Profits That Lie Hidden In Your Company -
Our Freight Factoring Company
Your Freight Company
The Cash You Want
Medium-Size freight brokerage companies, particularly those who have actually not been in existence for extremely long, will commonly discover it difficult to protect a loan. Banks are typically reluctant to lend cash to businesses that do not have a great deal of earnings and properties. They likewise desire evidence of the practicality of a company and thus need that many operations, specifically small ones, been around for a particular amount of time prior to they are eager to hand over any money. Because of this, a medium-size company typically has few cash producing options when needs emerge. One option offered, however typically neglected, is invoice factoring. This is an exceptional means for a small business to acquire cash.
Cash Flow Satisfaction- or Else! - Choose
A Freight�Brokerage Factoring Company Instead Of A Typical Bank Financing
Exactly how to Enhance Money Flow Without Loaning -Cash Money flow is one of the primary reasons companies fail.
At one time or another, every company, even effective ones, have actually experienced poor money flow.
Money flow does not have to be an issue any more. Do not be fooled -- banks are not the only places you can get funding. Other options are offered and you do not have to borrow money. Exactly what is trucking factoring ? One option is called freight factoring company. Truck Factoring is the procedure of selling accounts receivable to an investor rather than waiting to collect the cash from the
client. Oh, the Irony- Trucking factoring has a paradoxical difference:
It is the monetary
foundation of many of America's most effective businesses. Why is this ironic ? Since accounts receivable factoring is not taught in business colleges, is rarely mentioned in business strategies and is relatively unidentified to bulk of most of American business people.
Yet it is a financial process that releases up billions of dollars every year, allowing thousands of companies to grow and prosper. Invoice Factoring has actually been around for thousands of years. Invoice Factoring Businesses are investors who pay cash for the right to get the future payments on your invoices. An overdue receivable or invoice has value. It is a financial obligation your client has actually agreed pay in the near future. Factoring Principals--Although factoring
offers solely with business-to-business deals, a large portion of the retail business uses a factoring principal. MasterCard, Visa, and American Express all use a type of factoring in their retail deals. Using the purest meaning of the word, these large consumer finance companies are truly simply big Trucking Factoring Businesses of consumer paper. Consider it: You purchase at Sears and charge
it to your MasterCard. The shop gets paid almost instantly, even though you do not make payment up until you are prepared.
For this service, the credit card business charges Sears a fee (typical common normal charges vary from 2 to 4 percent of the sale). The Benefits Commercial Factoring can offer many advantages to cash-hungry business. Rather than wait 30, 60, 90 days or longer for payment on an item that has actually currently been provided, a business can factor
(sell) its receivables for cash at a small discount
off the dollar value of
the invoice. Payroll, advertising efforts, and working capital are simply a few of the company needs that can be met with instant cash.
Freight Factoring Company offers the means for a producer to renew inventory and make even more items to offer: There is no longer a requirement to wait for earlier sales to be paid. Receivable Loan Financing is not just a cash management device for producers: Almost any kind business can benefit from FACTORING. Typically, a business that extends credit
will have 10 to 20 percent
of its yearly sales bound in invoices at any given time. Think for a moment about how much is bound in 60 days' worth of invoices: You can not pay the power bill or today s payroll with a client s invoice, however you can sell that invoice for the cash to meet those obligations. Using trucking factoring companies is a fast and easy process. The factor purchases the invoice at a price cut, usually a couple of portion
points less than the stated value of the invoice.
Please call our freight factoring experts at 1 - 888-239-9162
or E-mail Us
The United states Trucking Organization
mentions that there are about
195,000 work with truck
250,000 private providers trucking
firms certified to
run in the United States that transported,
according to their most current data of millions
products, supplies and
fundamental products .
There are a number of common
teams on our nation
roads carrying these
crucial products to our
shops, manufacturingplants and shipping ports.
many of them and offer their
receivable loan facilities
including the following states.
Alaska, Arizona, Arkansas,
California, Colorado, Connecticut, Delaware,Florida,
Georgia, Hawaii, Idaho State,Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,
Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska,
Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina,
North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina,
South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia,
Wisconsin, and Wyoming
The largest trucking companies in the U.S. set a revenue record in 2013, but revenuegrowth slowed for the second year in a row.
The combined revenue of the 50 largest motor carriers rose to $106.6 billion last year, according to The JOC Top 50 Trucking Companies list, based on data prepared by SJ Consulting Group in Pittsburgh.
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If you're like most drivers, you're looking for a better company in trucking that might be offering the best jobs in terms of pay, freight, and hometime ' not to mention benefits or a sign on bonus. We've got all of our clients listed based on the states where they're hiring, so you can quickly find the best job in your home state. You'll see the very best nationwide trucking companies that have positions available.
EveryTruckJob.com is a free service dedicated to helping professional truck drivers find new truck driving jobs with the best trucking companies hiring today!
Locate truck driving jobs by city, state, position andbenefits offered. Search current driving jobs and fill out the EZ truck driver application customized for cdl trucking jobs
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Since the mid 1980s Ferguson Truck & Haul have been successfully running their freight business. For more than twenty years they've been delivering goods for most major industries in the nation, with business booming as they traversed the country, in all kinds of weather, for all kinds of clients. During the heady times from 2002 to 2007, Ferguson was a top rated accounts receivable mastermind of the trucking industry. Few customers were ever late on bills and those clients who were, were sure to turn in their late payments within a reasonable amount of time. Cash was flowing and times were good for all.It was just one year later, in 2008, when the economy in the United States took a sharp decline, and both large and small businesses started to notice the squeeze on their pocketbooks: everyone had suddenly gone silent. Business slowed to a crawl
. And worse yet, Ferguson had noticed during the early part of 2008 that though the bulk of their clients were always on time with payments, the few late-bloomers there were, had seemingly started to spread this illness. And as spring turmed to summer and summer into the early days of fall, Alex Ford, CEO of Ferguson felt a chill go down his spine whenever he would look at the weekly A/R reports. The numbers of clients who owed him back debt were growing.He had gone to his administrators and asked them what the problem had been. Were they doing something wrong or different when it came to reaching out to delinquent accounts? By his bookkeepers records, this wasn't the case. Perhaps he was losing his customers to his competitor, who seemed to offer very low prices with no guarantee of quality or performance, and these clients who were in debt to his company had possibly disappeared leaving him stranded. Perhaps they were unable to pay their debt to him, but were able to meet the costs of a lesser service. But after doing the cursory research for this and talking to friends in the field, he found that alas, no, customers of Ferguson hadn't gone elsewhere. They had just gone home.This current state-of-affairs was causing Alex Ford to have some very restless nights. Alex was very concerned, because there were constant overheads, goods to ship, employees to pay, and trucks which needed to be maintained, but there just wasn't the money coming back into the business. After work he would confide in his wife, Bertha, and neither were unable to stop the constant worry over the lack of funds.""I have a bad feeling, Lin,"" he would say with deep woe.""Well, what do you think it is?"" she would say.Alex would stare off for a moment and then close eyes. He could see the fleet of trucks he had purchased over the years. He could see them on the road, delivering good to all his loyal customers. But somewhere, a haze would form over his fleet and the vast number of vehicles would disappear to but a few. What on earth was happening to create the death of his business?""I know what it is,"" Alex said. ""For way too long I've been relying solely on profits received from invoices. I've let too many of our customers go too long without paying on their bills."" Bertha would look at her husband lovingly, and holding his hand would say 'It's such a harsh economy these days and our clients must be having difficulty meeting their responsibilities'.""Alex knew his wife meant well, but he knew that he was responsible for too many people to sit idly by, waiting for the sun to peak over the clouds.The following day Alex walked into his office with a spring in his step, determined to call each and every client who owed money to Ferguson Truck & Haul. Now, it wasn't the most efficient way to spend a day as a chief executive, what he really needed to be doing was to be overseeing all of the other intricacies of shipment and delivery and reaching out to prospective clients or retraining his sales team to do the same. But, he felt like he was doing something proactive to help his business, even though he had staff on salary to do just that thing. Wasting money, wasting time - even with the best of intentions, Alex knew that he was in trouble.
Poor Alex spent the whole morning trying in vain to contact his debtors: they promised to call back, dodged his calls, or made small interest-only payments. He was beginning to feel quite despaired when his secretary knocked on his door.
""Alex, can I have a word?"" she queried, standing in the doorway.
""Sure thing Viola, come on in."" Alex relaxed back into his chair and looked up at Violaerley.""Well, I did a little searching this afternoon and tried to figure out a way out of this mess Alex."" She opened up a folder she had been carrying and pulled out a small wad of papers, placing them on the desk in front of him.""Have you ever heard of factoring?"" Violaerley asked.""It does sound vaguely familiar. What is it?"" he said.""Well,"" she began, ""It�s actually quite simple really.
Basically, factoring invoices means that we would get paid immediately for the loads we haul.""""Immediately?"" Alex interrupted.""Immediately, yes"" she added, ""It's actually very simple. We can have an expert account manager review our numbers and help us complete a company profile. Included in the profile would be the investigation of our accounts receivable aging reports, our current customers' credit limits etc.. In addition, factoring will assist in determining our customers' creditworthiness, independent from their credit relationship with our company. It provides a very broad view.��Alex replied cautiously ""I see - and what happens then?��Well, after their review, and we�re approved for a factoring contract, we can negotiate terms and conditions. There�s a lot of flexibility depending on the business volume and credit histories. The company will advise us the cost to purchase factoring for our company's accounts receivable. Once we arrive at a mutual agreement, the funding begins.�Leaning forward, Alex studied the documents very closely.""I don't know, Viola - it just sounds too good to be true"", Alex said quietly.""Yes, I know; that's exactly what I thought at the beginning. But think about it, Alex: they've guaranteed that experts will do all the paperwork, and that will free us up to do what we should be doing - focusing on our customers in good standing, and that kind of stuff. And they're flexible Alex,"" she underlined a paragraph on the paper before him.""How flexible?"" asked Alex.""It seems that they personalize their factoring charges so that the amount they're prepared to work with is commensurate with our client's debt and our needs. It only takes 2 to 4 days for this to be figured out. """"That sounds pretty good, seeing as we tapped ourselves out with bank loans last year to repair the fleet and money sure is tight. It's imperative that we keep the business rolling as usual, and every day we go unpaid we're getting closer and closer to dealing with some serious issues in both the short term and the long term,"" said Alex.Alex took in a long slow breath, then looked at his secretary with something like hope in his eyes.""Exactly�. This could very well be the answer to resolving the problems we're having with these clients who still owe us money.""Alex thought about this and agreed with Violaerley. The customers who were in debt to Ferguson Truck & Haul were professional resources of the company, but they were also long-standing friends. They didn't want to throw away these relationships because they were having trouble paying their bills now. Alex knew only too well that the whole economy was floundering, and that it was not going to change overnight. If he didn't handle these debtors in the right way, that unknown amount of time could spell disaster for all of them. He didn't want to lose business but he also didn't want to lose any more money.""Well, let me think about this tonight Viola, thank you."" Viola nodded, satisfied with her work, and she left the office feeling quite content in the knowledge that she had helped Alex keep the shirt on his back, and possibly hers too.Alex stayed at his desk for a long time, looking over the details they hadn't discussed during their meeting. He wondered if there might be other problems freight factoring could help Ferguson Truck & Haul with? With his pencil gliding down the sheet he noticed that the factoring company could help fray the cost of fuel with fuel discount cards and fuel advances. In fact, Ferguson could receive up to fifty-percent cash advances upon load pick-ups. Alex was a typical business man: he despised binding contracts that didn't allow room to breathe, so he was pleasantly surprised to see that the factoring company didn't require a long term contract, that there was no minimum volume required, and that there were no sign-up fees.""I must tell Carlos the good news,"" muttered Alex to himself.Carlos is Alex's son-in-law, and he really admired the ideas behind Ferguson, so much so that only two years before he had started his own transportation service business. Alex knew then what struggles Carlos would face but he encouraged him nonetheless. With the faltering economy, if a big fish like Ferguson was hurting, a little guy like Carlos was about to catch his death. But, an antidote may have been found in freight factoring and Alex was soon to find out.Some months later, having successfully gone through the entire process of the application, having experts study his credit history and statements and review his accounts receivable, Alex found that he was starting his journey out of the despair which had been created for him by his delinquent account holders.They took on reasonable factoring purchase contracts and stopped spending their precious man hours scrambling to collect debt. They used that time to refocus their efforts in being competitive in new territories. Alex looked back on the dismal months of life before freight factoring and almost shuddered at the thought. Had he missed the boat on this one, he probably wouldn't be in business today.
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The Future of a Trucking Company, and Factoring The phone was ringing on his desk, and Don Mason just sat there letting it ring. His morning coffee cooled and his cigarette smoked away in the tray: Don is thinking, and pondering the biggest decision he's ever had to make for his trucking business. Mason Trucking Company had reached a turning point and he now had to make a decision as to whether he should sign up with a factoring company, and indeed if this would be a good or regrettable decision for his business.
Don�s father had started as an owner-operator and had grown Mason Trucking Company into a fifteen trailer fleet over forty years. There had been some hard times when it seemed everything was going to go under and even Don�s mother strapped herself into a cab to make hauls. His father had worked long enough to see the price of hires drop dramatically during the recession and to see the explosion of fuel prices afterwards. Now the company was solely in Don�s hands and he wanted to live to see it in better shape for his sons.
There just never seemed to be enough money to go around, and certainly no spare cash, but to move his company successfully into the future he needed a steady and reliable cash flow. He had employees to pay. They had families and household bills too. Some of the refrigerated trailers were in need of repairs and he felt to stay competitive it was also a good idea to invest in specialized haulers to be ready for the constant requests he was getting for loads of new energy and agriculture equipment. He knew that turning down these requests made Mason Trucking look inefficient and weak in what was currently a strong market.
He knew what his father would have said - 'wait, take your time before adding new technology'. Don chuckled, thinking about his father. His father had been against placing GPS units in the cabs. He would say, �Why do you need the voice of some woman to tell you to get off at an exit that has been the same exit that has been there for years?� He smiled to himself as he remembered his father poking fun at the other drivers who switched to automatic, even though automatic was quite obviously more efficient (though less manly). His father days were long gone and technology was actually an important improvement for the business such as having Qualcomm to cut down on fruitless time communicating on the phone for bills of lading.
Don knew he was right in his forward thinking. How would he take Mason Trucking to the next level? And how would he be able to afford it? Funding was all tied up in the mortgage for the office and garage and in the fuel bills. Thankfully he'd just finished paying off the bank loan for the installation of satellite radio in the trucks.
But was factoring the answer? There was a lot he didn�t understand about the process. It sounded like a ninth grade math problem and he wondered how this would fit into the trucking business. Factoring companies buy your invoices and manage your accounts receivable for a certain percentage of the invoiced amount. The factoring company gives the trucking business its payment right away which allows the business to have continuous cash flow so it can pay employees, buy fuel, and make repairs for upcoming hauls. Without this assistance, you're placed in the position of waiting for payment from your customers, and this can often be thirty days, or more. During those thirty days the trucking company can't pay its employees and bills with invoices.
Don had to really consider what his next step was going to be. Don had heard that there were companies that charged for same day money transfers and would only advance a percentage of the money owed to your company while holding the rest in a private account if they didn�t get their bill payment within 60 or so days. Worse still, if the customer defaulted on payment, the factoring company takes it out of the money supposedly coming to you! He'd even heard about some companies putting you onto a sliding percentage scale regardless of any previously signed contracts for possibly 3% or 7%, and there you are now with 10% coming as a charge to you out of the freight bill. His colleague, Ronnie, who owned a trucking company in Missouri, was nearly destroyed by a factoring company who charged him the full freight bill on top of the fees for factoring. He knew he would have to be very careful if he was to avoid any of these shady companies?
However, it all turned out to be very simple. When he called the factoring companies he discovered they were very open about their business practices, and very friendly and helpful. Customer service appeared to understand their company and explained in clear, concise English exactly how it all worked. He was quite happy to sign an exclusive contract. In fact, he was quite pleased with the idea of a long-term contract because he knew this was a one-off and he wouldn't have to keep going back and forth to different companies. He was not charged for a credit check, and in addition he was offered a fuel advance on the pick-up of a load. In fact there were a few companies who offered him a non-recourse factoring program, and this was exactly what he had been hoping for. Also he was happy to hear how much he was offered in terms of percentages on the freight bills. It sounded like a great scheme to him.
For Don it was quite a relief to be dealing with the factoring company. They were extremely helpful and more personable than the bank staff. It seemed as though those bank people spoke another language, but these factoring guys knew the trucking business and spoke to him like a client, not like a beggar for a handout. The factoring companies didn�t worry over his credit and the debt troubles his father had had in the past of the company. Factoring was based on the credit of his customers and on their reliability which worked well for Don because he and his father had built up good strong relationships over decades with their list of clients. He knew immediately that there would not be any problems when they were contacted by the factoring company regarding their invoices. His clients wouldn't have any problems, nor would they think poorly of Mason Trucking, because the factoring companies handle themselves in such a polite and professional manner, similar to the way his father had managed the business in the past.
Feeling happier now, Don stepped out of his office to advise his secretary to expect to receive the contract very shortly from the factoring company. There was a new bounce is his step now: he knew instinctively that this new step would raise the future of his company to a new and higher level, and that all the stress from the past could now be put behind him. With the capabilities of this new cash flow, Don could actually expand Mason Trucking Company further across the country and perhaps even go international into Canada. He was a happy man again knowing that he had just made a decision which would guarantee the success of his business and his sons wouldn't be inheriting a financial mess.
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Trucking Factoring Articles
�So, this is not a loan?� asked Franklin Kennedy, reclining back into his chair and crossing his legs. The woman who sat across the desk smiled and shook her head.�Not quite,� she said.Franklin Kennedy owned a small trucking company, and his business had recently fallen on difficult times. Certainly the trucking business can be an extremely profitable venture, and for many years it had been that way for Joel. His company was called Berry Trucking, named after both of his grandfathers, Roy and Christian. Both of these men had been very hardworking and had set a great example for Joel.Six months ago disaster struck Joel's business when two out of his fleet of fifteen trucks were taken off the road.
One was involved in a very costly accident, and the other simply rolled over, and headed to the trucking graveyard. The financial security of Joel's company relied on his full fleet on fifteen being on the road, and missing two trucks was just devastating . Furthermore, buying a whole new truck and fixing the other simply took more cash than Franklin had on hand.Paying of bills in the trucking industry is always a major cause for concern for businesses.
Waiting a month or longer for bills to be paid was quite normal. This system works okay as long as no problems arise, but if they do, then things can get quite sticky.Franklin was an excellent business man, and he certainly hadn't done anything wrong. Things had happened that he couldn't have predicted, and he had to figure out a way to keep his business from hurting, or even going under.And that's why he found himself across the desk from this woman. Franklin knew she was employed by a Factoring company and that her name was Laurie. He had accidentally come across her company one night when he was working late, searching the internet to see if there was some solution to his financial dilemma.She sat there now, and explained. �It�s not a loan, we purchase your accounts receivable. We're not giving you finance to be repaid later: we're purchasing something from you, and when you can you can buy it back. That way we�re protected from a complete loss, but you�re protected from the outrageous fees you would find in a loan from the bank.Franklin agreed. It sounded perfect - perhaps too good?.Laurie laughed. �I'm not sure that you believe me,� she chuckled.�Oh no, I do: it just sounds too good to be true. I thought I was going to lose my company.�Laurie smiled, agreeing. �Yes, we get a lot of that. Listen, I�d hate to see you lose your company. You work hard, you�ve put everything you can into it. Sometimes you need help. That's why we do what we do.��In any case, thank you for coming to see me.��It�s right down the road, usually we do it all online, but I didn�t mind swinging on by today,� Laurie said with a smile. �Let�s see what we can do to help you.�And right there and then they created a business profile. Franklin completed the form, with Laurie offering advice as needed.
The completed profile gave Laurie and her company all the information they needed on Joel's business, and with this information they would determine if this business would in fact be suitable for Factoring. Unfortunately, not all companies are. Some businesses are beyond the help of a Factoring company, while other businesses weren't in enough financial stress to warrant it. Listening as Franklin filled out his form, Laurie was pretty sure he was a perfect candidate for factoring.Laurie took the completed form and placed it in her briefcase. Standing up, she reached over the desk and shook Joel's hand. He stood before they shook as well, and then smiled. They said their goodbyes and Franklin walked her to the door, and then returned to his office.His employees were there, seven who worked in the office, and as he sat behind his desk once more he heard the familiar clack of fingers on keyboards, the electronic whine of the copy machine.He shut his eyes. He felt so drained: he had been flailing helplessly for so long, he just knew his business was going to collapse and probably take him with it. Talking to Laurie though, learning about factoring, it felt like a weight had been lifted from his shoulders. He sat back in his chair and ran a hand through his graying but still thick black hair.The long nights, where he couldn�t sleep. The terrifying panic attacks that occurred regardless of where he was. He could feel it all fading away. He wasn�t out of the woods yet, there was still a lot of work to be done, but he could feel it. He was there, he was on the right path, and he was working to make things right.His mind wandered back to the very beginning, when he first started his business. He had opened a restaurant at age twenty two when he was fresh out of school. It had been really successful. Home cooking in his hometown, and he had done very well.But it wasn't what he really wanted to do. His passion didn�t lie with the food industry. He thought about it for a long time, then decided it was time to sell his restaurant. He took half a year off, and in that time he thought to start Berry Trucking. And that's exactly what he did. Once again he built a company from the ground up. He had been successful.Then disaster! The two trucks went down and suddenly his success wasn't looking so guaranteed. He was about to turn fifty. He didn�t think he had it in him, to save this company. But he couldn�t give up. The idea of cutting his losses, shutting down, laying off his workers, it actually made him sick some nights. He didn�t know how to say quit.And now it seemed as though he wouldn't have to - all because of Factoring. Joel's eyes opened, he sat forward in his chair and turned on his computer. He had lots to do. There would be plenty of time later to be thankful, but for now it was time to get back to work.
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The key reasons why Truck Agencies Use Factoring Companies.
As the owner of your own business, you may likely be more than perceptive already of the challenge in making certain that cash flow concerns do not become a problem down the line. After all, the toughest thing that can potentially transpire for your firm is to find yourself swept up in a long and tough condition that leaves you forever looking for the money you need to have on an continual manner.
For pretty much any firm in this condition, the trouble can come for waiting for work to lapse and actually be compensated into your statement. Bill of sales, checks, and the like can take a while to actually to beprocessed which may leave you with momentary cash flow dilemmas. Gratefully, there are options out there for industries to check out-- and among these is factoring companies.
Factoring agencies will, in substitution for your accounts, offer you with the money today to make sure that you don't need to fret about the delaying phase which could make paying out the bills and acquiring toolsmore hard. With this kind of setup, invoice factoring can become remarkably beneficial for a lot of enterprises who have to avoid a cash lure which they have gotten themselves in.
Given that, relying on the volume of the project, it can take up to 60 days for a number of business enterprises to get compensated then it's necessary to take care of your own back and not leave yourself money short to pay the expenses. After all, how many companies possess two months revenue just occupying there to deal with all their bills until they earn?
This is most notably correct of trucking enterprises. They usually take care of great deals of accounts which means a notable volume of collection time entails business owner themselves. Seeking to get paid out in time can develop into an incredible headache and this is exactly why you work with trucking factoring providers who are glad to help out truckers mainly.
As all of us determine, trucking is an unbelievably massive market with lots of organizations out there employing hundreds of vehicle drivers. The sad thing is, plenty of these drivers end up in finances difficulties considering that they are still waiting on work from six weeks earlier to actually pay them. When this is the scenario for a trucking company, turning to factoring providers for assistance could be the most suitable alternative left.
This signifies that a truck corporation can provide the wages of the staff, keep all the cars refilled with gas and continue to surmount, progress and expand without consistently waiting for the funds which is taking too lengthy to come in. Trucking Establishments operating without a factoring system implemented are leaving themselves at considerable threat, as competitors cash out fast and continue to grow.
There's honestly very little to be distressed about when it comes to employing a Factoring agency-- they commonly are not like a financial institution or somebody who is going to leave you with a substantial mound of liability to repay. You give them legitimate invoices from output you have already wrapped up , you are only just speeding the payment system.
In the Usa, where truck enterprises prosper, factoring providers are not considered taking on loan in any capacity. This private deal then permits both parties to profit and experience a worry-free future-- it provides the factoring business a guaranteed resource of income to include in the list and it furnishes the trucking firm the needed finances that they sweated to acquire.
The trucking enterprise bestows their statements to the factoring enterprise. The trucking factoring firm then collect the payments from the trucking company's clients. Factoring has beenaround for centuries and has been adopted for decades by several different markets-- but none more so than truckers. While you might possibly miss out on a small part of the money, something like 1-3 % depending on who you partner with, it signifies that you are acquiring the resources today and can actually start off putting the money to perform.
After all, an IOU or an invoice is certainly not going to cover bills, is it? For trucking enterprises when the cash can be excellent one day and gone the next, it's up to the vehicle drivers to work sensibly and to make certain they are leaving themselves with a notable amount of time and money to get through the week up until they are paid for once again.
So the next moment your trucking enterprise is bearing some short-term cash flow problems and you are shelling out too much time chasing slowly paying customers, why not start considering using a factoring companies as a way to get your finances and give yourself a more convenient future in the eyes of your trucking workers and your bank dividend?
Finance through a bank loan is the normal, or traditional, way of financing your business. These loans can be a life-saver, but they're not always available to every business. As an example, a newly formed business may not have the required assets to qualify for a bank loan, and even if they did, it's usual practise for a bank to use the business itself as collateral. This means that if you default on your loan payment you could lose your entire business. In addition, while you apply for a certain loan amount, that is all the financing you are entitled to. Once the loan is paid off, you can then apply for another loan if the need arises.
What Are Trucking Factoring Companies?
Trucking Factoring companies do not give loans, and the money you get from the Trucking Factoring company does not put you in debt. Rather the financing you receive from a Trucking Factoring company is based on money your business has already earned, but have not yet received. Trucking Factoring companies actually purchase your accounts receivable or at least part of them for a percentage of their total worth, Normally around 80%-95%. The amount of finance you can receive will be based on the amount you have earned and the accounts receivable you are prepared to 'sell.' Once you have set up Trucking Factoring account it continues as long as you wish it too and the amount of money available to you even can grow as your business grows, giving you the ready cash you need to meet your own obligations.
Benefits of a Trucking Factoring Company Vs. A Bank Loan
While not every business can take advantage of Trucking Factoring account financing (you have to have a business that has account receivables) for those that can use this type of financing there are several distinct benefits.
1. There is no debt. You don't incur debt as you do with a bank loan because the Trucking Factoring company actually purchases your accounts receivable. One of the main benefits of this kind of financing is that your business credit rating and your personal credit rating won't be affected. Should the unforeseeable happen and your business fails, you won't have to worry about anyone coming after your personal as well as your business assets to pay off a loan. The debt goes onto your credit report with a bank loan, with only one missed payment adversely affecting your business credit: it would also affect your ability to secure insurance, and may reflect on your personal credit rating as well.
2. No Collateral Required. Another benefit of using a Trucking Factoring company instead of a traditional loan is that you aren't required to provide collateral to the Trucking Factoring company in order to secure financing, because the company �buys� the accounts receivables; not loans you money based on them. In addition, while the Trucking Factoring company does run a credit check on your customers whose accounts receivables are offered for financing, the state of your credit is not an issue. This makes it easier for fledgling businesses to get the financing they need through a Trucking Factoring company (as long as their accounts receivables are in good order) then from a bank, who may not feel that you have been in business long enough to be worth the risk of issuing you a loan.
3. You'll receive the money faster. With a Trucking Factoring company you can actually get the money you need faster. Once the Trucking Factoring company assures itself that the customers in your accounts receivable are likely to pay their debt, the money is usually in the account within 24 hours. Borrowing from a bank begins with vast amounts of paperwork, the loan must be underwritten, and this can take ages before you're notified if the loan has been approved.
4.Interest is Paid Up Front. With a bank loan interest continues to build, and this has to be paid the whole time you have a business loan; however with a Trucking Factoring company there is no interest - they take it right off the top by deducting it from the total amount of receivable accounts. So not only are you relieved of those monthly loan payments, but you also don't have to worry about the building up of interest, as every penny in the account is yours to spend on the business.
As you can see from the above, there are some great benefits to financing through a Trucking Factoring company, and not through a traditional bank loan. However, there are also a couple of other benefits that a factory company can offer your business is far beyond the scope of the bank. The main benefit is that once you've sold your accounts receivable to the Trucking Factoring company, you are free from having to collect money owed by your customers. The Trucking Factoring company takes over that chore, since it is now their money to collect. Trucking Factoring companies are very good at collecting these debts, saving you the time and effort that you need to devote to your growing company.
In addition, since the Trucking Factoring company evaluates the credit quality of your customers prior to purchasing the accounts receivable you gain valuable information into which customers are likely to pay and which ones are not so likely to pay.While a Trucking Factoring company is not the only way for your business to obtain the money it needs to keep growing, it does offer a type of financing well worth considering.