What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is truly essential to the health within 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 strict budget, it might ‘t be an option. Expenses such as payroll and gas calculate in the time between payment, and not paying your drivers is never a good business rehearsal. Add to that rising fuel costs, delays due to traffic congestion, driver shortages and new regulations, and is definitely a recipe for financial hardship.
Therefore, trucking companies often have to show to outside financing. The following are some strategies to trucking companies to consider:
Asset-Based Lending
Also known as factoring, this options refers to might 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, customer gets 80-90% for this cash back immediately from the invoices. The remainder of the balance comes after customer repayment, less a portion fee that typically ranges from 1-5%.
This option is best for B2B firms that cannot manage to wait for payment, as well as the cost is often 4-5% monthly with an impressive annual rate typically between 18-30%.
Bank Loans
Though tough to come by, bank loans are usually the cheapest form of financing. Mortgage loan process involves an application and overview of the company’s creditworthiness and financial profile. Small companies especially are more likely to be denied for loans, although exceptions do live.
After approval, fund disbursement usually takes about 30-90 days to reach a trucking company’s banking. This form of funding is best for trucking outfits with a great credit record and do not require the money immediately.
Cash-Advances
Cash advances take place when business receives funding sum during a lender. The organization pays the lender back with percentages associated with their monthly card receipts before the loan (plus a predetermined rate) is repaid. Happen to be legal limits to the rates, and also cannot be changed retroactively. The benefits of cash advances is immediate cash- it is the fastest method for obtaining cash without gonna be a loan shark.
This financing method very best for trucking companies who need immediate cash for regarding amount associated with your and have limited financing options. Will not find is usually 20% or even more.
Lease-Back
A trucking company may want to sell property, plant, and/or equipment, and simultaneously leases it back for moola.
It is better for trucking companies with valuable plant or equipment assets usually are underutilized, and also the cost is monthly lease payments additionally, the depreciation and tax burdens of machines.
Choices, Choices
Every trucking company is unique, and it is nearly them inside your funding solutions that meet their individual needs. Being informed on all the choices is initial step toward finding a worthwhile cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
