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Our Staffing Factoring Companies
Your Trucking Company
The Money Your Company Needs
Trucking Factoring is helpful for a number of factors. It enables a trucking company to raise money without acquiring brand-new financial obligation. While debt is sometimes essential, the majority of freight broker firm would prefer to raise money without borrowing money. Financial obligation is high-risk, and when it can't be repaid, possessions can be repossessed. If the debt is big enough, it might even require a truck companies out of business.
Great New Discovery Kills Cash Flow Problems Quick! - Select
The Best Factoring Company Instead Of A Typical Bank Funding
How to Increase Money Flow Without Borrowing -Cash Money flow is among the main reasons companies fail.
At one time or another, every business, even effective ones, have actually experienced bad money flow.
Cash flow does not have to be an issue any ever more. Do not be fooled -- banks are not the only locations 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 staffing factoring companies. Truck Factoring is the process of offering invoices to a financier instead of waiting to collect the cash from the
client. Oh, the Irony- Trucking factoring has an ironic difference:
It is the financial
foundation of many of America's most successful companies. Why is this ironic ? Because trucking factoring is not taught in business colleges, is rarely mentioned in business strategies and is fairly unknown to bulk of most of American company people.
Yet it is a financial process that frees billions of dollars every year, allowing thousands of businesses to grow and prosper. Commercial Factoring has been around for countless years. Receivable Loan Funding Businesses are investors who pay cash 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 to pay in the near future. Factoring Principals--Although factoring
offers exclusively with business-to-business transactions, a big percentage of the retail business utilizes a factoring principal. MasterCard, Visa, and American Express all use a type of factoring in their retail transactions. Using the purest definition of the word, these large consumer finance business are really just big Accounts Receivable Factoring Businesses of customer paper. Think about it: You purchase at Sears and charge
it to your MasterCard. The shop gets paid practically instantly, even though you do not pay up until you are prepared.
For this service, the credit card company charges Sears a fee (typical common normal charges vary from 2 to four percent of the sale). The Advantages Truck Factoring can offer many benefits to cash-hungry companies. Instead of waiting 30, 60, 90 days or longer for payment on an item that has currently been provided, a business can factor
(sell) its receivables for cash at a little discount
off the amount of
the invoice. Payroll, advertising efforts, and working capital are just a few of the company requirements that can be satisfied with instant money.
Staffing Factoring Companies provides the ways for a producer to renew inventory and make even more items to sell: There is no longer a need to await for earlier sales to be paid. FACTORING is not just a cash management device for producers: Practically any type company can benefit from Receivable Financing. Generally, a company that extends credit
will have 10 to 20 percent
of its annual sales tied up in invoices at any given time. Think for a moment about how much is tied up in 60 days' worth of invoices: You can not pay the power bill or this week s payroll with a customer s invoice, but you can offer that invoice for the cash to satisfy those responsibilities. Using trucking factoring companies is a fast and easy procedure. The factor buys the invoice at a price cut, typically a few percentage
points less than the stated value of the invoice.
Please call our freight bill factoring experts at 1 - 888-239-9162
or E-mail Us
The American Transportation Association
states that there are about
205,000 employees with truck
276,000 private service providers trucking
companies accredited to
operate in the U.S. that carried,
according to their most current listings of millions of
products, supplies and
fundamental materials .
There are a number of common
teams on our nation
highways transferring these
important products to our
stores, manufacturingplants and ports.
several of them and offer their
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
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Ross 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 Ross Truck & Haul was the mastermind of a top-rated accounts receivable in the trucking industry. Few customers were ever late on bills and those clients who were, were sure to turn in their late payments within a reasonable amount of time. Cash was flowing and times were good for all.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 down. Worse still, it was noticed by Ross 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. And as spring turmed to summer and summer into the early days of fall, Eugene Hunter, CEO of Ross felt a chill go down his spine whenever he would look at the weekly A/R reports. There was a growing list of clients who now owed them back debt.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 Ross 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. But after doing the cursory research for this and talking to friends in the field, he found that alas, no, customers of Ross hadn't gone elsewhere. The had just gone!.This current state-of-affairs was causing Eugene Hunter 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. In the evenings he would discuss his concerns with his wife, Marilyn, and still find no relief from the worry and frustration.
""I have a bad feeling, Lin,"" he'd sadly say to his wife.""Well, what do you think it is?"" she would say.Eugene would stare off for a moment and then close eyes. He could see the fleet of trucks he had purchased over the years. He could see them traveling, bringing goods to all of his clients. But somewhere, a haze would form over his fleet and the vast number of vehicles would disappear to but a few. Why couldn�t he work out how to resolve this financial problem with his business?""I think I know what it could be,"" said Eugene. ""For way too long I've been relying solely on profits received from invoices. I've let too many of our customers go too long without paying on their bills."" 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.
""Eugene knew very well that Marilyn was only trying to help, but his responsibilities weighed heavily on his shoulders and he knew he had better do something soon to resolve this situation.The next day Eugene strolled into his office and was determined to sit down and make every phone call to every client who had owed Ross money. This wasn't really a very efficient way for a Chief Executive to spend his day, and Eugene knew he should be overseeing all the other sides of the business, such as shipments and deliveries, approaching prospective customers, or working with his sales team. But, he felt like he was doing something proactive to help his business, even though he had staff on salary to do just that thing. A waste of time - a waste of money - he had the best intentions, but all the while Eugene was realising just how much trouble he was in.Poor Eugene 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.
""Can I have a word with you Eugene?"" she queried, standing in the doorway.
""Of course Violet, please come in."" Eugene relaxed back into his chair and looked up at Violeterley.""Well Eugene, 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?"" Violeterley 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.""""Immediately?"" Eugene interrupted.""Yes, immediately,"" she continued, ""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 profile would be the investigation of our accounts receivable aging reports, our current customers' credit limits etc.. In addition, factoring will assist in determining our customers' creditworthiness, independent from their credit relationship with our company. It provides a very broad view.��Eugene replied cautiously ""I see - and what happens then?��Following the completion of their review and once we've been approved for a contract with the factoring company, then we sit down to negotiate conditions and terms. You'll be surprised at the amount of flexibility, all dependent upon the credit histories and business volume.
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.�Eugene was still a little concerned. He leaned forward in his chair and studied the paperwork very closely.""It sounds too good to be true, Violet,"" 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. They appear to be very flexible, Eugene,"" 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. It only takes 2 to 4 days for this to be figured out. """"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 Eugene.He took a deep breath and looked at his secretary with something she recognized as hope.""Precisely�. This could very well be the answer to resolving the problems we're having with these clients who still owe us money.""Eugene thought about this and agreed with Violeterley. The customers who were in debt to Ross Truck & Haul were professional resources of the company, but they were also long-standing friends. Just because they were experiencing difficulties paying their own bills now, Eugene was very concerned about losing these relationships. Eugene 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, if he handled these debtors incorrectly, could spell disaster for both of them. 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 Violet, and thankyou."" Violet nodded, satisfied with her work, and she left the office feeling quite content in the knowledge that she had helped Eugene keep the shirt on his back, and possibly hers too.Eugene 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 Ross 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. Eugene was surprised: it said that his company could get up to fifty percent cash advances on load pickups. Eugene 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 Nathaniel about this,"" muttered Eugene to himself.Eugene's son-in-law, Nathaniel, loved the idea behind Ross 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. At that time Eugene knew the struggles Nathaniel would face, but he still encouraged him to follow his dream. With the economy the way it was, if an established company such as Ross was struggling then the little guys, like Nathaniel, were going to be in even more trouble. But, maybe the answer for both of them was in freight factoring, and Eugene 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, Eugene 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 took that time and refocused effort to offering competitive prices in new territories. Eugene recalled those dismal months when he wasn't aware of freight factoring, and he shuddered at those memories. If Eugene hadn't discovered freight factoring at just the right time, his business may not be operating today.
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The Future of a Trucking Company, and Factoring The phone was ringing on his desk, and Ricky Kennedy just sat there letting it ring. His morning coffee cooled and his cigarette smoked away in the tray: Ricky is thinking, and pondering the biggest decision he's ever had to make for his trucking business. Kennedy Trucking Company was at a turning point of growth and Ricky had to decide if signing with a factoring company was the right way forward.
Ricky�s father had started as an owner-operator and had grown Kennedy 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 Ricky�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. Now the company was solely in Ricky�s hands and he wanted to live to see it in better shape for his sons.
There just never seemed to be enough money to go around, and certainly no spare cash, but to move his company successfully into the future he needed a steady and reliable cash flow. His employees needed to be paid. They had families and household bills too. Some of the refrigerated trailers were in need of repairs and he felt to stay competitive it was also a good idea to invest in specialized haulers to be ready for the constant requests he was getting for loads of new energy and agriculture equipment. Every time he had to turn down a request, Kennedy Trucking looked weak in a very strong market.
He knew what his father would have said - 'wait, take your time before adding new technology'. Ricky chuckled, thinking about his father. He remembered when his father was totally against installing GPS units in the cabs. He would say, �Why do you need the voice of some woman to tell you to get off at an exit that has been the same exit that has been there for years?� 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). He knew his father's days were long gone and new technology was very important for the business, like having Qualcomm to reduce communication time for bills of lading.
Ricky believed a successful man is always thinking of his next step. How would he take Kennedy Trucking to the next level? 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? 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 factoring company actually purchases your invoices and takes control of your accounts receivable, payment being a certain percentage of the amount invoiced. The factoring company gives the trucking business its payment right away which allows the business to have continuous cash flow so it can pay employees, buy fuel, and make repairs for upcoming hauls. Without the assistance of factoring, you have to wait for customers to send you the payment which is often 30 days late. In those 30 days, a trucking company can�t pay its bills and employees in invoices.
Ricky had to really consider what his next step was going to be. Ricky had heard that there were companies that charged for same day money transfers and would only advance a percentage of the money owed to your company while holding the rest in a private account if they didn�t get their bill payment within 60 or so days. Plus it was worse still if the customer didn�t pay up at all because then the factoring company would take it right out of the money supposed to be coming to you! 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. 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 was quite happy to sign an exclusive contract. In fact, he was quite pleased with the idea of a long-term contract because he knew this was a one-off and he wouldn't have to keep going back and forth to different companies. Nobody charged him for credit checks and they offered him a fuel advance on the pick-up of the load. Many companies offered a non-recourse factoring program that suited him just fine. He was more than happy with the figures he was offered in percentage terms on the freight bills. It was good money.
It was really refreshing dealing with the factoring people. They were more personable than those loan managers at the bank. He was relieved to note that the factoring companies understood the trucking business and discussed business with him like a respected client, not like someone looking for a handout. The factoring companies were not interested in his credit nor the financial problems his father had experienced in the past. Factoring was based on the credit of his customers and on their reliability which worked well for Ricky because he and his father had built up good strong relationships over decades with their list of clients. So he knew they would understand when the factoring company contacted them for the invoices. His clients wouldn�t think poorly of Kennedy 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, Ricky 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 make the future of the company fun again and put the stress of the difficult times behind him. With the capabilities of this new cash flow, Ricky could actually expand Kennedy Trucking Company further across the country and perhaps even go international into Canada. His heart felt full knowing his sons wouldn�t have to worry about money because of the right decisions he had made for their trucking business.
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Trucking Factoring Articles
�So It is not a loan?� Barry Green asked as he leaned back in his chair, crossing his legs. The woman sitting across the desk from Barry smiled at him, shaking her head.�No, not exactly,� she stated.Barry 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 Eddie. His company was called Austin Trucking, named after both of his grandfathers, Lewis and Bob. Both of these men had been very hardworking and had set a great example for Eddie.Six months ago disaster struck Eddie'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. Barry depended on his full fleet, and missing two trucks was 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. This system works okay as long as no problems arise, but if they do, then things can get quite sticky.Barry 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. Barry knew she was employed by a Factoring company and that her name was Loretta. He had accidentally come across her company one night when he was working late, searching the internet to see if there was some solution to his financial dilemma.She sat there now, and explained. �it 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.Barry nodded. It sounded perfect - perhaps too good?.Loretta laughed. �I'm not sure that you 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.�Loretta 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. Sometimes you need help. That�s what we�re here for.��Well, I'm very grateful that you came to see me today.��It�s right down the road, usually we do it all online, but I didn�t mind swinging on by today,� Loretta said with a smile. �Let's work out a solution to your problem.�And with that they set about making a profile.
Barry filled the form out, with Loretta available to help him if he needed it. The profile filled Loretta and her company in on Eddie�s company, and would help them determine if he was suitable for factoring. Unfortunately, not all companies are. Some businesses are beyond the help of a Factoring company, while other businesses weren't in enough financial stress to warrant it. Listening as Barry filled out his form, Loretta was pretty sure he was a perfect candidate for factoring.When the form was done Loretta took it and slid it into her briefcase. Standing up, she reached over the desk and shook Eddie's hand. He also stood up, and they smiled at each other. They said their goodbyes and Barry walked her to the door, and then returned to his office.His employees were there, seven who worked in the office, and as he sat behind his desk once more he heard the familiar clack of fingers on keyboards, the electronic whine of the copy machine.He shut his eyes. He felt so drained: he had been flailing helplessly for so long, he just knew his business was going to collapse and probably take him with it. But now, after speaking to Loretta and learning all about Factoring, he felt such a huge relief, like someone had just lifted a huge weight off his shoulders. He sat back in his chair and ran a hand through his graying but still thick black hair.The long nights, where he couldn�t sleep. The sudden panic attacks, not matter where he was. 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 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. He had opened a restaurant at age twenty two when he was fresh out of school. 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 six months off, and during that time he decided to create Austin Trucking. So he did it. 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 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 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. Barry opened his eyes, sat forward, turned his computer on. He had things to do. There would be plenty of time later to be thankful, but for now it was time to get back to work.
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The key reasons why Trucking Corporations Employ Factoring Companies.
As the owner of your own establishment, you may be much more than knowledgeable already of the challenge in making sure that capital matters do not become a difficulty down the line. Anyway, the most awful thing that can possibly take place for your company is to find yourself embroiled in a long and tough condition that leaves you forever looking for the funds you need to have on an recurring basis.
For pretty much any firm in this instance, the complication can come for waiting for work to lapse and actually be compensated into your bank account. Invoices, checks, and the like could take some time to actually to beprocessed which can easily leave you with momentary available resources problems. Gratefully, there are solutions out there for firms to delve into-- and one of these is factoring providers.
Factoring companies will, in trade for your invoices, offer you with the money right away so that you don't need to worry about the lingering time span that could make paying out the expenses and purchasing toolsmore tough. With this style of setup, invoice factoring can become tremendously useful for countless establishments who need to avoid a money ploy which they have discovered themselves in.
Given that, depending on the scale of the job, it can take up to 60 days for several enterprises to get paid then it's very important to blanket your own back and certainly not leave yourself cash short to settle the costs. After all, how many companies have two months revenue just occupying there to deal with all their expenses till they earn?
This is especially correct of trucking enterprises. They generally manage good deals of invoices which means a substantial amount of collection period concerns business owner themselves. Trying to get paid in time can develop into an amazing inconvenience and this is exactly why you make use of truck factoring organizations who are thrilled to help out truckers mainly.
As most of us determine, trucking is an incredibly big business with a lot of firms out there working with hundreds of vehicle drivers. Regretfully, several of these drivers wind up in income dilemmas simply because they are still waiting on work from six weeks previously to actually pay them. When this is the case for a truck organization, turning to factoring agencies for help could be the most suitable choice left.
This signifies that a truck organization can pay off the wages of the workers, keep all the cars loaded with gas and continue to go up, thrive and expand without consistently waiting for the funds which is taking too prolonged to come in. Trucking Businesses functioning without a factoring program used are leaving themselves at considerable hazard, as competitions cash out promptly and go on to expand.
There's honestly not a thing to be worried about when it comes to using a Factoring agency-- they aren't like a banking company or a person who is going to leave you with a massive mound of personal debt to pay back. You give them genuine invoices from work you have already accomplished , you are only just hastening the payment system.
In the United States, where truck establishments flourish, factoring establishments are not considered borrowing in any capacity. This private settlement then permits both groups to benefit and indulge in a convenient future-- it gives the factoring company a guaranteed resource of money to include in the list and it furnishes the trucking business the required cash that they sweated to gain.
The trucking establishment provides their statements to the factoring business. The trucking factoring business then receive the installment payments from the trucking company's clients. Factoring has been in existence for centuries and has been employed for decades by several diverse business-- but none much more so than truckers. While you might possibly lose out on a small part of the money, something like 1-3 % depending upon who you deal with, it implies that you are getting the finances today and can actually begin putting the funds to function.
Once and for all, an IOU or an invoice is absolutely not going to pay for bills, is it? For trucking agencies when the funds can be fantastic one day and gone the next, it's up to the vehicle drivers to work prudently and to guarantee they are leaving themselves with a substantial amount of time and finance to get through the week until they are paid for again.
So the next instance your trucking company is enduring some momentary capital troubles and you are shelling out excessive time chasing inactive paying clients, why not start off taking into consideration using a factoring businesses as a method to get your finances and give yourself a more convenient future in the eyes of your trucking workers and your bank balance?
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. 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. Once the loan is paid off, you can then apply for another loan if the need arises.
What Are Trucking Factoring Companies?
Trucking Factoring companies do not give loans, and the money you get from the Trucking Factoring company does not put you in debt. Rather the financing you receive from a Trucking Factoring company is based on money your business has already earned, but have not yet received. Trucking Factoring companies actually purchase your accounts receivable or at least part of them for a percentage of their total worth, Normally around 80%-95%. The amount of finance you can receive will be based on the amount you have earned and the accounts receivable you are prepared to 'sell.' Once a Trucking Factoring account has been created for you, it will continue for as long as you need it, with the money available continuing to grow as your business grows, and providing cash as you require it.
Benefits of a Trucking Factoring Company Vs. A Bank Loan
Not every business can benefit from Trucking Factoring account financing because you have to have a business with accounts receivable, however there are many benefits for those who can access this type of finance.
1. There is no debt. Since the Trucking Factoring company actually buys your accounts receivable you don't actually incur debt like you do with a bank loan. 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. 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. 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 reflect on your personal credit rating as well.
2. There's no collateral required. Another great benefit of using the services of a Trucking Factoring company instead of a bank loan is that there is no collateral required for the Trucking Factoring company, because the Trucking Factoring company is 'buying' your accounts receivables. 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. 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 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.Interest is Paid 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 not only are you relieved of those monthly loan payments, but you also don't have to worry about the building up of interest, as every penny in the account is yours to spend on the business.
As you can see from the above, there are some great benefits to financing through a Trucking Factoring company, and not through a traditional bank loan. In addition, there are other benefits that a Trucking Factoring company can offer you, outside the scope of a 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.