What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is critical 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 huge concern. But for small to mid-size companies operating on a tight budget, it might ‘t be an option. Expenses with regard to example payroll and gas provide 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 turn to outside backing. The following are some methods trucking companies to consider:
Asset-Based Lending
Also known as factoring, this options refers to might by which businesses sell their accounts receivables to a factoring company. Approval for factoring draws on on the creditworthiness of the trucking company’s customers.
At the use of the sale, customer gets 80-90% for this cash back immediately from the receipts. The remainder of the balance comes after customer repayment, less a portion fee that typically ranges from 1-5%.
This options best for B2B businesses that cannot manage to wait for payment, along with the cost is 4-5% monthly with a powerful annual pace typically between 18-30%.
Bank Loans
Though difficult to come by, bank loans are most of the cheapest way of financing. Mortgage process involves an application and analysis of the company’s creditworthiness and financial reports. Small companies especially possess a be denied for loans, although exceptions do be available.
After approval, fund disbursement usually takes about 30-90 days to achieve a trucking company’s savings. This form of funding ideal for for trucking outfits having a great credit record and don’t require the money immediately.
Cash-Advances
Cash advances take place when business receives a loan sum from your local neighborhood lender. The organization pays the lending company back with percentages from their monthly card receipts before the loan (plus a predetermined rate) is repaid. There are a bunch legal limits to the rates, and they cannot be changed retroactively. The benefits of cash advances is immediate cash- occasion the fastest method for obtaining cash without gonna be a loan shark.
This financing method is the for trucking companies who need immediate cash for any amount associated with your and have limited financing options. Costly is usually 20% or more.
Lease-Back
A trucking company could sell property, plant, and/or equipment, and simultaneously leases it back for resources.
It ideal for for trucking companies with valuable plant or equipment assets which usually underutilized, along with the cost is monthly lease payments in addition to depreciation and tax burdens of gadget.
Choices, Choices
Every trucking company is unique, make use of is nearly them to discover funding solutions that meet their individual needs. Being informed on all possibilities is begin step toward finding a fitting cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444