 Such news is goods for trucking companies. At least, this is useful for those that can deal with the challenges of paying for repairs, fuel and meeting payroll on time. Besides, this can be challenging for a new and growing company, since most clients pay their freight bills in up to 60 days. Remember that waiting can kill the business.
No doubt, going to the bank for money won't help. Because the aims of banks are only to finance businesses which have good cash flow, lots of assets. They can provide three years worth of financial statements. In case you could meet those requirements, of course, you would not need business financing.
The better idea in this case is to factor your freight bills. Factoring has the ability to provide you with money to pay for repairs, fuel and drivers. Unlike bank financing, factoring is easy for qualifying 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. The fee will be charged and any reserves will be rebated when the freight bill is paid.
You do business with credit worthy clients that pay their invoices consistently. This is the main requirement of factoring. When the service is set up the financing is continuous.
Being an added service, factoring companies will also check the creditworthiness of your new prospects. In this way they authorize you to only do business with clients that will pay their invoices on time.
Freight bill factoring have been used by many trucking company owners to grow their transportation companies, enabling them to take on new loads, and add equipment while easily keeping up with costs. Driving your trucking company to financial success is the min goal of factoring. Be sure it will help you to o this.
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