What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is essential 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 within 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 halt an option. Expenses since payroll and gas come in the time between payment, and not paying your drivers is never a good business put into practice. Add to that rising fuel costs, delays due to traffic congestion, driver shortages and new regulations, and is actually not a recipe for financial hardship.
Therefore, trucking companies often have to show to outside borrowing. The following are some strategies for 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 primarily 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 statements. The remainder of the balance comes after customer repayment, less a percentage fee that typically ranges from 1-5%.
This option is best for B2B businesses that cannot manage to wait for payment, along with the cost usually 4-5% monthly with annual pace typically between 18-30%.
Bank Loans
Though in order to find come by, bank loans are often the cheapest involving financing. Mortgage loan process involves an application and athleanx workout review the company’s creditworthiness and financial profile. Small companies especially are more likely to be rejected for loans, although exceptions do live.
After approval, fund disbursement usually takes about 30-90 days attain a trucking company’s life’s savings. This form of funding is better for trucking outfits along with a great credit file and don’t need the money immediately.
Cash-Advances
Cash advances take place when a company receives an advance sum from a lender. They pays the lending company back with percentages of that monthly card receipts prior to loan (plus a predetermined rate) is repaid. Happen to be legal limits to the rates, which cannot be changed retroactively. The profit to cash advances is immediate cash- it is the fastest method for obtaining cash without going to a loan shark.
This financing method is better for trucking companies who need immediate cash for any amount your own time and have limited financing options. Will not find is usually 20% or older.
Lease-Back
A trucking company may choose to sell property, plant, and/or equipment, and simultaneously leases it back for cash.
It is better for trucking companies with valuable plant or equipment assets that are underutilized, and the cost is monthly lease payments additionally, the depreciation and tax burdens of tools.
Choices, Choices
Every trucking company is unique, make use of is nearly them to find funding solutions that meet their individual needs. Being informed on all your options is customers step toward finding the right cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
