Though often overlooked, the trucking industry is really important to the health for 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 a chore. But for small to mid-size companies operating on a strong budget, it might stop being an option. Expenses regarding payroll and gas come in the time between payment, and not paying your drivers is never a good business approach. Add to that rising fuel costs, delays due to traffic congestion, driver shortages and new regulations, and is a recipe for financial hardship.
Therefore, trucking companies often have to show to outside borrowing. The following are some choices 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 centered on the creditworthiness of the trucking company’s customers.
At the use of the sale, the client gets 80-90% of your cash back immediately from the debts. The remainder of the balance comes after customer repayment, less a share fee that typically ranges from 1-5%.
This options best for B2B companies that cannot manage to wait for payment, and the cost is often 4-5% monthly with an effective annual rate typically between 18-30%.
Bank Loans
Though in order to find come by, bank loans are most of the cheapest involving financing. The money process involves an application and athleanx workout review the company’s creditworthiness and financial reports. Small companies especially tend to be denied for loans, although exceptions do be around.
After approval, fund disbursement usually takes about 30-90 days to reach a trucking company’s bank account. This form of funding ideal for for trucking outfits having a great credit file and have no need for the money immediately.
Cash-Advances
Cash advances take place when a company receives an advance sum from our lender. They pays the lending company back with percentages of their monthly card receipts before the loan (plus a predetermined rate) is repaid. There are a bunch legal limits to the rates, and so they also cannot be changed retroactively. The help cash advances is immediate cash- can be the fastest method for obtaining cash without in order to a loan shark.
This financing method ideal for trucking companies who require immediate cash for a much smaller amount your own time and have limited financing options. Zox pro training system is usually 20% or older.
Lease-Back
A trucking company might want to sell property, plant, and/or equipment, and simultaneously leases it back for cash.
It ideal for trucking companies with valuable plant or equipment assets which might be underutilized, as well as the cost is monthly lease payments as well as the depreciation and tax burdens of resources.
Choices, Choices
Every trucking company is unique, that’s why it is up to them to search out funding solutions that meet their individual needs. Being informed on all options is one step toward finding a worthwhile cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444