What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is vitally 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 in 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 since payroll and gas provide in the time between payment, and not paying your drivers is never a good business rehearsal. 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 for trucking companies to consider:
Asset-Based Lending
Also known as factoring, this options refers to difficult . 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% of this cash back immediately from the bills. The remainder of the balance comes after customer repayment, less a share fee that typically ranges from 1-5%.
This options best for B2B businesses that cannot afford to wait for payment, and also the cost is 4-5% monthly with annual price typically between 18-30%.
Bank Loans
Though in order to come by, bank loans are often the cheapest type of financing. Mortgage loan process involves an application and athleanx workout review the company’s creditworthiness and financial reports. Small companies especially are more likely to be thrown to the wolves for loans, although exceptions do be.
After approval, fund disbursement usually takes about 30-90 days achieve a trucking company’s banking. This form of funding is best for trucking outfits by using a great credit ratings and don’t require the money immediately.
Cash-Advances
Cash advances take place when a small-business receives funding sum from our lender. The company pays financial institution back with percentages regarding their monthly card receipts prior to loan (plus a predetermined rate) is repaid. Happen to be legal limits to the rates, and they will cannot be changed retroactively. The benefit to cash advances is immediate cash- occasion the fastest method for obtaining cash without likely to a loan shark.
This financing method very best for trucking companies who require immediate cash for any amount of this time and have limited financing options. Costly is usually 20% or older.
Lease-Back
A trucking company could sell property, plant, and/or equipment, and simultaneously leases it back for cash money.
It ideal for for trucking companies with valuable plant or equipment assets which usually underutilized, and the cost is monthly lease payments as well as the depreciation and tax burdens of equipment.
Choices, Choices
Every trucking company is unique, and in addition it is up to them to locate funding solutions that meet their individual needs. Being informed on all your options is initial step toward finding a worthwhile cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
