Trying to run an operation can be challenging when you’re waiting for invoices to be paid. The issue becomes even more compounded when you’re a trucking business, as customers can take as long as 30, 60, even 90 days to pay for services rendered. Often, typical customers are multi-level corporations; before they can pay an invoice, it must go through many supervisors and acquire many signatures. This bureaucratic process can be taxing on the carrier. During this waiting period, trucking companies must continue to pay their bills in order to stay afloat, and with the constant burden of insufficient cash flow how can they be expected to grow?
Unless they’re able to be frugal with their spending, or have a considerable amount of collateral, many trucking companies are forced to rely on credit to keep their businesses thriving. Doing so through traditional means — such as a bank loan — isn’t always an option for smaller companies. Thankfully there is one route open to them that is arguably much more convenient. Freight bill factoring is a type of invoice factoring that allows fleets to stay operational and to grow — helping to speed up a sluggish cash flow.
Freight bill factoring provides a trucking company with cash for their invoices on demand. Rather than waiting up to three months to be paid for a job they’ve already completed, they receive the bulk of their money up-front in as little as a day.
The factoring company for truckers purchases the invoice for a small fee; trucking companies then receive most of the payment right away, with the remainder sent once their customers pay the factoring company back in full.
The funding options provide freight companies with much needed cash to pay their drivers, recoup transportation costs, and take on new jobs — and it enables them to do this without taking on further debt.
One factoring company that is transparent and reliable is Accutrac Capital as they don’t require set up costs and have zero hidden fees. Approval is often available the day after application, with high advance rates. Three different factoring options available include flat rate factoring for 90 days starting at 1.59%, a factoring line of credit starting at 0.022% per day (the most cost-effective option or large fleets), and flex factoring starting at only 0.49% for 10 days which is a great option for carriers with dependable customers. Visit their informative blog for a full list of the benefits that invoice factoring can offer — such as access to a discounted-fuel program, full service truck stops, and outstanding customer support. They even provide equipment financing for those that want to expand their fleet, accepting old machines as collateral.
If you’re considering whether factoring is right for you, choose a company you can work with long-term, one specialized in providing funds to trucking and transportation companies, and one that is ready to help you tackle all your business needs in a timely and transparent manner. With the right factoring company, you always have a backup plan you can rely on, even when you can’t rely on the speedy payments of your customers.