How You can Get a Quick Loan of $50,000 -
Our Factoring Companies Used By Trucking Companies
Your Freight Company
The Cash Your Company Needs
Truck Factoring is helpful for several factors. It allows a truck company to raise cash without getting brand-new financial obligation. While financial obligation is sometimes needed, most freight brokerage would choose to raise cash without borrowing money. Debt is risky, and when it cannot be paid back, assets can be repossessed. If the debt is large enough, it could even force a truck companies out of business.
You Can Laugh at Money Worries - if You Follow This Simple Plan - Select
A Factoring Company Instead Of A Regular Bank Funding
How to Increase Money Flow Without Borrowing -Cash Money flow is one of the primary reasons businesses fail.
At one time or another, every business, even successful ones, have experienced bad money flow.
Money flow does not have to be an issue any ever more. Do not be fooled -- banks are not the only places you can get financing. Other solutions are available and you do not have to borrow money. Exactly what is truck factoring ? One option is called factoring companies used by trucking companies. Trucking Factoring is the procedure of selling invoices to an investor rather than waiting to collect the money from the
customer. Oh, the Irony- Trucking factoring has an ironic difference:
It is the monetary
foundation of numerous of America's most effective companies. Why is this paradoxical ? Since receivable loan funding is not taught in business colleges, is seldom discussed in company plans and is fairly unidentified to bulk of most of American company people.
Yet it is a financial process that releases up billions of dollars every year, enabling thousands of companies to grow and succeed. Factoring has been around for countless years. FACTORING Companies are investors who pay money for the right to get the future payments on your invoices. An unpaid 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 big portion of the retail company utilizes a factoring principal. MasterCard, Visa, and American Express all use a type of factoring in their retail transactions. Utilizing the purest definition of the word, these big consumer finance business are really simply big Truck Factoring Businesses of customer paper. Think about it: You purchase at Sears and charge
it to your MasterCard. The store makes money practically instantly, even though you do not make payment up until you are ready.
For this service, the credit card business charges Sears a charge (typical common normal charges range from two to four percent of the sale). The Advantages Commercial Factoring can provide many advantages to cash-hungry business. Instead of waiting 30, 60, 90 days or longer for payment on an item that has actually currently been provided, a company can factor
(sell) its receivables for cash at a little discount
off the amount of
the invoice. Payroll, marketing efforts, and working capital are just a few of the business needs that can be satisfied with instant money.
Factoring Companies Used By Trucking Companies offers the ways for a producer to renew inventory and make even more items to offer: There is no longer a need to await for earlier sales to be paid. Receivable Loan Financing is not simply a cash management tool for manufacturers: Almost any kind company can benefit from Trucking Factoring. Typically, a company that extends credit
will have 10 to 20 percent
of its annual sales bound in invoices at any given time. Think for a minute about exactly how much is bound 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 offer that invoice for the money to meet those obligations. Using trucking factoring companies is a quick and simple process. The factor buys the invoice at a price cut, usually a couple of portion
points less than the stated value of the invoice.
Please call our freight bill factoring specialists at 1 - 888-239-9162
or E-mail Us
The American Trucking Organization
states that there are about
205,000 work with freight trucking
300,000 private service providers trucking
firms accredited to
run in America that transferred,
according to their newest data of millions
products, materials and
basic materials .
There are numerous typical
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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.
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.
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Since the mid 1980s Perez Truck & Haul have been successfully running their freight business. They've delivered goods for nearly every major industry in the nation and for 20 plus years, business was booming as they've traversed the country in all weather for all clients. During the boom times from 2002 to 2007 Perez 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. 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 Perez 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, Patrick Grant, CEO of Perez felt a chill go down his spine whenever he would look at the weekly A/R reports. There was a growing list of clients who now owed them back debt.He had gone to his administrators and asked them what the problem had been. Were they doing something wrong or different when it came to reaching out to delinquent 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 Perez money had jumped ship and decided to leave him holding the bag.
. They couldn't afford to pay him their debt, but they could afford a lesser service, maybe. 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. The had just gone!.To Patrick Grant the situation looked desperate. Patrick was very concerned, because there were constant overheads, goods to ship, employees to pay, and trucks which needed to be maintained, but there just wasn't the money coming back into the business. In the evenings he would discuss his concerns with his wife, Carolyn, and still find no relief from the worry and frustration.
""Lin, I have a really bad feeling,"" he would say with deep woe.""What could you do differently?"" she would say.Patrick 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,"" Patrick said. ""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.
""Patrick knew his wife meant well, but he knew that he was responsible for too many people to sit idly by, waiting for the sun to peak over the clouds.The following day Patrick walked into his office with a spring in his step, determined to call each and every client who owed money to Perez Truck & Haul. This wasn't really a very efficient way for a Chief Executive to spend his day, and Patrick 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 Patrick 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 Carolineerley knocked at his door.
""Patrick, can I have a word?"" she asked standing in the doorway.
""Of course Caroline, please come in."" Patrick relaxed back into his chair and looked up at Carolineerley.""Well, I did a little searching this afternoon and tried to figure out a way out of this mess Patrick."" 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?"" Carolineerley asked.""It does sound vaguely familiar. What is factoring""? he asked.""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.""""Immediately?"" Patrick interrupted.""Immediately, yes"" she added, ""In a nutshell, it's pretty easy. We start by having a professional account manager review our figures and help us set up a company profile. That profile will also include investigating our accounts receivable aging reports, our existing customer credit limits and so on. Additionally, the factoring will help to determine the creditworthiness of our customers independent of their credit history with our business. It�s a broad view.��I see,� Patrick said. �And then what?��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. There�s a lot of flexibility depending on the business volume and credit histories. The company will advise us the cost to purchase factoring for our company's accounts receivable. We come to an agreement and the funding starts pouring out.�Patrick was still a little concerned. He leaned forward in his chair and studied the paperwork very closely.""It sounds too good to be true, Caroline,"" he said.""Now, now, I know, I thought the same thing. But really, they have guaranteed us experts that do all the legwork, which would free us up here to focus on our clients in good standing and marketing, all that good stuff. And they're flexible Patrick,"" she drew a circle around a paragraph on the document 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. It only takes 2 to 4 days for this to be figured out. """"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 Patrick.Patrick took in a long slow breath, then looked at his secretary with something like hope in his eyes.""Exactly�. This could very well be the answer to resolving the problems we're having with these clients who still owe us money.""Patrick took a moment to think about this solution, and agreed with his secretary. The clients who owed them money were long standing friends and professional resources of Perez. Patrick wasn't prepared to lose these relationships just because they were having financial issues at the moment. 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. Of course he didn't want to lose any more money, but he didn't want to lose business either.""Well, let me think about this tonight Caroline, thank you."" Caroline stood up and left Patrick's office, with the nice feeling of knowing that she may just have solved a very serious problem.Patrick sat behind his desk and looked over the details Caroline had not mentioned in their meeting. He wondered if there might be other problems freight factoring could help Perez Truck & Haul with? Running his pencil down the sheet, he noted that the freight factoring company could assist with fuel costs, fuel advances, and fuel discount cards. In fact, Perez 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 Rafael the good news,"" muttered Patrick to himself.Rafael is Patrick's son-in-law, and he really admired the ideas behind Perez, so much so that only two years before he had started his own transportation service business. Patrick knew then what struggles Rafael would face but he encouraged him nonetheless. With the faltering economy, if a big fish like Perez was hurting, a little guy like Rafael was about to catch his death. Perhaps the antidote to these problems was in freight factoring, and they were about to find out.Some months later, having successfully gone through the entire process of the application, having experts study his credit history and statements and review his accounts receivable, Patrick found that he was starting his journey out of the despair which had been created for him by his delinquent account holders.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. Patrick recalled those dismal months when he wasn't aware of freight factoring, and he shuddered at those memories. He probably wouldn't be in business today had he not learned just in time about freight factoring.
More Trucking Factoring Companies Story Articles
Factoring in the Future of a Trucking Business: A Story Ralph Cooper 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. Cooper 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.
Ralph�s father had started as an owner-operator and had grown Cooper 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 Ralph�s mother strapped herself into a cab to make hauls. His father had lived long enough to witness the price of hires drop during the recession and watch the eruption of fuel prices afterwards. But now things were different: the company was in Ralph's hands and he needed to ensure that this business would be left in great shape for his sons.
There just never seemed to be enough money to go around, and certainly no spare cash, but to move his company successfully into the future he needed a steady and reliable cash flow. 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. Every time he had to turn down a request, Cooper Trucking looked weak in a very strong market.
He knew what his father would have said - 'wait, take your time before adding new technology'. Ralph allowed himself a good hard chuckle. He remembered when his father was totally against installing 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.
Ralph believed a successful man is always thinking of his next step. How would he take Cooper Trucking to the next level? And how would he be able to afford it? Business funding was tied up in fuel bills and the mortgage for the garage and office. Thankfully he'd just finished paying off the bank loan for the installation of satellite radio in the trucks.
He wondered about factoring - was this the answer for him? If he was being honest, he didn't really understand how it all worked. It sounded like a ninth grade math problem and he wondered how this would fit into 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 can't pay its employees and bills with invoices.
Now it was time for Ralph to do his homework. He had heard of companies charging for same day money transfers, advancing a percentage of the money owed to your business, while the rest is held in a private account if the bill wasn't paid within sixty or more days. Worse still, if the customer defaulted on payment, the factoring company takes it out of the money supposedly 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 friend Ronnie who had a trucking business in Missouri, was run nearly into the ground by a factoring company that charged him the full freight bill on top of the factoring fees. Well, what was the point of going to a factoring company if there was shady business like that going on?
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. Customer service appeared to understand their company and explained in clear, concise English exactly how it all worked. 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. Nobody charged him for credit checks and they offered him a fuel advance on the pick-up of the 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 was good money.
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 didn�t worry over his credit and the debt troubles his father had had in the past of the company. All the factoring company was interest in was the credit of his customers and on their reliability: this worked great for Ralph 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 Cooper 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.
Feeling happier now, Ralph stepped out of his office to advise his secretary to expect to receive the contract very shortly from the factoring company. 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. He suddenly realized that, with this new cash flow, he could actually expand Cooper Trucking Company and who knows, move into Canada, which had always been his dream. 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?� asked Ryan Wilson, reclining back into his chair and crossing his legs. The woman sitting across the desk from Ryan smiled at him, shaking her head.�No, not exactly,� she said.Ryan was the owner of a small trucking company which had fallen on some hard times recently. Certainly the trucking business can be an extremely profitable venture, and for many years it had been that way for Benjamin. He named his business Edwards Trucking, named after Jaime and Harold, his two grandfathers. Both of these men had been very hardworking and had set a great example for Benjamin.Disaster had struck half a year ago, when two trucks in Benjamin�s fifteen truck fleet went down. One was a roll-over and ended up in the trucking graveyard: the other was involved in a serious and costly accident. Ryan 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 Ryan had on hand.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. In the long run, this wasn�t an issue, but if problems arose, you could find yourself in trouble.Ryan was an excellent business man, and he certainly hadn't done anything wrong. Things had happened that he couldn't have predicted, and he had to figure out a way to keep his business from hurting, or even going under.And that's why he found himself across the desk from this woman. Her name was Dolores and she worked for a factoring company. Ryan 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.She sat there now, and explained. �it is really not a loan at all: we actually buy your accounts receivable. We aren�t giving you money to be paid back later, we�re buying something from you, and you can buy it back when you can. This is a win-win situation: we're protected from a total loss, and you're protected from the ridiculous fees and charges you'd have to pay if you borrowed from a bank.Ryan agreed. It sounded perfect - perhaps too good?.The woman laughed. �You look like you don�t believe me,� she chuckled.�No, I do, I just think it sounds a bit too good to be true. I thought I was going to lose my company.�Dolores smiled, agreeing. �We get that a lot. There's no way we want to see you lose your business. You work hard, you�ve put everything you can into it. Sometimes you need help. That's why we do what we do.��In any case, thank you for coming to see me.��No problem - I'm just down the road. We normally do it all online but I was happy to come and visit you today,� Dolores said with a smile. �Let�s see what we can do to help you.�And with that they set about making a profile.
Ryan filled the form out, with Dolores available to help him if he needed it. The profile filled Dolores and her company in on Benjamin�s company, and would help them determine if he was suitable for factoring. Unfortunately, not all companies are. Some were beyond factoring special brand of help, and sometimes things weren�t even dire enough for it. As Ryan completed his form, Dolores listened to his story and she felt quite sure he would be the ideal candidate for Factoring.Dolores took the completed form and placed it in her briefcase. Standing up, she reached over the desk and shook Benjamin's hand. He also stood up, and they smiled at each other. Ryan walked Dolores to the door where they said 'Goodbye', then he went back into 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 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. Talking to Dolores though, learning about factoring, it felt like a weight had been lifted from his shoulders. He relaxed into his chair, running his hand through his thick black hair with its telling streaks of grey.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 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.Ryan 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. Offering home cooking in his own hometown, his business had really prospered.But he had gotten bored. His passion didn�t lie with 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 Edwards Trucking. And that's exactly what he did. Once again he built a company from the ground up. He had been successful.Then disaster! The two trucks went down and suddenly his success wasn't looking so guaranteed. He was nearing fifty. He didn�t think he had it in him, to save this company. But giving up wasn't part of his personality either.
The idea of cutting his losses, shutting down, laying off his workers, it actually made him sick some nights. He didn�t know how to say quit.And now, because of factoring, he was sure he wouldn�t have to. Benjamin's eyes opened, he sat forward in his chair and turned on his computer. He had things to do. He could be thankful later, for now, it was time to work.
More Trucking Factoring Company Story Articles
Why Truck Companies Make use of Factoring Companies.
As the owner of your own business enterprise, you may be much more than knowledgeable already of the challenge in making sure that capital concerns do not become a predicament down the line. After all, the most disappointing thing that can possibly come about for your company is to find yourself swept up in a long and perplexing circumstance that leaves you forever searching for the resources you need on an continual manner.
For any firm in this instance, the problem can come for waiting for work to clear up and actually be compensated into your balance. Statements, checks, and the like could take some time to actually to be taken care of which may leave you with momentary cash flow issues. Thank goodness, there are solutions out there for industries to explore-- and just one of these is factoring agencies.
Factoring agencies will, in trade for your bill of sales, give you with the finances now so that you don't have to worry about the waiting time span that could make paying off the expenses and getting toolsmore troublesome. With this type of system, invoice factoring can become tremendously valuable for numerous firms who need to avoid a money pitfall which they have gotten themselves in.
For the reason that, depending on the size of the job, it can take up to 60 days for several enterprises to get compensated then it's crucial to take care of your own back and definitely not leave yourself money short to settle the costs. After all, how many firms have two months revenue just lying there to cover all their expenditures until they get paid?
This is primarily true of trucking agencies. They often tend to take care of good deals of statements which means a significant amount of collection time involves business owner themselves. Seeking to get paid promptly can become an extraordinary struggle and this is the key reasons why you use truck factoring agencies who are delighted to help out truckers specifically.
As we all realize, trucking is an extremely massive market with a lot of firms out there working with hundreds of vehicle drivers. The sad thing is, many of these drivers wind up in finances predicaments considering that they are still waiting for work from six weeks ago to actually pay them. When this is the circumstance for a truck agency, choosing factoring firms for support could be the finest choice left.
This implies that a truck firm can compensate the wages of the work force, keep all the vehicles loaded with fuel and continue to scale, develop and expand without continually waiting for the money which is taking too prolonged to come in. Trucking Businesses operating without a factoring program established are leaving themselves at significant danger, as contenders cash out quickly and carry on to develop.
There's absolutely almost nothing to be stressed about when it comes to working with a Factoring contractor-- they aren't like a financial institution or someone who is going to leave you with a significant stockpile of debt to repay. You give them authentic invoices from output you have already finished , you are merely expediting the repayment process.
In the Usa, where truck companies grow, factoring agencies are not considered getting a loan in any capacity. This private contract then enables both groups to benefit and enjoy a convenient future-- it gives the factoring company a guaranteed resource of money to add to the list and it gives the trucking business the required money that they sweated to obtain.
The trucking firm bestows their invoices to the factoring business. The trucking factoring business then acquire the installment payments from the trucking company's clients. Factoring has beenaround for centuries and has been adopted for several years by plenty of varying markets-- but none much more so than truckers. While you could lose out on a small part of the money, something like 1-3 % depending upon who you deal with, it means that you are acquiring the cash today and can actually start setting the funds to perform.
Anyway, an IOU or an invoice is absolutely not going to fund costs, is it? For trucking agencies when the funds can be very good one day and gone the next, it's up to the drivers to work prudently and to guarantee they are leaving themselves with a notable amount of time and money to get through the week till they are compensated once more.
So the next time your trucking company is enduring some temporary capital concerns and you are investing a lot of time chasing sluggish paying clienteles, why not start off looking into making use of a factoring businesses as a method to get your money and give yourself a more comfortable future in the eyes of your trucking crew and your bank balance?
Traditional Bank Loans
Finance through a bank loan is the normal, or traditional, way of financing your business. While these loans are handy they are not 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. 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.
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. Rather the financing you receive from a Trucking Factoring company is based on money your business has already earned, but have 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 finance you can receive will be based on the amount you have earned and the accounts receivable you are prepared 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.
What Are The Benefits Of A Trucking Factoring Company Versus A Traditional 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. 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. 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'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. Receive Your Money Faster. With a Trucking Factoring company you can actually get the money you need faster. The money will normally be in your account within 24 hours, once the Trucking Factoring company is confident that your customers� accounts are likely to be paid. 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.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 good at collecting these debts, saving you the time and effort that you need to devote to your growing company.
In addition, since the Trucking Factoring company evaluates the credit quality of your customers prior to purchasing the accounts receivable you gain valuable information into which customers are likely to pay and which ones are not so 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.