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Trucking Factoring is advantageous for numerous reasons. It enables a trucking business to raise cash without acquiring brand-new financial obligation. While financial obligation is sometimes essential, many trucking companies would like to raise money without borrowing money. Debt is dangerous, and when it can not be repaid, possessions can be repossessed. If the debt is huge enough, it could even require a truck companies out of business.
Check the Kind of Bank Account You Want - Select
An Accounts Receivable Factoring Company Instead Of A Traditional Bank Funding
Exactly how to Enhance Money Flow Without Borrowing -Cash Money flow is one of the main reasons companies fail.
At one time or another, every business, even effective ones, have actually experienced poor money flow.
Money flow does not have to be a problem any ever more. Do not be fooled -- banks are not the only locations you can get funding. Other options are available and you do not have to borrow. Exactly what is trucking factoring ? One option is called receivable factoring rates. Truck Factoring is the process of selling invoices to an investor instead of waiting to collect the money from the
customer. Oh, the Irony- Trucking factoring has a paradoxical difference:
It is the financial
foundation of many of America's most effective businesses. Why is this paradoxical ? Since staffing factoring is not taught in business colleges, is seldom discussed in business strategies and is fairly unidentified to bulk of most of American company people.
Yet it is a financial process that frees billions of dollars every year, enabling thousands of businesses to grow and succeed. Staffing Factoring has been around for thousands of years. Accounts Receivable Factoring Companies 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 actually to pay in the near future. Factoring Principals--Although factoring
offers exclusively with business-to-business deals, a big percentage of the retail company uses a factoring principal. MasterCard, Visa, and American Express all use a form of factoring in their retail transactions. Utilizing the purest definition of the word, these large customer finance business are really simply large Commercial Factoring Companies of consumer paper. Consider it: You purchase at Sears and charge
it to your MasterCard. The shop gets paid almost instantly, even though you do not pay up until you are prepared.
For this service, the credit card business charges Sears a fee (typical common normal fees range from 2 to four percent of the sale). The Advantages Receivable Financing can provide many advantages to cash-hungry business. 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 cash at a little price cut
off the dollar value of
the invoice. Payroll, advertising efforts, and working capital are just a few of the company needs that can be satisfied with instant cash.
Receivable Factoring Rates offers the means for a producer to replenish stock and make even more items to sell: There is no longer a requirement to await for earlier sales to be paid. Receivable Loan Financing is not just a money management device for manufacturers: Practically any kind company can benefit from Commercial Factoring. Typically, a company that extends credit
will have 10 to 20 percent
of its yearly sales bound in accounts receivable at any given time. Think for a minute about how much is tied up in 60 days' worth of invoices: You can not pay the power bill or this week s payroll with a customer s invoice, but you can offer that invoice for the cash to meet those responsibilities. Using trucking factoring companies is a fast and simple procedure. The factoring company purchases the invoice at a discount, typically a few percentage
points less than the face value of the invoice.
Please call our truck factoring specialists at 1 - 888-239-9162
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The U.s. Trucking Association
specifies that there around
195,000 truck drivers with transportation
250,000 private companies trucking
companies licensed to
operate in the United States that transported,
according to their most current listings of millions of
products, materials and
basic products .
There are a number of typical
teams on our nation
roads transferring these
important items to our
stores, manufacturingplants and shipping ports.
many of them and offer their
receivable loan services
including the following states.
Alaska, Arizona, Arkansas,
California, Colorado, Connecticut, Delaware,Florida,
Georgia, Hawaii, Idaho State,Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,
Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska,
Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina,
North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina,
South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia,
Wisconsin, and Wyoming
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.
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.
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
Since the mid 1980s Lopez Truck & Haul have been successfully running their freight business. For more than twenty years they've been delivering goods for most major industries in the nation, with business booming as they traversed the country, in all kinds of weather, for all kinds of clients. During the heady times from 2002 to 2007, Lopez was a top rated accounts receivable mastermind of 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. The money was flowing, and times were great.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 down. Worse still, it was noticed by Lopez 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 Lopez, Scott Rice, was beginning to feel very uncomfortable indeed whenever he looked at their weekly Accounts Receivable 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? 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 Lopez 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 Lopez hadn't gone elsewhere. The had just gone!.This current state-of-affairs was causing Scott Rice to have some very restless nights. 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, Amy, 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.""Well, what do you think it is?"" she would ask.Scott would stare off into the distance, and then slowly close his eyes. In his mind he could clearly see the fleet of trucks purchased over the many years. He could see them traveling, bringing goods to all of his clients. But 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 know what it is,"" said Scott. ""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.
""Scott 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 following day Scott walked into his office with a spring in his step, determined to call each and every client who owed money to Lopez Truck & Haul. This wasn't really a very efficient way for a Chief Executive to spend his day, and Scott 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 Scott was realising just how much trouble he was in.Poor Scott 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.
""Scott, can I have a word?"" she asked standing in the doorway.
""Of course Edith, please come in."" Scott leaned back in his chair and looked expectantly at Editherely.""Well Scott, 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 of factoring?"" she asked.""It sounds vaguely familiar. What is it?"" he said.She began, ""Well, it's really very simple. So basically, factoring invoices would enable us to get paid on the nose for loads that we haul.""Scott interrupted ""Immediately?"".""Immediately, yes"" she added, ""It's actually very simple. We can have an expert account manager review our numbers and help us complete a company profile. That profile will also include investigating our accounts receivable aging reports, our existing customer credit limits and so on. In addition, factoring will assist in determining our customers' creditworthiness, independent from their credit relationship with our company. It�s a broad view.��I see,� Scott 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. Once we arrive at a mutual agreement, the funding begins.�Scott was still a little concerned. He leaned forward in his chair and studied the paperwork very closely.""It sounds too good to be true, Edith,"" he said.""Yes, I know; that's exactly what I thought at the beginning. 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. And they're flexible Scott,"" she underlined a paragraph on the paper before him.""Just 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. 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,"" Scott said.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.""Scott 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 Lopez. Scott wasn't prepared to lose these relationships just because they were having financial issues at the moment. Scott knew that the economy had taken a hit and he knew that it would probably be a long time before things started to look up again. That unknown amount of time could create a disaster situation for both of them if he wasn't careful in how these debtors were handled. Of course he didn't want to lose any more money, but he didn't want to lose business either.""Let me go over this tonight Edith, and thankyou."" Edith stood up and left Scott's office, with the nice feeling of knowing that she may just have solved a very serious problem.Scott 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 Lopez 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, Lopez could receive up to fifty-percent cash advances upon load pick-ups. Scott 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 Philip about this,"" muttered Scott to himself.Scott's son-in-law, Philip, loved the idea behind Lopez and highly respected his father-in-law for having such great business sense, that two years ago he got his capital together and started his own transportation company. Scott knew then what struggles Philip would face but he encouraged him nonetheless. With the faltering economy, if a big fish like Lopez was hurting, a little guy like Philip was about to catch his death. But, maybe the answer for both of them was in freight factoring, and Scott was going to find out very soon.A few short months later, after completing the application process, having the legal experts review his credit history, accounts receivable, and statements, finally Scott 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 to collect debts. They used that time to refocus their efforts in being competitive in new territories. Scott looked back on the dismal months of life before freight factoring and almost shuddered at the thought. He probably wouldn't be in business today had he not learned just in time about freight factoring.
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The Future of a Trucking Company, and Factoring Chris Alexander 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. Alexander 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 Chris's father had started this business working as an owner-operator and eventually growing Alexander 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 Chris'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. But now things were different: the company was in Chris's hands and he needed to ensure that this business would be left in great shape for his sons.
To move Alexander 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. 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, Alexander Trucking looked weak in a very strong market.
He knew what his father would have said - 'wait, take your time before adding new technology'. Chris allowed himself a good hard chuckle. His father had been against placing GPS units in the cabs. His Dad would say ""Why on earth do you need some stranger telling you to get off the exit that everyone knows has been there for years?� He smiled to himself as he remembered his father poking fun at the other drivers who switched to automatic, even though automatic was quite obviously more efficient (though less manly). 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.
Chris knew he was right in his forward thinking. What would be the next step for Alexander Trucking? More importantly, how could he 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? 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. During those thirty days the trucking company can't pay its employees and bills with invoices.
Chris 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 heard about how some companies suddenly slipped you onto a sliding scale of percentages even if you had already signed a lengthy contract for maybe 3% or 7% so there you are with 10% coming as a cost to you out of the freight bill. His friend Ronnie who had a trucking business in Missouri, was run nearly into the ground by a factoring company that charged him the full freight bill on top of the factoring fees. Well, what was the point of going to a factoring company if there was shady business like that going on?
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 didn�t mind signing an exclusive contract. In fact, he was quite pleased with the idea of a long-term contract because he knew this was a one-off and he wouldn't have to keep going back and forth to different companies. Nobody charged him 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. He was more than happy with the figures he was offered in percentage terms on the freight bills. It sounded like a great scheme to him.
For Chris it was quite a relief to be dealing with the factoring company. They were extremely helpful and more personable than the bank staff. He was relieved to note that the factoring companies understood the trucking business and discussed business with him like a respected client, not like someone looking for a handout. The factoring companies were not interested in his credit nor the financial problems his father had experienced in the past. All the factoring company was interest in was the credit of his customers and on their reliability: this worked great for Chris because he and his father had created a very strong and loyal list of clientele over the years. So he knew they would understand when the factoring company contacted them for the invoices. His clients wouldn't have any problems, nor would they think poorly of Alexander Trucking, because the factoring companies handle themselves in such a polite and professional manner, similar to the way his father had managed the business in the past.
Feeling happier now, Chris stepped out of his office to advise his secretary to expect to receive the contract very shortly from the factoring company. There was a new bounce is his step now: he knew instinctively that this new step would raise the future of his company to a new and higher level, and that all the stress from the past could now be put behind him. He suddenly realized that, with this new cash flow, he could actually expand Alexander 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?� Miguel Henderson 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.Miguel Henderson 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 Timothy. He named his business Ferguson Trucking, named after Guy and Dustin, his two grandfathers. Both of these men had been very hardworking and had set a great example for Timothy.Six months ago disaster struck Timothy's business when two out of his fleet of fifteen trucks were taken off the road.
One was involved in a very costly accident, and the other simply rolled over, and headed to the trucking graveyard. The financial security of Timothy'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.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. In the long run, this wasn�t an issue, but if problems arose, you could find yourself in trouble.Miguel wasn�t a bad owner, and he hadn�t messed up. 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.That�s where the woman across the desk came in. Miguel knew she was employed by a Factoring company and that her name was Felicia. Miguel 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 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. That way we�re protected from a complete loss, but you�re protected from the outrageous fees you would find in a loan from the bank.Miguel nodded. It sounded good to him, almost too good.Felicia laughed. �I'm not sure that you believe me,� she chuckled.�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.�Felicia smiled, agreeing. �We get that a lot. 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. We all need help sometimes. That�s what we�re here for.��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,� Felicia said with a smile. �Let's work out a solution to your problem.�And right there and then they created a business profile. Miguel filled the form out, with Felicia available to help him if he needed it. The profile filled Felicia and her company in on Timothy�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. Listening as Miguel filled out his form, Felicia was pretty sure he was a perfect candidate for factoring.Felicia took the completed form and placed it in her briefcase. Standing up, she reached over the desk and shook Timothy's hand. He also stood up, and they smiled at each other. Miguel walked Felicia 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 probably take him with it. Talking to Felicia though, learning about factoring, it felt like a weight had been lifted from his shoulders. He relaxed into his chair, running his hand through his thick black hair with its telling streaks of grey.The long nights, where he couldn�t sleep. The sudden panic attacks, not matter where he was. He could feel it all fading away. He 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 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. At twenty-two and straight out of school he had opened a restaurant. It had been really successful. Offering home cooking in his own hometown, his business had really prospered.But 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 Ferguson Trucking. And that's exactly what he did. For the second time in his short life he created 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 nearing fifty. He didn�t think he had it in him, to save this company. But he couldn�t give up. The idea of cutting his losses, shutting down, laying off his workers, it actually made him sick some nights. He didn�t know how to say quit.And now, because of factoring, he was sure he wouldn�t have to. Miguel opened his eyes, sat forward, turned his computer on. He had things to do. He could be thankful later, for now, it was time to work.
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Why Trucking Companies Make use of Factoring Companies.
As the owner of your own establishment, you may perhaps be more than mindful already of the hardship in making certain that capital concerns do not become a predicament down the line. Anyway, the toughest thing that can potentially come about for your establishment is to find yourself dragged in a long and hard situation that leaves you forever searching for the resources you are in need of on an continual basis.
For just about any business in this condition, the problem can come for waiting for work to lapse and actually be brought in into your statement. Bill of sales, checks, and the like can take a while to actually to beprocessed which can easily leave you with short-term capital difficulties. Luckily, there are alternatives out there for businesses to delve into-- and just one of these is factoring companies.
Factoring firms will, in exchange for your invoices, offer you with the money now so that you don't have to fret about the waiting time span which could make paying the expenses and obtaining toolsmore tough. With this type of setup, invoice factoring can become extremely useful for lots of companies who have to avoid a money trap which they have found themselves in.
Given that, depending on the size of the work, it can take up to 60 days for some business enterprises to get paid then it's essential to take care of your own back and certainly not leave yourself cash short to pay the costs. After all, how many establishments possess two months profits just lying there to pay for all their expenditures till they get paid?
This is specifically true of trucking enterprises. They tend to handle numbers of invoices which means a huge quantity of collection period entails company owner themselves. Making an effort to get paid promptly can develop into an amazing trouble and this is the reason why you employ trucking factoring agencies who are happy to help out truckers mainly.
As we all realize, trucking is an surprisingly massive business with many firms out there utilizing hundreds of operators. Unfortunately, numerous of these drivers land up in income problems given that they are still waiting on work from six weeks back to actually compensate them. When this is the case for a truck firm, choosing factoring agencies for help may be the most suitable alternative left.
This means that a trucking corporation can compensate the paychecks of the work force, keep all the vehicles refilled with gas and continue to escalate, grow and expand without consistently waiting for the funds which is taking too prolonged to come in. Trucking Enterprises running without a factoring system used are leaving themselves at notable danger, as contenders cash out quickly and carry on to grow.
There's genuinely nothing at all to be worried about when it comes to making use of a Factoring contractor-- they aren't like a banking company or somebody who is going to leave you with a significant mass of debt to repay. You give them legitimate invoices from output you have already completed , you are only accelerating the repayment process.
In the United States, where trucking establishments flourish, factoring enterprises are not considered taking on loan in any capacity. This confidential settlement then makes it possible for both parties to benefit and indulge in a good future-- it provides the factoring agency a secured asset of money to put into the list and it supplies the trucking company the required money that they worked hard to earn.
The trucking enterprise bestows their invoices to the factoring agency. The trucking factoring agency then acquire the payments from the trucking company's customers. Factoring has beenaround for centuries and has been adopted for several years by plenty of varying sectors-- but none exceeding so than truckers. While you could miss out on a small part of the money, something like 1-3 % depending on who you team up with, it signifies that you are acquiring the finances today and can actually start off putting the money to work.
After all, an IOU or an invoice is not going to pay for spendings, is it? For trucking agencies when the resources can be good one day and gone the next, it's up to the vehicle drivers to work smartly and to make sure that they are leaving themselves with a considerable amount of time and money to get through the week up until they are paid once again.
So the next moment your trucking company is enduring some short-term cash flow problems and you are investing excessive time chasing sluggish paying clienteles, why not begin looking at employing a factoring businesses as a method to get your money and give yourself a more worry-free future in the eyes of your trucking staff and your bank balance?
Traditional Bank Loans
Finance through a bank loan is the normal, or traditional, way of financing your business. These loans can be a life-saver, but they're not always available to every business. For example, a fairly newly established business simply may not have the assets to readily get a loan from a bank, even if they do, the standard collateral for a business loan is the business itself, which means that if you cannot make your loan payment, you risk losing your entire business. 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 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 money you can receive is based on the amount of money you have earned and the accounts receivable you are willing 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.
Benefits of a Trucking Factoring Company Vs. A Bank Loan
Not every business can benefit from Trucking Factoring account financing because you have to have a business with accounts receivable, however there are many benefits for those who can access this type of finance.
1. 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. 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 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. You'll receive the money faster. With a Trucking Factoring company you can actually get the money you need faster. The money will normally be in your account within 24 hours, once the Trucking Factoring company is 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.You receive interest up-front. With a bank loan interest continues to build, and this has to be paid the whole time you have a business loan; however with a Trucking Factoring company there is no interest - they take it right off the top by deducting it from the total amount of receivable accounts. So you don't have to worry about monthly loan repayments, and you don't have to worry about the amount of interest payable, because all the money in the account is yours to spend.
As you can see from the above, there are some great benefits to financing through a Trucking Factoring company, and not through a traditional bank loan. However, there are also a couple of other benefits that a factory company can offer your business is far beyond the scope of the bank. The most important benefits is that once you sell your accounts receivable to the factory company, you don't have to take time away from running your business to collect the money owed from reluctant to pay customers. 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.
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.While a Trucking Factoring company is not the only way for your business to obtain the money it needs to keep growing, it does offer a type of financing well worth considering.