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Medium-Size freight businesses, specifically those who have not been around for extremely long, will frequently find it challenging to secure a loan. Banks are often reluctant to provide money to companies that do not have a lot of income and assets. They likewise want evidence of the viability of a business and hence need that the majority of operations, especially little ones, been around for a certain amount of time before they are eager to hand over any cash. Because of this, a medium-size business typically has few money producing options when needs occur. One alternative available, however frequently overlooked, is factoring. This is an outstanding method for a small business to acquire cash.
How To Get More Profit From Your Receivables - Select
A Freight Bill�Factoring Company Instead Of A Traditional Bank Funding
Exactly how to Enhance Money Flow Without Loaning -Cash Money flow is one of the main reasons companies fail.
At one time or another, every company, even successful ones, have experienced poor money flow.
Cash flow does not have to be an issue any more. Do not be fooled -- banks are not the only locations you can get financing. Other options are available and you do not have to borrow money. Exactly what is truck factoring ? One option is called accounts receivable factoring companies. Trucking Factoring is the process of offering accounts receivable to a financier instead of waiting to gather the cash from the
client. Oh, the Irony- Trucking factoring has an ironic distinction:
It is the monetary
foundation of numerous of America's most effective companies. Why is this paradoxical ? Since accounts receivable factoring is not taught in business colleges, is rarely discussed in business strategies and is fairly unknown to bulk of most of American business individuals.
Yet it is a financial process that releases up billions of dollars every year, allowing countless companies to grow and succeed. Receivable Financing has actually been around for countless years. Receivable Financing Companies are investors who pay cash 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 agreed pay in the near future. Factoring Principals--Although factoring
offers exclusively with business-to-business transactions, a large portion of the retail company utilizes a factoring principal. MasterCard, Visa, and American Express all utilize a type of factoring in their retail deals. Utilizing the purest meaning of the word, these big customer finance business are really just big Staffing Factoring Businesses of consumer paper. Think about it: You purchase at Sears and charge
it to your MasterCard. The store gets paid almost instantly, even though you do not pay until you are prepared.
For this service, the credit card company charges Sears a fee (typical common normal fees vary from two to four percent of the sale). The Benefits Staffing Factoring can offer numerous advantages to cash-hungry companies. Instead of waiting 30, 60, 90 days or longer for payment on an item that has actually already been provided, a business can factor
(sell) its receivables for cash at a little discount
off the dollar value of
the invoice. Payroll, advertising efforts, and working capital are just a few of the company requirements that can be met with instant money.
Accounts Receivable Factoring Companies provides the ways for a manufacturer to renew inventory and make even more products to sell: There is no longer a requirement to wait for earlier sales to be paid. FACTORING is not simply a money management tool for producers: Almost any kind company can benefit from Invoice Factoring. Generally, a company that extends credit
will have 10 to 20 percent
of its yearly sales tied up 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 bill or today s payroll with a client s invoice, but you can sell that invoice for the money to satisfy those obligations. Using trucking factoring companies is a quick and simple process. The factor buys the invoice at a discount, usually a few percentage
points less than the face value of the invoice.
Please call our truck factoring specialists at 1 - 888-239-9162
or E-mail Us
The United states Transportation Association
mentions that there around
195,000 work with truck
250,000 personal service providers trucking
companies licensed to
run in the States that transported,
according to their latest data of millions
items, materials and
basic materials .
There are a number of typical
groups on our nation
roads transporting these
important items to our
shops, manufacturingplants and harbors.
many of them and offer their
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
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.
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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.
EveryTruckJob.com is a free service dedicated to helping professional truck drivers find new truck driving jobs with the best trucking companies hiring today!
Locate truck driving jobs by city, state, position andbenefits offered. Search current driving jobs and fill out the EZ truck driver application customized for cdl trucking jobs
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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.
Since the mid 1980s Stone 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 heady times from 2002 to 2007, Stone was a top rated accounts receivable mastermind of 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.It was just one year later, in 2008, when the economy in the United States took a sharp decline, and both large and small businesses started to notice the squeeze on their pocketbooks: everyone had suddenly gone silent. Business slowed down. And worse yet, Stone had noticed during the early part of 2008 that though the bulk of their clients were always on time with payments, the few late-bloomers there were, had seemingly started to spread this illness. Spring changed to summer, summer changed to fall, and the CEO of Stone, Ronnie Harvey, was beginning to feel very uncomfortable indeed whenever he looked at their weekly Accounts Receivable 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 Stone 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. But after doing the cursory research for this and talking to friends in the field, he found that alas, no, customers of Stone hadn't gone elsewhere. They had just gone home.The situation looked dire to Ronnie Harvey. There were goods to ship, employees to pay, trucks to repair and maintain, and continuous overheads that were very extensive when compared to the funds (or lack of) that were incoming. At night he would speak to his wife Veronica and shake his head in frustration.
""I have a bad feeling, Lin,"" he'd sadly say to his wife.""Well, what do you think it is?"" she would say.Ronnie would stare off for a moment and then close eyes. He could see the fleet of trucks he had purchased over the years. He could see them on the road, delivering good to all his loyal customers. But then a haze would cover his trucks and his vast fleet would vanish to leave just a few. What could cause this ultimate death spiral of business?""I know what it is,"" Ronnie said. ""For way too long I've been relying solely on profits received from invoices. I've let too many of our customers go too long without paying on their bills."" All Veronica could do was hold his hand and look at him tenderly. 'We know it's a difficult economy at the moment - perhaps it will take a while for people to get on top of their bills'.""Veronica was trying so hard to support her husband in these worrying times, while Ronnie was weighed down with the worry of how he was going to handle this situation he found himself in.The following day Ronnie walked into his office with a spring in his step, determined to call each and every client who owed money to Stone Truck & Haul. This wasn't really a very efficient way for a Chief Executive to spend his day, and Ronnie 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 Ronnie 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 Christineerley knocked at his door.
""Ronnie, can I have a word?"" she queried, standing in the doorway.
""Sure thing Christine, come on in."" Ronnie leaned back in his chair and looked expectantly at Christineerely.""Well Ronnie, this afternoon I did some research, trying to work out how we're going to get out of this mess."" She pulled a small stack of papers from a folder and set them on the desk before him.""Have you ever heard of factoring?"" Christineerley 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?"" Ronnie interrupted.""Yes, immediately,"" she continued, ""It's actually very simple. 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.. Additionally, the factoring will help to determine the creditworthiness of our customers independent of their credit history with our business. It provides a very broad view.��I see,� Ronnie 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.�Ronnie was still a little concerned. He leaned forward in his chair and studied the paperwork very closely.""It sounds too good to be true, Christine,"" 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 Ronnie,"" she drew a circle around a paragraph on the document before him.""How flexible?"" asked Ronnie.""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. """"That sounds pretty good, seeing as we tapped ourselves out with bank loans last year to repair the fleet and money sure is tight. 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 Ronnie.He took a deep breath and looked at his secretary with something she recognized as hope.""Precisely�. I think this might just be a way out of the trouble we're in with these folks who owe us money.""Ronnie took a moment to think about this solution, and agreed with his secretary. The customers who were in debt to Stone 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. Ronnie knew that the economy had taken a hit and he knew that it would probably be a long time before things started to look up again. If he didn't handle these debtors in the right way, that unknown amount of time could spell disaster for all of them. Of course he didn't want to lose any more money, but he didn't want to lose business either.""Let me go over this tonight Christine, and thankyou."" Christine nodded, stood up and left the office feeling that she had helped her employer keep on his shirt and hers too.Ronnie sat behind his desk and looked over the details Christine had not mentioned in their meeting. What other issues could freight factoring help Stone 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, Stone could receive up to fifty-percent cash advances upon load pick-ups. Ronnie 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.""Well, I'll have to tell Roland about this,"" muttered Ronnie to himself.His son-in-law Roland had liked the idea of Stone so much and revered his father in law for having such business acumen that only two years before, he had gathered the venture capital to begin his own transportation service company. At that time Ronnie knew the struggles Roland would face, but he still encouraged him to follow his dream. With the faltering economy, if a big fish like Stone was hurting, a little guy like Roland 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, Ronnie found that he was starting his journey out of the despair which had been created for him by his delinquent account holders.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. Ronnie 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
Factoring in the Future of a Trucking Business: A Story Antonio Hayes 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. Hayes 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.
More than forty years ago Antonio's father had started this business working as an owner-operator and eventually growing Hayes Trucking Company into a fifteen trailer fleet. Yes, they had survived some very difficult times when it appeared like they might go under, and even Antonio's mother had jumped into the cab at times 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 Antonio�s hands and he wanted to live to see it in better shape for his sons.
To move Hayes 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 Hayes 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. Antonio chuckled, thinking about his father. 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.
Antonio believed a successful man is always thinking of his next step. How would he take Hayes 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? There was a lot he didn�t understand about the process. It sounded a lot like ninth grade algebra which just didn�t feel like it belonged as part of 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 the assistance of factoring, you have to wait for customers to send you the payment which is often 30 days late. In those 30 days, a trucking company can�t pay its bills and employees in invoices.
Now it was time for Antonio to do his homework. Antonio 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. Worse still, if the customer defaulted on payment, the factoring company takes it out of the money supposedly coming to you! Through the grapevine, he�d also heard about how some companies suddenly slipped you onto a sliding scale of percentages even if you had already signed a lengthy contract for maybe 3% or 7% so there you are with 10% coming as a cost 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. 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.
It was really refreshing dealing with the factoring people. They were more personable than those loan managers at the bank. 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 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 Antonio because he and his father had created a very strong and loyal list of clientele over the years. So he knew they would understand when the factoring company contacted them for the invoices. His clients wouldn't have any problems, nor would they think poorly of Hayes Trucking, because the factoring companies handle themselves in such a polite and professional manner, similar to the way his father had managed the business in the past.
Feeling happier now, Antonio stepped out of his office to advise his secretary to expect to receive the contract very shortly from the factoring company. He felt exhilarated by the new possibilities that would make the future of the company fun again and put the stress of the difficult times behind him. He suddenly realized that, with this new cash flow, he could actually expand Hayes 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 It is not a loan?� asked Robert Gray, reclining back into his chair and crossing his legs. The woman who sat across the desk smiled and shook her head.�Not quite,� she stated.Robert 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 Paul. He named his business Gregory Trucking, named after Alfredo and Joe, his two grandfathers. Both of these men had been very hardworking and had set a great example for Paul.Six months ago disaster struck Paul's business when two out of his fleet of fifteen trucks were taken off the road.
One was a roll-over and ended up in the trucking graveyard: the other was involved in a serious and costly accident. Robert 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 Robert 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. In the long run, this wasn�t an issue, but if problems arose, you could find yourself in trouble.Robert wasn�t a bad owner, and he hadn�t messed up. 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.That�s where the woman across the desk came in. Her name was Stacey and she worked for a factoring company. He had accidentally come across her company one night when he was working late, searching the internet to see if there was some solution to his financial dilemma.Stacey explained. �It�s not a loan, we purchase 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.Robert nodded. It sounded good to him, almost too good.Stacey 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 actually thought I might end up losing my business.�Stacey smiled, agreeing. �Yes, we get a lot of that. Listen, I�d hate to see you lose your company. We know how hard you work, and that you've invested everything in your business. We all need help sometimes. That's why we do what we do.��In any case, thank you for coming to see me.��It�s right down the road, usually we do it all online, but I didn�t mind swinging on by today,� said Stacey with a smile. �Let's work out a solution to your problem.�And right there and then they created a business profile. Robert filled the form out, with Stacey available to help him if he needed it. The profile filled Stacey and her company in on Paul�s company, and would help them determine if he was suitable for factoring. Unfortunately, not all companies are. Some businesses are beyond the help of a Factoring company, while other businesses weren't in enough financial stress to warrant it. Listening as Robert filled out his form, Stacey was pretty sure he was a perfect candidate for factoring.When the form was done Stacey took it and slid it into her briefcase. Standing up, she reached over the desk and shook Paul's hand. He stood before they shook as well, and then smiled. They said their goodbyes and Robert walked her to the door, and then returned to his office.All his staff members were there, all seven who worked in his office. Sitting behind his desk once more he could hear the familiar sounds of his office workers going about their daily business.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. But now, after speaking to Stacey and learning all about Factoring, he felt such a huge relief, like someone had just lifted a huge weight off 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 sudden panic attacks, not matter where he was. He could feel it all fading 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.His mind wandered back to the very beginning, when he first started his business. He had opened a restaurant at age twenty two when he was fresh out of school. It had been successful. Offering home cooking in his own hometown, his business had really prospered.But he had gotten bored. He wasn't passionate about the food industry. He thought about it for a long time, then decided it was time to sell his restaurant. He took six months off, and during that time he decided to create Gregory Trucking. So he did it. 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 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. Paul's eyes opened, he sat forward in his chair and turned on his computer. He had lots to do. There would be plenty of time later to be thankful, but for now it was time to get back to work.
More Trucking Factoring Company Story Articles
Precisely why Truck Establishments Work with Factoring Firms.
As the operator of your own company, you may well be more than perceptive already of the difficulty in making sure that cash flow issues do not become a difficulty down the line. After all, the toughest thing that can in all probability take place for your firm is to find yourself embroiled in a long and difficult predicament that leaves you forever trying to find the finances you need on an continuous basis.
For pretty much any company in this position, the concern can come for waiting for work to clear up and actually be repaid into your account. Statements, checks, and the like can take a long time to actually to beprocessed which can certainly leave you with momentary available resources problems. Fortunately, there are opportunities out there for companies to explore-- and just one of these is factoring firms.
Factoring firms will, in exchange for your bill of sales, provide you with the cash money right away so that you don't need to stress over the lingering phase which could make paying off the expenses and obtaining materialsmore tough. With this type of setup, invoice factoring can come to be tremendously helpful for lots of enterprises who have to avoid a money pitfall which they have discovered themselves in.
Due to the fact that, basing on the volume of the task, it can take up to 60 days for some establishments to get paid out then it's critical to blanket your own back and certainly not leave yourself resources short to pay off the bills. After all, how many businesses have two months earnings just occupying there to handle all their spendings till they earn?
This is primarily correct of trucking companies. They generally manage numbers of accounts which means a notable volume of collection time demands company owner themselves. Seeking to get paid in time can develop into an amazing hassle and this is precisely why you make use of truck factoring firms who are glad to help out truckers particularly.
As we all recognize, trucking is an surprisingly big field with numerous agencies out there working with hundreds of drivers. Sadly, numerous of these drivers end up in money difficulties considering that they are still anticipating work from six weeks in the past to actually pay them. When this is the case for a truck agency, choosing factoring companies for support could be the finest option left.
This signifies that a truck organization can provide the salaries of the staff, keep all the vehicles filled with gas and continue to scale, evolve and expand without continually waiting for the income which is taking too long to come in. Trucking Enterprises working without a factoring system put in place are leaving themselves at considerable hazard, as contenders cash out quickly and proceed to broaden.
There's absolutely not a thing to be troubled about when it comes to using a Factoring business-- they aren't like a bank or a person who is going to leave you with a large stack of liability to repay. You give them legitimate invoices from work you have already finished , you are simply quickening the payment process.
In the Usa, where truck companies do well, factoring enterprises are not considered accepting loan of in any capacity. This confidential deal then permits both parties to profit and indulge in a comfortable future-- it gives the factoring company a secured resource of earnings to add to the list and it gives the trucking company the required finances that they sweated to earn.
The trucking company bestows their invoices to the factoring business. The trucking factoring agency then obtain the installment payments from the trucking company's clients. Factoring has beenaround for hundreds of years and has been employed for long times by a lot of varied business-- but none much more so than truckers. While you could miss out on a small part of the money, something like 1-3 % depending upon who you partner with, it signifies that you are acquiring the money today and can actually start setting the resources to perform.
Once and for all, an IOU or an invoice is absolutely not going to pay for costs, is it? For trucking enterprises when the hard earned cash can be great one day and gone the next, it's up to the drivers to work sensibly and to make sure they are leaving themselves with a notable volume of time and money to get through the week until they are paid for again.
So the next moment your trucking establishment is enduring some momentary capital problems and you are devoting excessive time chasing slow paying clients, why not start considering employing a factoring businesses as a means to get your cash and give yourself a more comfortable future in the eyes of your trucking team and your bank difference?
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.
What Are 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 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?
While not every business can take advantage of Trucking Factoring account financing (you have to have a business that has account receivables) for those that can use this type of financing there are several distinct benefits.
1. You Won't Incur Debt. Since the Trucking Factoring company actually buys your accounts receivable you don't actually incur debt like you do with a bank loan. 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. In the event that your business fails, you wouldn't have to be concerned about someone coming after your personal or your business assets in order 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. 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 makes it easier for fledgling businesses to get the financing they need through a Trucking Factoring company (as long as their accounts receivables are in good order) then from a bank, who may not feel that you have been in business long enough to be worth the risk of issuing you a loan.
3. You'll receive the money faster. With a Trucking Factoring company you can actually get the money you need faster. 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. 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. However, there are also a couple of other benefits that a factory company can offer your business is far beyond the scope of the 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.A Trucking Factoring company is not the only method of gaining access to finance for the running and growing of your business, however it does offer a financing option well worth considering.