The dynamics of doing business have grown more and more complex over the last few years for trucking and fleet companies — largely due to the increasing challenges of the difficult industry combined with a start-and-stop economy that is becoming increasingly impossible to predict. Volatile market forces, the increasing demand to embrace emerging technologies, and slower-than-expected volumes all blend together to negatively affect your trucking company’s cash flow.
Even the most entrenched and successful trucking companies experience periods where their outgoing cash requirements exceed their cash on hand. Owners are always looking for a cash advance for trucking companies they own because it helps them streamline their day-to-day business operations, and owners who factor their invoices are able to operate at their most productive levels because they turn those unpaid invoices into immediate funding. Because efficiency is the key to profitability, both small and large trucking companies are turning to freight factoring in order to secure fast and reliable funding.
This is what makes invoice factoring, also known as freight factoring, the ideal solution for many freight carriers and transportation businesses. Factoring is not alone; instead, it is the selling of accounts receivable at a discount in exchange for immediate funds.
Trucking companies have limited funding options available to help them grow. The commercial banking system is so risk-averse, many banks will not lend you money until they are satisfied that your business is not in danger of becoming a credit risk and can sustain operations. Banks consider trucking business to be high risk, and so without a strong credit history or solid collateral to offset the bank’s concerns, most start-up companies as well as small and midsize carriers do not meet the qualification demands set by banks in order to secure business loans.
Financing Tailored to your Trucking Business
Invoice factoring is a funding option granted by invoice factors that specialize in the transportation and trucking industries. A reputable industry specific factoring company, such as Accutrac Capital, is able to help you meet the fiscal challenges you face every day because they understand how your business works and they know the daily operational challenges you face as a trucking company owner. At Accutrac, the factoring process is simple:
- Your trucking company delivers its freight to one of your customers
- You send an invoice to that customer and a copy of the invoice to your factoring company as well as all supporting documentation
- A cash advance of up to 97% (minus a small factoring fee) is sent directly to you within 24 hours
- When your customer pays the full amount owing on the invoice, the factoring company reimburses you the remaining 3% balance owing
When looking for a factoring company to partner with, make sure you find somebody you can trust to meet your needs and respond in a helpful, proactive manner should special circumstances arise. Choose a factoring company that understands the trucking industry and delivers on its promises with a sense of urgency — this will keep your fleet moving even during the most financially demanding situations.