 When it comes to cash flow, you, as a trucking company owner, are very conscious that transportation companies re quite demanding. Regular cash is that they need. In this way they will be able to meet all the ongoing costs. Your company may be compared with a well-oiled machine. Only in this way your trucking company operates as long as cash is coming in at a nice rate. But when the hiccup in the cash flow is available, the well oiled machine starts squeaking. The gears start flying all over the place and the so-called well oiled machine comes to a grinding stop if there is a major cash flow problem.
It is interesting what is the biggest source of cash flow problems for small and mid sized trucking companies. Small trucking companies with few power units usually cannot afford the wait unlike large trucking companies which can certainly handle waiting. That's why, being an owner, you need the money and you need it now.
Is there any solution to turn away slow paying clients? It is impossible and it is considered to be business suicide. Eliminating the wait by financing your freight bills using freight bill factoring is the right solution.
The idea behind factoring is very simple. You are provided with cash for your freight bills by factoring companies. While the factoring company waits to get paid you get immediate funding. Factoring gives an opportunity to get immediate money for your slow paying freight bills, which allow you to pay drivers, maintain power units and buy fuel.
Factoring is very easy to qualify for and very common in the trucking industry. However, most trucking companies can easily qualify since the main requirement is that they do business with good paying clients. Thanks to it you may easily do business with clients that pay in 30 to 90 days and eliminate the stress of having to wait to get paid.
Freight factoring works simply:
1. The load and submit copies of the documents re delivered by you to the factoring company.
2. The factoring company advances you about 90% of the freight bill in 24 hours (the remaining 10% is used to cover billing disputes). You get money almost immediately.
3. The factoring company is paid by the client, and the remaining 10% is rebated to you.
The main task of the factoring is eliminating the wait to get paid and giving you the cash you need to run your trucking company.
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