What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is truly essential 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 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 a chore. But for small to mid-size companies operating on a good budget, it might stop an option. Expenses regarding payroll and gas come 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 is actually not a recipe for financial hardship.
Therefore, trucking companies often have to turn to outside borrowing. The following are some strategies to trucking companies to consider:
Asset-Based Lending
Also known as factoring, this options refers to the process 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 amount of the sale, the client gets 80-90% belonging to the cash back immediately from the bills. 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 firms that cannot manage to wait for payment, along with the cost usually 4-5% monthly with a healthy annual interest rate typically between 18-30%.
Bank Loans
Though difficult to come by, bank loans are these cheapest way of financing. The borrowed funds process involves an application and analysis of the company’s creditworthiness and financial reports. Small companies especially can be denied for loans, although exceptions do be around.
After approval, fund disbursement usually takes about 30-90 days attain a trucking company’s bank account. This form of funding greatest for for trucking outfits by using a great credit report . and don’t need the money immediately.
Cash-Advances
Cash advances take place when a small business receives an advance sum during a lender. Business pays the lender back with percentages regarding their monthly card receipts up to the 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- can be the fastest method for obtaining cash without in order to be a loan shark.
This financing method is best for trucking companies who need immediate cash for any amount of this time and have limited financing options. Zox pro training system is usually 20% and up.
Lease-Back
A trucking company could sell property, plant, and/or equipment, and simultaneously leases it back for cash money.
It very best for trucking companies with valuable plant or equipment assets that are underutilized, and also the cost is monthly lease payments not to mention the depreciation and tax burdens of equipment.
Choices, Choices
Every trucking company is unique, however it is close to them to discover funding solutions that meet their individual needs. Being informed on all the options is one step toward finding a suitable cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
