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 in 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 a chore. But for small to mid-size companies operating on a strict budget, it might stop an option. Expenses such as 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 flip to outside borrowing. The following are some choices trucking companies to consider:
Asset-Based Lending
Also known as factoring, this options refers to difficult . by which businesses sell their accounts receivables to a factoring company. Approval for factoring centered on the creditworthiness of the trucking company’s customers.
At the amount of the sale, customer gets 80-90% for this cash back immediately from the statements. The remainder of the balance comes after customer repayment, less a portion fee that typically ranges from 1-5%.
This choices are best for B2B companies that cannot manage to wait for payment, as well as the cost is 4-5% monthly with a healthy annual price typically between 18-30%.
Bank Loans
Though in order to find come by, bank loans are an cheapest type of financing. Mortgage loan process involves an application and review of the company’s creditworthiness and financial history. Small companies especially will usually be rejected for loans, although exceptions do exist.
After approval, fund disbursement usually takes about 30-90 days attain a trucking company’s bank account. This form of funding ideal for for trucking outfits using a great credit report . and don’t require the money immediately.
Cash-Advances
Cash advances take place when an organization receives funding sum during a lender. Business pays the lending company back with percentages from their monthly card receipts prior to loan (plus a predetermined rate) is repaid. Undoubtedly are a legal limits to the rates, and they will cannot be changed retroactively. The advantage of cash advances is immediate cash- the time the fastest method for obtaining cash without in order to a loan shark.
This financing method very best for trucking companies who need immediate cash for a short amount of one’s time and have limited financing options. Cost of is usually 20% or more.
Lease-Back
A trucking company might want to sell property, plant, and/or equipment, and simultaneously leases it back for earnings.
It ideal for trucking companies with valuable plant or equipment assets which usually underutilized, and the cost is monthly lease payments in addition to depreciation and tax burdens of tools.
Choices, Choices
Every trucking company is unique, that’s why it is close to them to search out funding solutions that meet their individual needs. Being informed on all options 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
