knew that he was in trouble.
Poor Norman spent the whole morning trying in vain to contact his debtors: they promised to call back, dodged his calls, or made small interest-only payments. He was beginning to feel quite despaired when his secretary knocked on his door.
""Norman, can I have a word?"" she queried, standingin the doorway.
""Sure thing Pearl, come on in."" Norman leaned back in his chair and looked expectantly at Pearlerely.""Well, I did a little searching this afternoon and tried to figure out a way out of this mess Norman."" She opened up a folder she had been carrying and pulled out a small wad of papers, placing them on the desk in front of him.""Have you ever heard the word factoring?"" Pearlerley 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.""Norman interrupted ""Immediately?"".""Immediately, yes"" she added, ""In a nutshell, it's pretty easy. We can have an expert account manager review our numbers and help us complete a company profile. Included in the profilewould be the investigation of our accounts receivable aging reports, our current customers' credit limits etc.. Additionally, the factoring will help to determine the creditworthiness of our customers independent of their credit history with our business. It�s a broad view.��Norman replied cautiously ""I see - and what happens then?��Well, after their review, and we�re approved for a factoring contract, we can negotiate terms and conditions. You'll be surprised at the amount of flexibility, all dependentupon the credit histories and business volume.
The company will advise us the cost to purchase factoring for our company's accounts receivable. We come to an agreement and the funding starts pouring out.�Norman leaned forward and reviewed the paperwork closely.""I don't know, Pearl - it just sounds too good to be true"", Norman said quietly.""Now, now, I know, I thought the same thing. But think about it, Norman: 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 Norman,"" she drew a circle around a paragraph on the document before him.""Just how flexible?"" he asked.""They personalize the factoring rates so that the amount they are willing to take on is commensurate with our needs and our client�s debt. It only takes 2 to 4 days for this to be figured out. """"Thatsounds 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 Norman.Norman 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 theseclients who still owe us money.""Norman took a moment to think about this solution, and agreed with his secretary. The customers who were in debt to Fisher 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. Norman knew that the economy had taken a hit and he knew that it would probably be a long time before things started to look up again. Ifhe 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.""Let me go over this tonight Pearl, and thankyou."" Pearl nodded, stood up and left the office feeling that she had helped her employer keep on his shirt and hers too.Norman stayed at his desk for a long time, looking over the details they hadn't discussed during their meeting. He wondered if theremight be other problems freight factoring could help Fisher 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, Fisher 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 feesand there was no minimum volume required.""I must tell Byron the good news,"" muttered Norman to himself.His son-in-law Byron had liked the idea of Fisher 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 Norman knew the struggles Byron would face, but he still encouraged him to follow his dream. With the faltering economy, if a big fish like Fisherwas hurting, a little guy like Byron was about to catch his death. But, an antidote may have been found in freight factoring and Norman was soon to find out.A few short months later, after completing the application process, having the legal experts review his credit history, accounts receivable, and statements, finally Norman was beginning to find his way out of the hole his debtors had created for him.They adopted reasonable factoring purchase contracts and stopped wasting their own precious time trying tocollect debts. They used that time to refocus their efforts in being competitive in new territories. Norman recalled those dismal months when he wasn't aware of freight factoring, and he shuddered at those memories. Had he missed the boat on this one, he probably wouldn't be in business today.
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Factoring in the Future of a Trucking Business: A Story Ron Morrison 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. Morrison 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.
More than forty years ago Ron's father had started this business working as an owner-operator and eventually growing Morrison Trucking Company into a fifteen trailer fleet. Yes, they had survived some very difficult times when it appeared like they might go under, and even Ron's mother had jumped into the cab at times to make hauls. His father had lived long enough to witness the price of hires drop during the recession and watch the eruption of fuel prices afterwards. Now the companywas solely in Ron�s hands and he wanted to live to see it in better shape for his sons.
To move Morrison Trucking Company ahead into the future, he needed a steady cash flow but there was just not enough money to go around. He had employees to pay. They all have families and the usual household bills. Some of the refrigerated trailers were in need of repairs and he felt to stay competitive it was also a good idea to invest in specialized haulers to be ready for the constant requests he was gettingfor loads of new energy and agriculture equipment. He knew that turning down these requests made Morrison 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'. Ron 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 beenthere 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.
Ron knew he was right in his forward thinking. How would he take Morrison Trucking to the nextlevel? More importantly, how could he afford it? Business funding was tied up in fuel bills and the mortgage for the garage and office. 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 a lot like ninth grade algebra which just didn�t feel like it belonged as part of the trucking business. A factoringcompany 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. During those thirty days the truckingcompany can't pay its employees and bills with invoices.
Ron had to really consider what his next step was going to be. He had heard of companies charging for same day money transfers, advancing a percentage of the money owed to your business, while the rest is held in a private account if the bill wasn't paid within sixty or more days. Worse still, if the customer defaulted on payment, the factoring company takes it out of the money supposedly coming to you! Through the grapevine, he�d also heardabout how some companies suddenly slipped you onto a sliding scale of percentages even if you had already signed a lengthy contract for maybe 3% or 7% so there you are with 10% coming as a cost to you out of the freight bill. His friend Ronnie who had a trucking business in Missouri, was run nearly into the ground by a factoring company that charged him the full freight bill on top of the factoring fees. Well, what was the point of going to a factoring company if there was shady business like that going on?
However,it all turned out to be very simple. When he called the factoring companies he discovered they were very open about their business practices, and very friendly and helpful. Customer service appeared to understand their company and explained in clear, concise English exactly how it all worked. He didn�t mind signing an exclusive contract. 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. Nobody chargedhim for credit checks and they offered him a fuel advance on the pick-up of the 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 extremely helpful and more personable than the bank staff. He was relieved to note that the factoringcompanies 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 Ron because he and his father had built up good strong relationships over decades with their list of clients. He knew immediately that there would not beany problems when they were contacted by the factoring company regarding their invoices. His clients wouldn�t think poorly of Morrison 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, Ron stepped out of his office to advise his secretary to expect to receive the contract very shortly from the factoring company. He felt exhilarated by the new possibilities that would makethe 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 Morrison 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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Trucking Factoring Articles
�So It is not a loan?� asked Peter Cox, 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 stated.Peter Cox 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 Rodney. His company was called Ray Trucking, named after both
of his grandfathers, Brian and Bernard. They had both been hardworking men, and had done a lot to make Peter the same.Disaster had struck half a year ago, when two trucks in Rodney�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 Rodney'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.Peter 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 protecthis business and prevent it from ultimate devastation.And that's why he found himself across the desk from this woman. Peter knew she was employed by a Factoring company and that her name was Elizabeth. Peter 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.Peter agreed. It sounded good to him, almost too good.The woman laughed. �You look like you don�t believe me,� she said.�Oh no, I do: it just sounds too good to be true. I actually thought I might end up losing my business.�Elizabeth nodded. �Yes, we get a lot of that. There'sno 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 what we�re here for.��In any case, thank you for coming to see me.��It�s right down the road, usually we do it all online, but I didn�t mind swinging on by today,� said Elizabeth with a smile. �Let's work out a solution to your problem.�And right there and then they created a business profile. Peter filled the form out, with Elizabeth available to helphim if he needed it. The profile filled Elizabeth and her company in on Rodney�s company, and would help them determine if he was suitable for factoring. In truth, not all companies were. Some were beyond factoring special brand of help, and sometimes things weren�t even dire enough for it. As Peter completed his form, Elizabeth listened to his story and she felt quite sure he would be the ideal candidate for Factoring.Elizabeth took the completed form and placed it in her briefcase. She then stood, reached acrossthe desk and shook Rodney�s hand. He stood before they shook as well, and then smiled. Peter walked Elizabeth 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 shut his eyes. He felt so drained: he had been flailing helplessly for so long, he just knew his business was going to collapse and probablytake him with it. Talking to Elizabeth though, learning about factoring, it felt like a weight had been lifted from his shoulders. He sat back in his chair and ran a hand through his graying but still thick black hair.All those long, sleepless nights. The sudden panic attacks, not matter where he was. Already he could feel all the stress start to drain away. He knew it wasn't over yet and that there was still a way to go, but he could just feel everything start to change for him. He was still here; he knew thiswas the right path for him, and he felt proud that he had taken the appropriate steps to sort out his problems.Peter couldn�t help but think back to when he had first started the business. He had opened a restaurant at age twenty two when he was fresh out of school. It had been really successful. Home cooking in his hometown, and he had done very well.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 hisrestaurant. He took half a year off, and in that time he thought to start Ray 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 was concerned that he just didn't have the energy left to try and save the business. But he couldn�t give up. The idea of cutting his losses, shutting down, laying off his workers, it actually made him sicksome nights. He didn't want to quit - both for himself and for his staff members.And now it seemed as though he wouldn't have to - all because of Factoring. Rodney's eyes opened, he sat forward in his chair and turned on his computer. He had lots to do. He could be thankful later, for now, it was time to work.
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Why Truck Agencies Employ Factoring Firms.
As theoperator of your own business, youmay likely be more thanwary already of thehardship in makingcertain thatcapital issues do not become a problem down the line. After all, themost awful thing that canin all probabilityoccur for yourestablishment is to find yourselfinvolved in a long andchallenging situation that leaves you forever trying to find theresources youreallyneed on an ongoing basis.
Forjust about anyestablishment in thisinstance, theconcern can come for waiting for work tolapse and actually bepaid out into yourbalance.Bill of sales, checks, and the like can take some time to actually to be taken care of whichcan certainly leave you withtemporaryavailable resourcesdilemmas. Thankfully, there aresolutions out there forenterprises tocheck out-- and one of these is factoring companies.
Factoring companies will,insubstitution for your invoices,give you with themoneynowto ensure that you don'thave to worry about thedelaying periodwhich could makepaying off the bills andobtaining materialsmorehard. With thisform ofsystem, invoice factoring can becometremendouslyhelpful forcountlessestablishments who need toavoid amoneypitfall which they have found themselves in.
Simply because, depending on thevolume of the job, it can take up to 60 days forseveralbusiness enterprisesto get paid then it'scritical tocover up your own back anddefinitely not leave yourselfresources short tosettle theexpenses. After all, how manycompanies have two monthscash flow just lying there tohandle all theirexpenditures until theymake money?
This isparticularlycorrect oftruck companies. Theyoften tend tomanagegreat deals of invoices which means aconsiderable amount of collection timedemandscompany owner themselves.Seeking to get paidpromptly canturn into anunbelievable hassle and this is why you usetruck factoringfirms who are happy to help out truckersmainly.
As we allrealize, trucking is ansurprisinglyenormous industry with many companies out thereutilizing hundreds ofoperators.Regretfully, many of these driversland up in moneydifficultiesfor the reason that they are stillwaiting on work from six weeksearlier to actually pay them. When this is thecase for atruckagency,resorting to factoringagenciesforsolutionsmay be themost idealalternative left.
Thissignifies that a truckingbusiness canpay out the wages of thepersonnel, keep all thecarsfilled withgas and continue toescalate,evolve and expand without always waiting for theresources which is taking too long to come in. Trucking Businessesfunctioning without a factoring programestablished are leaving themselves atconsiderabledanger, as competitors cash outquickly andgo on togrow.
There'sabsolutelynot a thing to be worried about when it comes toutilizing a Factoringagency-- theyusually are not like afinancial institution or somebody who is going to leave you with asignificantheap offinancial obligation torepay. You give themlegitimate invoices from work you have already finished , you are merelyquickening therepayment process.
In theUsa, where truckingestablishmentssurvive, factoring companies are not considered borrowing in any capacity. This confidentialsettlement thenpermits both parties to profit andexperience aconvenient future-- itprovides the factoring company asecured asset ofcash flow to add to the list and itoffers the trucking firm therequired cash that they worked hard toobtain.
The trucking companypresents theiraccounts to the factoringagency. The trucking factoringprovider thentake thepayment amounts from the trucking company'sclients. Factoring has been all around forcenturies and has beenutilizedfordecades byplenty ofdiversebusiness sectors-- but none more so than truckers. While youmay welllose out on a small part of the money, something like 1-3 %depending upon who youteam up with, itimplies that you areacquiring thefunds today and can actuallystart off putting thecash toperform.
After all, an IOU or an invoice is not going tofund expenses, is it? For trucking companies when the money can befantastic one day and gone the next, it's up to thevehicle driversto work sensibly and toascertain they are leaving themselves with asubstantial amount of time andmoney to get through the weektill they arehanded overonce more.
So the nextmoment your truckingcompany isbearing some short-termcapitaltroubles and you areinvestingexcessive time chasingslowly payingclienteles, why not starttaking into consideration using a factoringcompanies as amethod to get yourcash and give yourself a morepleasant future in the eyes of yourtruckingcrew and your bankdividend?
Traditional Bank Loans
Bank loans are an extremely traditional way for a business to get financing. These loans can be a life-saver, but they're not always available to every business. 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 loseyour entire business. Plus, the amount you apply for through the bank is the actual amount that you are going to receive. Of course, once that loan has been re-paid, you can always re-apply for another loan.
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. Rather the financing you receive from a Trucking Factoring company is based on money your business has alreadyearned, 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 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 theready cash you need to meet your own obligations.
Benefits of a Trucking Factoring Company Vs. A Bank Loan
While not every business can take advantage of Trucking Factoring account financing (you have to have a business that has account receivables) for those that can use this type of financing there are several distinct benefits.
1.There is no debt. You don't incur debt as you do with a bank loan because the Trucking Factoring company actually purchases your accountsreceivable. One of the main benefits of this kind of financing is that your business credit rating and your personal credit rating won't be affected. 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. The debt goes onto your credit report with a bank loan, with only one missed payment adversely affecting your business credit: it would also affect your ability to secure insurance, and may reflecton your personal credit rating as well.
2.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. 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 anissue. 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. The money will normally be in your account within 24 hours, once the Trucking Factoring companyis confident that your customers� accounts are likely to be paid. Borrowing from a bank begins with vast amounts of paperwork, the loan must be underwritten, and this can take ages before you're notified if the loan has been approved.
4.Interest is Paid 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 totalamount 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, there are several benefits that makes considering financing through a Trucking Factoring company over a traditional bank worthwhile. In addition, there are other benefits that a Trucking Factoring company can offer you, outside the scope of a bank. The most importantbenefits is that once you sell your accounts receivable to the factory company, you don't have to take time away from running your business to collect the money owed from reluctant to pay customers. The Trucking Factoring company takes over that chore, since it is now their money to collect. Trucking Factoring companies are very efficient at debt collecting, and this frees up your valuable time to devote to running your company.
In addition, since the Trucking Factoring company evaluates the creditquality 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.