Trucking Factoring is useful for a number of reasons. It allows a truck company to raise cash without getting brand-new financial obligation. While debt is in some cases required, most trucking firms would prefer to raise cash without borrowing money. Debt is dangerous, and when it cannot be paid back, assets can be repossessed. If the financial obligation is big enough, it may even force a truck businesses out of business.
Don't Even Think About Gpoing To The Bank Without Reading This Report - Choose
A Truck�Factoring Company Instead Of A Traditional Bank Financing
Exactly how to Increase Money Flow Without Borrowing -Cash Money flow is among the primary reasons businesses fail.
At one time or another, every business, even effective ones, have experienced bad money flow.
Money flow does not have to be a problem any more. Do not be deceived -- banks are not the only places you can get funding. Other options are offered and you do not have to borrow money. Exactly what is trucking factoring ? One option is called staffing factoring companies. Truck Factoring is the process of selling accounts receivable to an investor rather than waiting to collect the money from the
client. Oh, the Irony- Truck factoring has an ironic difference:
It is the financial
foundation of numerous of America's most successful businesses. Why is this paradoxical ? Because receivable financing is not taught in business colleges, is seldom discussed in company plans and is fairly unknown to bulk of most of American business individuals.
Yet it is a financial process that releases up billions of dollars every year, allowing countless businesses to grow and prosper. Commercial Factoring has been around for countless years. Commercial 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 debt your customer has to pay in the near future. Factoring Principals--Although factoring
deals solely with business-to-business transactions, a large percentage of the retail business utilizes a factoring principal. MasterCard, Visa, and American Express all utilize a form of factoring in their retail transactions. Utilizing the purest meaning of the word, these large consumer finance companies are truly simply large Commercial Factoring Businesses of consumer paper. Think about it: You make a purchase at Sears and charge
it to your MasterCard. The shop makes money practically immediately, although you do not make payment until you are ready.
For this service, the credit card company charges Sears a fee (typical common normal fees range from 2 to four percent of the sale). The Advantages Staffing Factoring can offer many advantages to cash-hungry business. Rather than wait 30, 60, 90 days or longer for payment on a product that has currently been delivered, a business can factor
(sell) its receivables for money at a small discount
off the dollar value of
the invoice. Payroll, advertising efforts, and working capital are just a few of the business requirements that can be satisfied with instant cash.
Staffing Factoring Companies provides the ways for a manufacturer to renew inventory and make even more products to offer: There is no longer a need to wait for earlier sales to be paid. Receivable Loan Financing is not simply a cash management tool for manufacturers: Practically any kind company can take advantage of Truck Factoring. Typically, a business that extends credit
will have 10 to 20 percent
of its yearly sales tied up in invoices at any given time. Think for a moment about exactly how much is tied up in 60 days' worth of invoices: You can not pay the power expense or today s payroll with a client s invoice, but you can sell that invoice for the money to satisfy those responsibilities. Using trucking factoring companies is a quick and simple process. The factor purchases the invoice at a price cut, usually a few portion
points less than the stated value of the invoice.
The United states Trucking Association
mentions that there around
200,000 work with truck
276,000 personal companies trucking
firms accredited to
run in the States that carried,
according to their most current data of millions
products, materials and
fundamental materials .
There are a number of usual
groups on our nation
roads carrying these
vital items to our
shops, manufacturing facilities and shipping ports.
And trucking factoring
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
Life of a Truck driver, like many other professionals can be very challenging, rewarding, and frustrating at the same time. �The 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
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 Top 50 Trucking Companies list, based on data prepared by Consulting Group in Pittsburgh.
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.
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.
Life of a Truck driver, like many other professionals can be very challenging, rewarding, and frustrating at the same time. �The 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
EveryJob is a free service dedicated to helping professional truck drivers find new truck driving jobs with the best trucking companies hiring today!
Locate truck driving jobs by city, state, position andenefits offered. Search current driving jobs and fill out the EZ truck driver application customized for cdl trucking jobs
Since the mid 1980s Phillips 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, Phillips 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. Times were great for everyone, and the cash was flowing.But a short year later, in the fall of 2008, when the United States economy took a nosedive and businesses both small and large began to feel the pinch on their pocketbooks, those that used to make their demands had suddenly and largely gone silent. Business slowed to a crawl
. Worse still, it was noticed by Phillips 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 Phillips, Douglas Fuller, 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 gone to his administrators and asked them what the problem had been. 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. Perhaps he was losing his customers to his competitor, who seemed to offer very low prices with no guarantee of quality or performance, and these clients who were in debt to his company had possibly disappeared leaving him stranded. They could not 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 Phillips hadn't gone elsewhere. They had just gone home.The situation looked dire to Douglas Fuller. 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, Janet, 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.Douglas 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 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 know what it is,"" said Douglas. ""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."" All Janet could do was hold his hand and look at him tenderly. 'We know it is a difficult economy at the moment - perhaps it will take a while for people to get on top of their bills'.""Janet was trying so hard to support her husband in these worrying times, while Douglas was weighed down with the worry of how he was going to handle this situation he found himself in.The following day Douglas walked into his office with a spring in his step, determined to call each and every client who owed money to Phillips Truck & Haul. Now, it wasn't the most efficient way to spend a day as a chief executive, what he really needed to be doing was to be overseeing all of the other intricacies of shipment and delivery and reaching out to prospective clients or retraining his sales team to do the same. 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. Wasting money, wasting time - even with the best of intentions, Douglas knew that he was in trouble.
Poor Douglas 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.
""Douglas, can I have a word?"" she queried, standing in the doorway.
""Sure thing Dora, come on in."" Douglas relaxed back into his chair and looked up at Doraerley.""Well Douglas, this afternoon I did some research, trying to work out how we are 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?"" Doraerley asked.""It sounds vaguely familiar. What is it?"" he said.""Well,"" she began, ""It�s actually quite simple really.
So basically, factoring invoices would enable us to get paid on the nose for loads that we haul.""Douglas interrupted ""Immediately?"".""Immediately, yes"" she added, ""it is actually very simple. 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�s a broad view.""I see,� Douglas said. �And then what?""Following the completion of their review and once we have been approved for a contract with the factoring company, then we sit down to negotiate conditions and terms. There�s a lot of flexibility depending on the business volume and credit histories. 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.�Douglas leaned forward and reviewed the paperwork closely.""It sounds too good to be true, Dora,"" he said.""Now, now, I know, I thought the same thing. But think about it, Douglas: 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. They appear to be very flexible, Douglas,"" she underlined a paragraph on the paper before him.""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. Apparently they can figure this all out in two to four days.
""It does all sound pretty good, remembering that we are all tapped out now with loans from the bank last year to repair vehicles, and we all know just how tight money is. it is imperative that we keep the business rolling as usual, and every day we go unpaid we are getting closer and closer to dealing with some serious issues in both the short term and the long term,"" said Douglas.He took a deep breath and looked at his secretary with something she recognized as hope.""Exactly�. This could very well be the answer to resolving the problems we are having with these clients who still owe us money.""Douglas thought about this and agreed with Doraerley. The customers who were in debt to Phillips Truck & Haul were professional resources of the company, but they were also long-standing friends. Douglas wasn't prepared to lose these relationships just because they were having financial issues at the moment. Douglas knew only too well that the whole economy was floundering, and that it was not going to change overnight. If he did not handle these debtors in the right way, that unknown amount of time could spell disaster for all of them. Of course he did not want to lose any more money, but he did not want to lose business either.""Well, let me think about this tonight Dora, thank you."" Dora nodded, stood up and left the office feeling that she had helped her employer keep on his shirt and hers too.Douglas sat behind his desk and looked over the details Dora had not mentioned in their meeting. He wondered if there might be other problems freight factoring could help Phillips 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, Phillips 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 fees and there was no minimum volume required.""I must tell Jimmie the good news,"" Douglas muttered to himself.Jimmie is Douglas's son-in-law, and he really admired the ideas behind Phillips, so much so that only two years before he had started his own transportation service business. At that time Douglas knew the struggles Jimmie would face, but he still encouraged him to follow his dream. With the faltering economy, if a big fish like Phillips was hurting, a little guy like Jimmie was about to catch his death. Perhaps the antidote to these problems was in freight factoring, and they were about to find out.A few months later after going through the entire application process and having the experts review his accounts receivable, credit history and statements, Douglas found himself beginning to dig his way out of the hole his delinquent account holders had created for him.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. Douglas recalled those dismal months when he wasn't aware of freight factoring, and he shuddered at those memories. If Douglas hadn't discovered freight factoring at just the right time, his business may not be operating today.
More Trucking Factoring Companies Story Articles
Trucking Factoring Companies
Factoring in the Future of a Trucking Business: A Story Jerome Payne 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. Payne 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 Jerome's father had started this business working as an owner-operator and eventually growing Payne 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 Jerome's mother had jumped into the cab at times to make hauls. His father had worked long enough to see the price of hires drop dramatically during the recession and to see the explosion of fuel prices afterwards. But now things were different: the company was in Jerome's hands and he needed to ensure that this business would be left in great shape for his sons.
To move Payne 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 getting for loads of new energy and agriculture equipment. Every time he had to turn down a request, Payne Trucking looked weak in a very strong market.
His father would have told him to wait and to take his time adding on new technology. Jerome 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 been there for years?� Also his father had the habit of teasing all the drivers he caught switching into automatic even though driving in automatic was much more efficient though not manly in his father�s eyes. 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.
Jerome believed a successful man is always thinking of his next step. How would he take Payne Trucking to the next level? More importantly, how could he afford it? Funding was all tied up in the mortgage for the office and garage and in the fuel bills. Thankfully he'd just finished paying off the bank loan for the installation of satellite radio in the trucks.
But was factoring the answer? There was a lot he didn�t understand about the process. It sounded a lot like ninth grade algebra which just didn�t feel like it belonged as part of the trucking business. Factoring companies buy your invoices and manage your accounts receivable for a certain percentage of the invoiced amount. In return, the factoring company pays the trucking business straight away, providing immediate cash flow for the business to pay staff, purchase fuel, and do any repairs or maintenance. Without 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 cannot pay its employees and bills with invoices.
Now it was time for Jerome to do his homework. Jerome had heard that there were companies that charged for same day money transfers and would only advance a percentage of the money owed to your company while holding the rest in a private account if they didn�t get their bill payment within 60 or so days. Worse still, if the customer defaulted on payment, the factoring company takes it out of the money supposedly coming to you! 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 colleague, Ronnie, who owned a trucking company in Missouri, was nearly destroyed by a factoring company who charged him the full freight bill on top of the fees for factoring. He knew he would have to be very careful if he was to avoid any of these shady companies?
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. Their customer service actually knew things about their company and spoke in nice clear English so he could understand what was being explained. He was quite happy to sign an exclusive contract. In fact, he was quite pleased with the idea of a long-term contract because he knew this was a one-off and he would not have to keep going back and forth to different companies. He was not charged for a credit check, and in addition he was offered a fuel advance on the pick-up of a 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 sounded like a great scheme to him.
It was really refreshing dealing with the factoring people. They were extremely helpful and more personable than the bank staff. It seemed as though those bank people spoke another language, but these factoring guys knew the trucking business and spoke to him like a client, not like a beggar for a handout. The factoring companies 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 Jerome 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 be any problems when they were contacted by the factoring company regarding their invoices. His clients wouldn�t think poorly of Payne 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.
Jerome stepped out of his office to let his secretary know to expect the arrival of the factoring contract shortly. 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. He suddenly realized that, with this new cash flow, he could actually expand Payne Trucking Company and who knows, move into Canada, which had always been his dream. 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.
View Our Trucking Factoring Companies Videos For More Information
Trucking Factoring Articles
Trucking Factoring Companies
�So It is not a loan?� asked Jason Hudson, 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.Jason Hudson owned a small trucking company, and his business had recently fallen on difficult times. Trucking could be a profitable business, and for a little under a decade, it had been for Roland. His company was called Duncan Trucking, named after both of his grandfathers, Robert and Leroy. Both of these men had been very hardworking and had set a great example for Roland.Disaster had struck half a year ago, when two trucks in Roland�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 Roland's company relied on his full fleet on fifteen being on the road, and missing two trucks was just devastating . In addition, he just did not 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.Jason was an excellent business man, and he certainly hadn't done anything wrong. Things had happened that he could not have predicted, and he had to figure out a way to keep his business from hurting, or even going under.That�s where the woman across the desk came in. Jason knew she was employed by a Factoring company and that her name was Frances. 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�s not a loan, we purchase your accounts receivable. we are not giving you finance to be repaid later: we are purchasing something from you, and when you can you can buy it back. 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.Jason agreed. It sounded good to him, almost too good.Frances laughed. �You look like you don�t believe me,� she said.�No, I do, I just think it sounds a bit too good to be true. I actually thought I might end up losing my business.�Frances 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 why we do what we do.""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 Frances with a smile. �Let's work out a solution to your problem.�And with that they set about making a profile.
Jason completed the form, with Frances offering advice as needed.
The completed profile gave Frances and her company all the information they needed on Roland's business, and with this information they would determine if this business would in fact be 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 Jason filled out his form, Frances was pretty sure he was a perfect candidate for factoring.When the form was done Frances took it and slid it into her briefcase. Standing up, she reached over the desk and shook Roland's hand. He stood before they shook as well, and then smiled. They said their goodbyes and Jason walked her to the door, and then returned to his office.All his staff members were there, all seven who worked in his office. Sitting behind his desk once more he could hear the familiar sounds of his office workers going about their daily business.He 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 Frances 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. He could feel it all fading away. He wasn�t out of the woods yet, there was still a lot of work to be done, but he could feel it. He was 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.Jason 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 his restaurant. He took half a year off, and in that time he thought to start Duncan 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 did not have the energy left to try and save the business. But he couldn�t give up. Just the thought of shutting down, cutting his losses, laying off his workers - the whole thing made him physically sick some nights. He did not want to quit - both for himself and for his staff members.And now it seemed as though he would not have to - all because of Factoring. Jason 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.
More Trucking Factoring Company Story Articles
Trucking Factoring Companies
The key reasons why Truck Establishments Work with Factoring Firms.
As the manager of your own firm, you may well be much more than mindful already of the challenge in making certain that capital issues do not become a difficulty down the line. After all, the most terrible thing that can quite possibly transpire for your business is to find yourself involved in a long and hard situation that leaves you forever looking for the finances you really need on an recurring manner.
For any type of business in this scenario, the concern can come for waiting for work to clear up and actually be settled into your balance. Bill of sales, checks, and the like can take a while to actually to be taken care of which can certainly leave you with short-term available resources difficulties. Thankfully, there are opportunities out there for establishments to delve into-- and one of these is factoring companies.
Factoring agencies will, in substitution for your statements, grant you with the money right now so that you do not need to fret about the lingering time frame which could make paying the expenses and obtaining toolsmore complicated. With this kind of arrangement, invoice factoring can come to be extremely beneficial for lots of enterprises who need to get out of a money pitfall which they have gotten themselves in.
Due to the fact that, depending upon the volume of the job, it can take up to 60 days for some companies to get paid then it is essential to cover up your own back and definitely not leave yourself money short to pay the costs. After all, how many enterprises have two months profits just lying there to address all their expenditures till they earn?
This is especially correct of truck enterprises. They generally deal with good deals of accounts which means a notable amount of collection period concerns company owner themselves. Seeking to get compensated promptly can eventually become an amazing struggle and this is exactly why you employ truck factoring providers who are delighted to help out truckers mainly.
As we all determine, trucking is an astonishingly large industry with many firms out there utilizing hundreds of operators. Sadly, several of these drivers land up in cash dilemmas since they are still waiting on work from six weeks in the past to actually compensate them. When this is the condition for a trucking firm, depending on factoring firms for help could be the most suitable choice left.
This signifies that a trucking organization can pay off the paychecks of the people, keep all the trucks filled with fuel and continue to surmount, thrive and expand without consistently waiting for the money which is taking too long to come in. Trucking Establishments running without a factoring program put in place are leaving themselves at substantial danger, as contenders cash out rapidly and proceed to develop.
There's honestly nothing at all to be stressed about when it comes to using a Factoring establishment-- they commonly are not like a bank or any individual who is going to leave you with a significant pile of financial debt to pay back. You give them authentic invoices from work you have already accomplished , you are only speeding the payment system.
In the United states of America, where truck establishments grow, factoring firms are not considered getting a loan in any capacity. This private agreement then lets both groups to profit and take pleasure in a convenient future-- it gives the factoring agency a warranted asset of revenue to put into the list and it supplies the trucking company the required money that they worked hard to gain.
The trucking enterprise bestows their statements to the factoring enterprise. The trucking factoring firm then receive the installment payments from the trucking company's clients. Factoring has beenaround for centuries and has been adopted for many years by plenty of varied industries-- but none more so than truckers. While you may well miss out on a small part of the money, something like 1-3 % depending on who you collaborate with, it implies that you are acquiring the money today and can actually begin setting the resources to perform.
Once and for all, an IOU or an invoice is absolutely not going to pay for costs, is it? For trucking companies when the funds can be very good one day and gone the next, it is up to the drivers to work prudently and to ascertain they are leaving themselves with a substantial volume of time and finance to get through the week until they are handed over again.
So the next instance your trucking business is having some short-term cash flow issues and you are putting in way too much time chasing slow paying clienteles, why not begin looking at employing a factoring businesses as a means to get your finances and give yourself a more worry-free future in the eyes of your trucking crew and your bank balance?
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. 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 is usual practise for a bank to use the business itself as collateral. This means that if you default on your loan payment you could lose your entire business. In addition, while you apply for a certain loan amount, that is all the financing you are entitled to. 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 offer loans, and you do not go into debt when you get money from a Trucking Factoring company. The finance you receive from the Trucking Factoring company is determined by money already earned by your business, but 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
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. Since the Trucking Factoring company actually buys your accounts receivable you do not actually incur debt like you do with a bank loan. This has many benefits including the fact, that this type of financing will not affect either your business credit rating or your personal credit rating. In the event that your business fails, you would not 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 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. Plus, the state of your credit rating is not an issue; however the Trucking Factoring company will run a credit check on your clients whose accounts receivable are being offered for financing. This means that it is 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. Once the Trucking Factoring company assures itself that the customers in your accounts receivable are likely to pay their debt, the money is usually in the account within 24 hours. With a bank, there are vast amounts of paperwork, then the loan has to be underwritten, which can take months before you actually see the loan if it is approved.
4.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 total amount of receivable accounts. So you do not have to worry about monthly loan repayments, and you do not have to worry about the amount of interest payable, because all the money in the account is yours to spend.
As you can see, there are several benefits that makes considering financing through a Trucking Factoring company over a traditional bank worthwhile. 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 do not 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 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.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.