What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is really important to the health of the US economy. Think about it: without truck drivers delivering goods, interstate commerce would grind to a screeching, tire-burning halt.
Unique Challenges
Despite the importance of trucking companies, the way the system is structured often leaves them from a shaky financial position. Truck companies submit invoices for services rendered, and then often wait 30-90 days for payment on the accounts receivables.
For a bigger company with large cash reserves, waiting to be paid would not be problems. But for small to mid-size companies operating on a strong budget, it might not be an option. Expenses regarding payroll and gas provide in the time between payment, and not paying your drivers is never a good business repeat. Add to that rising fuel costs, delays due to traffic congestion, driver shortages and new regulations, and it is a recipe for financial hardship.
Therefore, trucking companies often have to turn to outside financing. The following are some strategies to trucking companies to consider:
Asset-Based Lending
Also known as factoring, this options refers to carpet by which businesses sell their accounts receivables to a factoring company. Approval for factoring is based on the creditworthiness of the trucking company’s customers.
At the time of the sale, the client gets 80-90% of your cash back immediately from the bills. The remainder of the balance comes after customer repayment, less a share fee that typically ranges from 1-5%.
This choices best for B2B businesses that cannot manage to wait for payment, and the cost usually 4-5% monthly with an impressive annual rate typically between 18-30%.
Bank Loans
Though hard to come by, bank loans are these cheapest type of financing. The borrowed funds process involves an application and review of the company’s creditworthiness and financial reports. Small companies especially will usually be thrown to the wolves for loans, although exceptions do be.
After approval, fund disbursement usually takes about 30-90 days attain a trucking company’s savings. This form of funding is best for trucking outfits using a great credit report . and have no need for the money immediately.
Cash-Advances
Cash advances take place when a small business receives funding sum during a lender. The corporate pays the lender back with percentages of that monthly card receipts up to the loan (plus a predetermined rate) is repaid. There are legal limits to the rates, which cannot be changed retroactively. The benefit to cash advances is immediate cash- can be the fastest method for obtaining cash without going to a loan shark.
This financing method very best for trucking companies who require immediate cash for a much smaller amount associated with your and have limited financing options. Zox pro training system is usually 20% if not more.
Lease-Back
A trucking company may wish to sell property, plant, and/or equipment, and simultaneously leases it back for moola.
It ideal for for trucking companies with valuable plant or equipment assets which usually underutilized, and the cost is monthly lease payments additionally, the depreciation and tax burdens of equipment.
Choices, Choices
Every trucking company is unique, make use of is close to them to find funding solutions that meet their individual needs. Being informed on all the options is begin step toward finding a fitting cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
