What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is critical to the health on 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 the 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 problems. But for small to mid-size companies operating on a tight budget, it might halt an option. Expenses regarding payroll and gas come 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 a recipe for financial hardship.
Therefore, trucking companies often have to turn to outside financing. The following are some methods 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 centered on the creditworthiness of the trucking company’s customers.
At the use of the sale, the client gets 80-90% of the cash back immediately from the receipts. The remainder of the balance comes after customer repayment, less a percentage fee that typically ranges from 1-5%.
This choices best for B2B businesses that cannot afford to wait for payment, and the cost is frequently 4-5% monthly with a healthy annual price typically between 18-30%.
Bank Loans
Though difficult to come by, bank loans are most of the cheapest associated with financing. The money process involves an application and athleanx workout review the company’s creditworthiness and financial track record. Small companies especially are more likely to be turned down for loans, although exceptions do live.
After approval, fund disbursement usually takes about 30-90 days to reach a trucking company’s life’s savings. This form of funding ideal for for trucking outfits having a great credit ratings and don’t require the money immediately.
Cash-Advances
Cash advances take place when a small business receives a loan sum from our lender. Business pays the lending company back with percentages of their monthly card receipts just before loan (plus a predetermined rate) is repaid. Happen to be legal limits to the rates, and they will cannot be changed retroactively. The profit to cash advances is immediate cash- can be the fastest method for obtaining cash without going to a loan shark.
This financing method ideal for trucking companies who require immediate cash for the short amount of one’s time and have limited financing options. Cost of is usually 20% and up.
Lease-Back
A trucking company could sell property, plant, and/or equipment, and simultaneously leases it back for earnings.
It ideal for for trucking companies with valuable plant or equipment assets which might be underutilized, along with the cost is monthly lease payments in addition to depreciation and tax burdens of equipment.
Choices, Choices
Every trucking company is unique, however it is nearly them to search out funding solutions that meet their individual needs. Being informed on all options is customers step toward finding a sufficient cash flow solution.
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12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
