The trucking industry is growing by leaps and bounds. It is a well-known fact that the industry will grow consistently for the next decade. Basically, trucking companies are delivering truck loads of freight every day and are growing quickly and profitably. They are an engine that is driving the economy. This is all good news for trucking companies, at least for those that can deal with the challenges of paying for repairs, fuel and meeting payroll on time. This can be challenging for a new and growing company, since most clients pay their freight bills in up to 60 days. Waiting can kill the business. Of course, going to the bank for money won't help. Banks only finance businesses that have good cash flow, lots of assets and can provide three years worth of financial statements. Of course, if you could meet those requirements you would not need business financing. A better option is to factor your freight bills. Factoring can provide you with money to pay for repairs, fuel and drivers. And as opposed to bank financing, factoring is easy to qualify for and simple to use. Here is a sample transaction: 1. You sell your freight bill to the factoring company 2. The factoring company advances you up to 95% of the bill (90% is more common. Sometimes a small reserve is held) 3. Once the freight bill is paid, the fee is charged and any reserves are rebated The main requirement of factoring is that you do business with credit worthy clients that pay their invoices consistently. The service can generally be set up in a few days, and once it's set up, the financing is continuous. As an added service, factoring companies will also check the creditworthiness of your new prospects, enabling you to only do business with clients that will pay their invoices on time. Many trucking company owners have used freight bill factoring to grow their transportation companies, enabling them to take on new loads, and add equipment while easily keeping up with expenses. Factoring can help you drive your trucking company to financial success. |
