With over half a million trucking companies in the country, you are in good company! Did you know that 80% of these businesses have less than 20 trucks in their fleet? Did you also know that most of these small and medium-sized motor carriers rely on factoring companies to help with their cash flow?
Many trucking companies can struggle with the cash flow constraints that arise from having to wait 30, 60 or even 90 days for your clients to pay you. Whether you are a freight broker, a motor carrier or you manage a team of truck drivers, you know that the gap between shipments delivered and payments processed can put a significant amount of strain on your working capital and ability to cover your costs.
One way to get instant access to your cash is by factoring your invoices. An invoice factoring company will essentially ”buy” your freight bills and pay you a large portion of the invoice total upfront. Once your customer has paid, the factoring company will give you the outstanding amount minus a small factoring fee.
Invoice factoring is different from a traditional bank loan. Factoring isn’t a loan so no additional lines of debt will be added to your business. Another difference is that the process of getting approved for factoring isn’t as lengthy as the process involved with getting a loan from a bank. A factoring company will typically look at the creditworthiness of your clients instead of your company’s assets or credit history.
Partnering with a factoring company is like getting paid immediately by your customer. When you work with a factoring company that specializes in trucking, you’ll also enjoy value-added benefits, such as fuel discount cards, tire discounts, freight bill processing and more.
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