Truck Factoring is beneficial for several reasons. It allows a trucking business to raise money without obtaining new financial obligation. While financial obligation is in some cases essential, most truck businesses would like to raise cash without borrowing money. Financial obligation is dangerous, and when it can not be paid back, assets can be repossessed. If the debt is huge enough, it might even require a freight broker firm out of business.
The Secret to Being Wealthy - Pick
A Freight�Factoring Company Instead Of A Typical Bank Funding
How to Enhance Money Flow Without Loaning -Cash Money flow is among the primary reasons businesses fail.
At one time or another, every business, even successful ones, have experienced poor cash flow.
Cash flow does not have to be an issue any more. Do not be deceived -- banks are not the only places you can get funding. Other solutions are offered and you do not have to borrow money. Exactly what is trucking factoring ? One solution is called top invoice factoring companies. Trucking Factoring is the procedure of selling accounts receivable to an investor rather than waiting to collect the money from the
customer. Oh, the Irony- Trucking factoring has a paradoxical distinction:
It is the monetary
foundation of numerous of America's most effective companies. Why is this paradoxical ? Because invoice factoring is not instructed in business colleges, is rarely discussed in business strategies and is relatively unidentified to the majority of most of American company people.
Yet it is a monetary process that releases up billions of dollars every year, allowing thousands of businesses to grow and succeed. Receivable Loan Financing has been around for thousands of years. 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
offers exclusively with business-to-business deals, a large percentage of the retail business utilizes a factoring principal. MasterCard, Visa, and American Express all utilize a type of factoring in their retail transactions. Using the purest meaning of the word, these large customer finance companies are truly just large Receivable Funding Companies of consumer paper. Consider it: You make a purchase at Sears and charge
it to your MasterCard. The shop gets paid practically instantly, even though you do not make payment up until you are ready.
For this service, the credit card business charges Sears a fee (typical common normal fees vary from two to 4 percent of the sale). The Advantages Staffing Factoring can provide numerous benefits to cash-hungry business. Instead of waiting 30, 60, 90 days or longer for payment on a product that has actually currently been provided, a company can factor
(sell) its receivables for cash at a small 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.
Top Invoice Factoring Companies offers the ways for a producer to replenish inventory and make even more products to sell: There is no longer a need to wait for earlier sales to be paid. FACTORING is not simply a cash management device for producers: Almost any type company can take advantage of Truck Factoring. Typically, a company that extends credit
will have 10 to 20 percent
of its annual sales bound in accounts receivable at any given time. Think for a moment about exactly how much is bound in 60 days' worth of invoices: You can not pay the power bill or this week s payroll with a customer s invoice, however you can offer that invoice for the cash to meet those responsibilities. Using trucking factoring companies is a fast and simple process. The factoring company purchases the invoice at a price cut, usually a few portion
points less than the stated value of the invoice.
Please call our truck factoring specialists at 1 - 888-239-9162
or E-mail Us
The American Truck Organization
specifies that there are about
195,000 work with freight trucking
276,000 personal providers trucking
companies licensed to
run in America that transferred,
according to their most current listings of millions of
items, supplies and
fundamental products .
There are numerous typical
teams on our nation
highways carrying these
vital items to our
shops, manufacturing facilities and harbors.
countless of them and offer their
accounts receivablesfinancing facilities
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.
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.
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.
List of Trucking Companies for Owner/Operators and Company Drivers
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
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.
Grant Truck and Haul has been in business since the mid 1980s. 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 boom times from 2002 to 2007 Grant 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. 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 Grant 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, Tom Banks, CEO of Grant felt a chill go down his spine whenever he would look at the weekly A/R 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. 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 Grant 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. So he did the necessary research and, after discussions with friends in the same field, he realised that no, his customers hadn't gone anywhere else. They had just gone home.The situation looked dire to Tom Banks. He had employees to pay, goods to ship, trucks to maintain and overhead that was almost unbearable when compared against the lack of funds that were coming in. After work he would confide in his wife, Michele, and neither were unable to stop the constant worry over the lack of funds.""Lin, I have a really bad feeling,"" he would say with deep woe.""What could you do differently?"" she would ask.Tom would stare off for a moment and then close 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 on earth was happening to create the death of his business?""I think I know what it could be,"" said Tom. ""For way too long I've been relying solely on profits received from invoices. 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.
""Michele was trying so hard to support her husband in these worrying times, while Tom was weighed down with the worry of how he was going to handle this situation he found himself in.The next day Tom strolled into his office and was determined to sit down and make every phone call to every client who had owed Grant money. This wasn't really a very efficient way for a Chief Executive to spend his day, and Tom 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 Tom was realising just how much trouble he was in.After a half day of contacting debtors in vain - they dodged his calls or promised to call back at worst or made minimal interest-only payments at best - he was about to throw in the towel when his secretary Feliciaerley knocked at his door.
""Tom, can I have a word?"" she asked standing in the doorway.
""Of course Felicia, please come in."" Tom relaxed back into his chair and looked up at Feliciaerley.""Well, I did a little searching this afternoon and tried to figure out a way out of this mess Tom."" She opened up a folder she had been carrying and pulled out a small wad of papers, placing them on the desk in front of him.""Have you ever heard the word factoring?"" she asked.""It does sound vaguely familiar. What is factoring""? he asked.She began, ""Well, it's really very simple. Basically, factoring invoices means that we would get paid immediately for the loads we haul.""Tom interrupted ""Immediately?"".""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�s a broad view.��Tom 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.
The company will advise us the cost to purchase factoring for our company's accounts receivable. The funding commences once we�ve arrived at an agreement.�Leaning forward, Tom studied the documents very closely.""It sounds too good to be true, Felicia,"" he said.""Yes, I know; that's exactly what I thought at the beginning. But think about it, Tom: 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. And they're flexible Tom,"" she underlined a paragraph on the paper before him.""Just 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're all tapped out now with loans from the bank last year to repair vehicles, and we all know just how tight money is. 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 Tom.Tom took in a long slow breath, then looked at his secretary with something like hope in his eyes.""Precisely�. This could be the answer to our prayers: it will solve many problems we're facing due to these unpaid debts.""Tom took a moment to think about this solution, and agreed with his secretary. The customers who were in debt to Grant Truck & Haul were professional resources of the company, but they were also long-standing friends. They didn't want to throw away these relationships because they were having trouble paying their bills now. He was well aware that the economy was in a bad way and that it might be quite a while before things started picking up. That unknown amount of time, if he handled these debtors incorrectly, could spell disaster for both of them. He didn't want to lose business but he also didn't want to lose any more money.""Let me go over this tonight Felicia, and thankyou."" Felicia stood up and left Tom's office, with the nice feeling of knowing that she may just have solved a very serious problem.Tom 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 Grant 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, Grant could receive up to fifty-percent cash advances upon load pick-ups. Tom 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.""I must tell Jorge the good news,"" Tom muttered to himself.Tom's son-in-law, Jorge, loved the idea behind Grant 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 Tom knew the struggles Jorge would face, but he still encouraged him to follow his dream. With the economy the way it was, if an established company such as Grant was struggling then the little guys, like Jorge, were going to be in even more trouble. Perhaps the antidote to these problems was in freight factoring, and they were about to find out.A few short months later, after completing the application process, having the legal experts review his credit history, accounts receivable, and statements, finally Tom was beginning to find his way out of the hole his debtors had created for him.They took on reasonable factoring purchase contracts and stopped spending their precious man hours scrambling to collect debt. They took that time and refocused effort to offering competitive prices in new territories. Tom 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.
More Trucking Factoring Companies Story Articles
The Future of a Trucking Company, and Factoring The phone was ringing on his desk, and Brad Howell just sat there letting it ring. 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. Howell Trucking Company was at a turning point of growth and Brad had to decide if signing with a factoring company was the right way forward.
Brad�s father had started as an owner-operator and had grown Howell 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 Brad�s mother strapped herself into a cab 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. Now the company was solely in Brad�s hands and he wanted to live to see it in better shape for his sons.
To move Howell 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 had families and household bills too. 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. He knew that turning down these requests made Howell Trucking look inefficient and weak in what was currently a strong market.
His father would have told him to wait and to take his time adding on new technology. Brad chuckled, thinking about his father. 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). 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.
Brad knew he was right in his forward thinking. How would he take Howell 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? 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 this assistance, you're placed in the position of waiting for payment from your customers, and this can often be thirty days, or more. In those 30 days, a trucking company can�t pay its bills and employees in invoices.
Brad had to really consider what his next step was going to be. Brad 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. 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 wouldn't 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. Also he was happy to hear how much he was offered in terms of percentages on the freight bills. It sounded like a great scheme to him.
For Brad 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 Brad because he and his father had created a very strong and loyal list of clientele over the years. 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 Howell 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.
Brad stepped out of his office to let his secretary know to expect the arrival of the factoring contract shortly. 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. With the capabilities of this new cash flow, Brad could actually expand Howell Trucking Company further across the country and perhaps even go international into Canada. 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, this is not a loan?� Casey Gordon asked as he leaned back in his chair, crossing his legs. The woman who sat across the desk smiled and shook her head.�No, not exactly,� she stated.Casey Gordon 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 Micheal. He named his business Cruz Trucking, named after Ted and Jason, his two grandfathers. Both of these men had been very hardworking and had set a great example for Micheal.Disaster had struck half a year ago, when two trucks in Micheal�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. Casey depended on his full fleet, and missing two trucks was devastating . Furthermore, buying a whole new truck and fixing the other simply took more cash than Casey had on hand.Paying of bills in the trucking industry is always a major cause for concern for businesses.
Waiting a month or longer for bills to be paid was quite normal. This system works okay as long as no problems arise, but if they do, then things can get quite sticky.Casey 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.And that's why he found himself across the desk from this woman. Casey knew she was employed by a Factoring company and that her name was Toni. Casey 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.Toni explained. �It�s not a loan, we purchase your accounts receivable. We're not giving you finance to be repaid later: we're 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.Casey nodded. It sounded good to him, almost too good.Toni laughed. �I'm not sure that you believe me,� she said.�Oh no, I do: it just sounds too good to be true. I thought I was going to lose my company.�Toni smiled, agreeing. �Yes, we get a lot of that. 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,� Toni said with a smile. �Let's work out a solution to your problem.�And with that they set about making a profile.
Casey filled the form out, with Toni available to help him if he needed it. The profile filled Toni and her company in on Micheal�s company, and would help them determine if he was suitable for factoring. In truth, not all companies were. Some businesses are beyond the help of a Factoring company, while other businesses weren't in enough financial stress to warrant it. Listening as Casey filled out his form, Toni was pretty sure he was a perfect candidate for factoring.Toni took the completed form and placed it in her briefcase. She then stood, reached across the desk and shook Micheal�s hand. He also stood up, and they smiled at each other. They said their goodbyes and Casey 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 leaned back and closed his eyes. He had felt so helpless lately, was sure the whole thing was collapsing, and would take him with it. Talking to Toni though, learning about factoring, it felt like a weight had been lifted from 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 terrifying panic attacks that occurred regardless of 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. At twenty-two and straight out of school he had opened a restaurant. It had been 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 long and hard, and then he decided to sell the restaurant. He took half a year off, and in that time he thought to start Cruz 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.Then disaster! The two trucks went down and suddenly his success wasn't looking so guaranteed. He was about to turn fifty. He didn�t think he had it in him, to save this company. 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 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. Micheal's eyes opened, he sat forward in his chair and turned on his computer. 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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Why Truck Firms Work with Factoring Firms.
As the manager of your own business enterprise, you may be much more than perceptive already of the challenge in making certain that cash flow concerns do not become a dilemma down the line. After all, the most unfortunate thing that can in all probability take place for your establishment is to find yourself embroiled in a long and problematic situation that leaves you forever looking for the funds you necessitate on an on-going basis.
For any sort of business enterprise in this condition, the trouble can come for waiting for work to lapse and actually be paid into your bank account. Statements, checks, and the like could take a long time to actually to beprocessed which could leave you with temporary cash flow issues. Luckily, there are solutions out there for firms to look into-- and among these is factoring firms.
Factoring agencies will, in substitution for your bill of sales, provide you with the funds now so you don't need to stress over the lingering duration which could make paying the bills and obtaining materialsmore challenging. With this type of system, invoice factoring can become extremely helpful for countless establishments who need to avoid a money trap which they have found themselves in.
Since, relying on the volume of the job, it can take up to 60 days for several enterprises to get paid out then it's critical to cover your own back and not leave yourself funds short to pay off the monthly bills. After all, how many establishments have two months revenue just lying there to cover all their overheads till they make money?
This is especially correct of truck companies. They often manage lots of statements which means a notable amount of collection time concerns business owner themselves. Attempting to get paid promptly can end up being an unbelievable struggle and this is exactly why you use truck factoring firms who are glad to help out truckers exclusively.
As all of us understand, trucking is an surprisingly large business with plenty of firms out there handling hundreds of operators. Regrettably, several of these drivers land up in income predicaments considering that they are still waiting for work from six weeks back to actually pay them. When this is the case for a trucking business, choosing factoring companies for solutions may be the most ideal alternative left.
This signifies that a trucking firm can compensate the wages of the staff, keep all the cars refilled with fuel and continue to escalate, thrive and expand without consistently waiting for the finances which is taking too prolonged to come in. Trucking Businesses running without a factoring system used are leaving themselves at substantial threat, as competitions cash out rapidly and continue to broaden.
There's honestly nothing at all to be stressed about when it comes to employing a Factoring establishment-- they aren't like a bank or a person who is going to leave you with a huge mass of financial obligation to pay back. You give them legitimate invoices from work you have already accomplished , you are only just quickening the payment process.
In the United States, where trucking agencies grow, factoring companies are not considered getting a loan in any capacity. This private settlement then permits both groups to profit and enjoy a convenient future-- it gives the factoring company a warranted resource of earnings to add to the list and it supplies the trucking firm the required funds that they worked hard to generate.
The trucking establishment provides their accounts to the factoring agency. The trucking factoring business then acquire the payments from the trucking company's clients. Factoring has been all around for hundreds of years and has been used for long times by several diverse sectors-- but none more so than truckers. While you might miss out on a small part of the money, something like 1-3 % depending upon who you deal with, it indicates that you are getting the funds today and can actually begin putting the money to do work.
After all, an IOU or an invoice is not going to fund bills, is it? For trucking enterprises when the funds can be good one day and gone the next, it's up to the drivers to work smartly and to make sure they are leaving themselves with a notable measure of time and finance to get through the week till they are handed over once more.
So the next occasion your trucking company is enduring some short-term capital concerns and you are investing a bit too much time chasing slow paying clienteles, why not begin looking at employing a factoring businesses as a way to get your finances and give yourself a more worry-free future in the eyes of your trucking personnel and your bank balance?
Traditional Bank Loans
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. 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's 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. 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.
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. The finance you receive from the Trucking Factoring company is determined by money already earned by your business, but 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 money you can receive is based on the amount of money you have earned and the accounts receivable you are willing 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. 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. Should the unforeseeable happen and your business fails, you won't have to worry about anyone coming after your personal as well as your business assets 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 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. Using a Trucking Factoring company means that you'll get the finance quicker. 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. 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. 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 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. 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 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.