Profits That Lie Hidden In Your Company -
Our Invoice Factoring Services
Your Truck Company
The Money You Want
Medium-Size freight brokerage businesses, especially those who have not been around for really long, will frequently find it hard to secure a loan. Banks are often reluctant to provide cash to companies that do not have a lot of income and properties. They likewise want evidence of the practicality of a business and hence require that most operations, specifically little ones, been around for a certain amount of time prior to they want to turn over any money. Because of this, a small company typically has a couple of money producing alternatives when requires occur. One choice offered, however often neglected, is invoice factoring. This is an excellent method for a medium-size business to obtain cash.
How To Get More Cash - Pick
A Truck�Factoring Company Instead Of A Typical Bank Financing
Exactly how to Enhance Money Flow Without Borrowing -Cash Money flow is among the main reasons companies fail.
At one time or another, every business, even successful ones, have actually experienced bad cash flow.
Money flow does not have to be a problem any more. Do not be fooled -- banks are not the only places you can get financing. Other options are offered and you do not have to borrow. Exactly what is trucking factoring ? One solution is called invoice factoring services. Truck Factoring is the process of offering accounts receivable to a financier rather than waiting to collect the cash from the
client. Oh, the Irony- Trucking factoring has a paradoxical difference:
It is the monetary
foundation of many of America's most successful companies. Why is this ironic ? Since receivable loan funding is not taught in business colleges, is rarely mentioned in company plans and is fairly unidentified to the majority of most of American business individuals.
Yet it is a monetary process that releases up billions of dollars every year, enabling countless companies to grow and prosper. Invoice Factoring has actually been around for thousands of years. Commercial Factoring Companies are investors who pay cash for the right to receive the future payments on your invoices. An overdue receivable or invoice has value. It is a financial obligation your client has actually to pay in the near future. Factoring Principals--Although factoring
deals solely with business-to-business deals, a big portion of the retail company uses a factoring principal. MasterCard, Visa, and American Express all use a form of factoring in their retail transactions. Using the purest meaning of the word, these big customer finance business are truly just large Commercial Factoring Businesses of consumer paper. Think about it: You purchase at Sears and charge
it to your MasterCard. The store gets paid almost immediately, even though you do not make payment up until you are prepared.
For this service, the credit card business charges Sears a fee (typical common normal charges range from two to 4 percent of the sale). The Advantages Truck Factoring can offer many benefits to cash-hungry companies. Instead of waiting 30, 60, 90 days or longer for payment on a product that has currently been delivered, a company can factor
(sell) its receivables for cash at a little price cut
off the dollar value of
the invoice. Payroll, advertising efforts, and working capital are just a few of the business needs that can be satisfied with instant cash.
Invoice Factoring Services offers the means for a producer to renew inventory and make more items to sell: There is no longer a need to await for earlier sales to be paid. FACTORING is not just a money management device for manufacturers: Almost any kind business can take advantage of Staffing Factoring. Typically, a business that extends credit
will have 10 to 20 percent
of its yearly sales bound in accounts receivable at any given time. Think for a moment about 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 cash to meet those obligations. Using truck factoring companies is a quick and easy procedure. The factor buys the invoice at a discount, usually a couple of portion
points less than the stated value of the invoice.
Please call our freight bill factoring experts at 1 - 888-239-9162
or E-mail Us
The U.s. Transportation Organization
states that there are about
195,000 workers with transportation
250,000 private service providers trucking
companies accredited to
operate in the United States that transported,
according to their latest data of millions
products, materials and
standard materials .
There are several common
teams on our country
highways transporting these
crucial items to our
stores, manufacturing facilities and ports.
Furthermorefreight invoice factoring
countless of them and offer their
accounts receivablesfinancing facilities
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
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Since the mid 1980s Gardner 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, Gardner 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. The money was flowing, and times were great.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, Gardner 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. And as spring turmed to summer and summer into the early days of fall, Warren Smith, CEO of Gardner felt a chill go down his spine whenever he would look at the weekly A/R reports. The number of clients who were late in their payments was continuing to grow.He had already been to the administrators to ask what the actual problem was. 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 Gardner 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. But after doing the cursory research for this and talking to friends in the field, he found that alas, no, customers of Gardner hadn't gone elsewhere. They had just gone home.The situation looked dire to Warren Smith. 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. In the evenings he would discuss his concerns with his wife, Joann, and still find no relief from the worry and frustration.
""I have a bad feeling, Lin,"" he would say with deep woe.""What could you do differently?"" she would say.Warren 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 on the road, delivering good to all his loyal customers. 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 think I know what it could be,"" said Warren. ""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.
""Warren 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 next day Warren strolled into his office and was determined to sit down and make every phone call to every client who had owed Gardner money. Now, it wasn't the most efficient way to spend a day as a chief executive, what he really needed to be doing was to be overseeing all of the other intricacies of shipment and delivery and reaching out to prospective clients or retraining his sales team to do the same. Even though he was doing something to help his company, he knew he had folks on salary to do just this thing. A waste of time - a waste of money - he had the best intentions, but all the while Warren 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 Staceyerley knocked at his door.
""Can I have a word with you Warren?"" she queried, standing in the doorway.
""Of course Stacey, please come in."" Warren relaxed back into his chair and looked up at Staceyerley.""Well, I did a little searching this afternoon and tried to figure out a way out of this mess Warren."" 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?"" Staceyerley asked.""It sounds vaguely familiar. What is it?"" he said.She began, ""Well, it's really very simple. Basically, factoring invoices means that we would get paid immediately for the loads we haul.""Warren interrupted ""Immediately?"".""Immediately, yes"" she added, ""In a nutshell, it's pretty easy. We can have an expert account manager review our numbers and help us complete a company profile. That profile will also include investigating our accounts receivable aging reports, our existing customer credit limits and so on. In addition, factoring will assist in determining our customers' creditworthiness, independent from their credit relationship with our company. It�s a broad view.��I see,� Warren said. �And then what?��Well, after their review, and we�re approved for a factoring contract, we can negotiate terms and conditions. You'll be surprised at the amount of flexibility, all dependent upon the credit histories and business volume.
This company tells us what the cost will be to purchase factoring for our accounts receivable. The funding commences once we�ve arrived at an agreement.�Warren was still a little concerned. He leaned forward in his chair and studied the paperwork very closely.""I don't know, Stacey - it just sounds too good to be true"", Warren said quietly.""Yes, I know; that's exactly what I thought at the beginning. 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 Warren,"" she drew a circle around a paragraph on the document before him.""Just how flexible?"" he asked.""It seems that they personalize their factoring charges so that the amount they're prepared to work with is commensurate with our client's debt and our needs. Apparently they can figure this all out in two to four days.
""""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. It's imperative that we keep the business rolling as usual, and every day we go unpaid we're getting closer and closer to dealing with some serious issues in both the short term and the long term,"" Warren said.Warren took in a long slow breath, then looked at his secretary with something like hope in his eyes.""Exactly�. I think this might just be a way out of the trouble we're in with these folks who owe us money.""Warren took a moment to think about this solution, and agreed with his secretary. The customers who were in debt to Gardner Truck & Haul were professional resources of the company, but they were also long-standing friends. Just because they were experiencing difficulties paying their own bills now, Warren was very concerned about losing these relationships. Warren knew only too well that the whole economy was floundering, and that it was not going to change overnight. 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.""Let me go over this tonight Stacey, and thankyou."" Stacey nodded, stood up and left the office feeling that she had helped her employer keep on his shirt and hers too.Warren sat behind his desk and looked over the details Stacey had not mentioned in their meeting. He wondered if there might be other problems freight factoring could help Gardner 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, Gardner could receive up to fifty-percent cash advances upon load pick-ups. Warren 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.""I must tell Herbert the good news,"" Warren muttered to himself.His son-in-law Herbert had liked the idea of Gardner 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 Warren knew the struggles Herbert would face, but he still encouraged him to follow his dream. With the faltering economy, if a big fish like Gardner was hurting, a little guy like Herbert was about to catch his death. But, maybe the answer for both of them was in freight factoring, and Warren was going to find out very soon.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, Warren 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. Warren recalled those dismal months when he wasn't aware of freight factoring, and he shuddered at those memories. If Warren hadn't discovered freight factoring at just the right time, his business may not be operating today.
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The Future of a Trucking Company, and Factoring The phone was ringing on his desk, and Danny Myers just sat there letting it ring. 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. Myers Trucking Company was at a turning point of growth and Danny had to decide if signing with a factoring company was the right way forward.
Danny�s father had started as an owner-operator and had grown Myers Trucking Company into a fifteen trailer fleet over forty years. Yes, they had survived some very difficult times when it appeared like they might go under, and even Danny'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 Danny�s hands and he wanted to live to see it in better 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 all have families and the usual household bills. 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, Myers Trucking looked weak in a very strong market.
His father would have told him to wait and to take his time adding on new technology. Danny chuckled, thinking about his father. He remembered when his father was totally against installing GPS units in the cabs. His Dad would say ""Why on earth do you need some stranger telling you to get off the exit that everyone knows 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. His father days were long gone and technology was actually an important improvement for the business such as having Qualcomm to cut down on fruitless time communicating on the phone for bills of lading.
Danny knew he was right in his forward thinking. How would he take Myers Trucking to the next level? More importantly, how could he afford it? Business funding was tied up in fuel bills and the mortgage for the garage and office. He just finished paying off the small bank loan for installing satellite radio in the trucks for the guys.
But was factoring the answer? 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 the assistance of factoring, you have to wait for customers to send you the payment which is often 30 days late. During those thirty days the trucking company can't pay its employees and bills with invoices.
Now it was time for Danny 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! 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?
But it turned out to be quite easy. 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. He liked the idea of a long term commitment so he knew he wouldn�t have to bother going back and forth to different companies and wasting time filing more forms. Nobody charged him for credit checks and they offered him a fuel advance on the pick-up of the load. In fact there were a few companies who offered him a non-recourse factoring program, and this was exactly what he had been hoping for. He was more than happy with the figures he was offered in percentage terms on the freight bills. It sounded like a great scheme to him.
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 Danny 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 think poorly of Myers 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.
Danny stepped out of his office to let his secretary know to expect the arrival of the factoring contract shortly. 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. With the capabilities of this new cash flow, Danny could actually expand Myers Trucking Company further across the country and perhaps even go international into Canada. His heart felt full knowing his sons wouldn�t have to worry about money because of the right decisions he had made for their trucking business.
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�So, this is not a loan?� Hugh Washington asked as he leaned back in his chair, crossing his legs. The woman sitting across the desk from Hugh smiled at him, shaking her head.�Not quite,� she said.Hugh Washington owned a small trucking company, and his business had recently fallen on difficult times. Trucking could be a profitable business, and for a little under a decade, it had been for Raul. He named his business Gonzalez Trucking, named after Milton and Troy, his two grandfathers. They had both been hardworking men, and had done a lot to make Hugh the same.Six months ago disaster struck Raul's business when two out of his fleet of fifteen trucks were taken off the road.
One was involved in a very costly accident, and the other simply rolled over, and headed to the trucking graveyard. The financial security of Raul's company relied on his full fleet on fifteen being on the road, and missing two trucks was just devastating . In addition, he just didn't have the available cash to buy a new truck, plus repair the other one.A big problem a lot of trucking companies came across was how bills were paid in the industry. 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.Hugh was an excellent business man, and he certainly hadn't done anything wrong. Certain events had occurred that he couldn't possibly have predicted, and now he had to find a way to protect his business and prevent it from ultimate devastation.That�s where the woman across the desk came in. Hugh knew she was employed by a Factoring company and that her name was Rhonda. Hugh 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.Rhonda 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.Hugh agreed. It sounded good to him, almost 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.�Rhonda nodded. �We get that a lot. 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 what we�re here for.��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,� Rhonda said with a smile. �Let�s see what we can do to help you.�And right there and then they created a business profile. Hugh filled the form out, with Rhonda available to help him if he needed it. The profile filled Rhonda and her company in on Raul�s company, and would help them determine if he was suitable for factoring. In truth, not all companies were. Some were beyond factoring special brand of help, and sometimes things weren�t even dire enough for it. Listening as Hugh filled out his form, Rhonda was pretty sure he was a perfect candidate for factoring.Rhonda took the completed form and placed it in her briefcase. She then stood, reached across the desk and shook Raul�s hand. He also stood up, and they smiled at each other. Hugh walked Rhonda 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 Rhonda though, learning about factoring, it felt like a weight had been lifted from 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. Home cooking in his hometown, and he had done very well.But it wasn't what he really wanted to do. 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 Gonzalez Trucking. So he did it. Once again he built a company from the ground up. The business had been an instant success.And then the trucks went down, and his success looked to be in flux. He was nearing fifty. He didn�t think he had it in him, to save this company. But he couldn�t give up. 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 it seemed as though he wouldn't have to - all because of Factoring. Hugh opened his eyes, sat forward, turned his computer on. 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.
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The key reasons why Truck Companies Utilize Factoring Firms.
As the owner of your own business, you may well be more than mindful already of the challenge in making sure that cash flow matters do not become a predicament down the line. Anyway, the worst thing that can possibly transpire for your business is to find yourself embroiled in a long and challenging condition that leaves you forever trying to find the finances you need on an recurring basis.
For pretty much any enterprise in this case, the challenge can come for waiting for work to clear up and actually be paid into your balance. Invoices, checks, and the like could take a while to actually to be taken care of which could leave you with temporary capital issues. Luckily, there are solutions out there for enterprises to look into-- and just one of these is factoring firms.
Factoring firms will, in exchange for your bill of sales, supply you with the resources now to ensure that you don't have to stress over the lingering time span which could make paying out the expenses and purchasing materialsmore difficult. With this kind of setup, invoice factoring can end up being remarkably beneficial for various companies who have to get out of a cash ploy which they have found themselves in.
Because, basing on the scale of the project, it can take up to 60 days for some companies to get paid out then it's critical to take care of your own back and definitely not leave yourself money short to pay the costs. After all, how many business enterprises possess two months earnings just occupying there to deal with all their bills until they earn?
This is particularly correct of truck companies. They generally handle good deals of statements which means a substantial quantity of collection period demands company owner themselves. Seeking to get paid promptly can become an unbelievable trouble and this is the key reasons why you work with truck factoring companies who are thrilled to help out truckers primarily.
As we all understand, trucking is an exceptionally huge field with countless companies out there handling hundreds of operators. Regretfully, numerous of these drivers land up in cash troubles because they are still waiting for work from six weeks back to actually pay them. When this is the circumstance for a truck company, choosing factoring firms for assistance maybe the most ideal option left.
This means that a truck firm can pay off the salaries of the staff, keep all the trucks topped off with gas and continue to escalate, develop and expand without constantly waiting for the funds which is taking too prolonged to come in. Trucking Companies working without a factoring system established are leaving themselves at critical risk, as rivals cash out quickly and carry on to expand.
There's genuinely nothing to be distressed about when it comes to utilizing a Factoring establishment-- they typically aren't like a financial institution or a person who is going to leave you with a big pile of debt to repay. You give them genuine invoices from job you have already accomplished , you are only just facilitating the repayment system.
In the United States, where trucking firms develop, factoring companies are not considered getting a loan in any capacity. This private arrangement then enables both parties to profit and take joy in a convenient future-- it provides the factoring firm a secured resource of income to add to the list and it supplies the trucking business the required cash that they worked hard to gain.
The trucking enterprise bestows their invoices to the factoring enterprise. The trucking factoring company then collect the installment payments from the trucking company's customers. Factoring has been in existence for hundreds of years and has been employed for many years by many varied fields-- but none much more so than truckers. While you might possibly miss out on a small part of the money, something like 1-3 % depending on who you partner with, it signifies that you are obtaining the cash today and can actually start off putting the cash to operate.
After all, an IOU or an invoice is absolutely not going to finance spendings, is it? For trucking enterprises when the money can be great one day and gone the next, it's up to the drivers to work sensibly and to make sure that they are leaving themselves with a significant measure of time and money to get through the week up until they are handed over once more.
So the next period your trucking business is having some momentary capital dilemmas and you are spending a lot of time chasing inactive paying clienteles, why not begin looking at employing a factoring companies as a method to get your cash and give yourself a more worry-free future in the eyes of your trucking staff and your bank dividend?
Traditional Bank Loans
Bank loans are an extremely traditional way for a business to get financing. While these loans are handy they are not available to every business. For example, a fairly newly established business simply may not have the assets to readily get a loan from a bank, even if they do, the standard collateral for a business loan is the business itself, which means that if you cannot make your loan payment, you risk losing 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 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?
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. You Won't Incur Debt. You don't incur debt as you do with a bank loan because the Trucking Factoring company actually purchases your accounts receivable. One of the main benefits of this kind of financing is that your business credit rating and your personal credit rating won't be affected. 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. There's 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. In addition, while the Trucking Factoring company does run a credit check on your customers whose accounts receivables are offered for financing, the state of your credit is not an issue. 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. 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.Interest is Paid Up Front. With a bank loan interest continues to build, and this has to be paid the whole time you have a business loan; however with a Trucking Factoring company there is no interest - they take it right off the top by deducting it from the total amount of receivable accounts. 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. The Trucking Factoring company takes over that chore, since it is now their money to collect. Trucking Factoring companies are very efficient at debt collecting, and this frees up your valuable time to devote to running your 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.