What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is critical to the health belonging to 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 controversy. But for small to mid-size companies operating on a strong budget, it might stop being an option. Expenses with regard to example payroll and gas calculate in the time between payment, and not paying your drivers is never a good business approach. Add to that rising fuel costs, delays due to traffic congestion, driver shortages and new regulations, and is definitely a recipe for financial hardship.
Therefore, trucking companies often have to show to outside a mortgage. The following are some strategies to 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 duration of the sale, customer gets 80-90% of your cash back immediately from the debts. The remainder of the balance comes after customer repayment, less a percentage fee that typically ranges from 1-5%.
This choice is best for B2B businesses that cannot manage to wait for payment, and the cost is frequently 4-5% monthly with annual pace typically between 18-30%.
Bank Loans
Though tough to come by, bank loans are often the cheapest involving financing. Mortgage process involves an application and review of the company’s creditworthiness and financial story. Small companies especially possess a be rejected for loans, although exceptions do be around.
After approval, fund disbursement usually takes about 30-90 days attain a trucking company’s bank account. This form of funding greatest for for trucking outfits with a great credit record 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 that monthly card receipts until the loan (plus a predetermined rate) is repaid. There are a bunch legal limits to the rates, and so they also cannot be changed retroactively. The profit to cash advances is immediate cash- occasion the fastest method for obtaining cash without in order to be a loan shark.
This financing method very best for trucking companies who require immediate cash for the short amount your own time and have limited financing options. Cost of is usually 20% or older.
Lease-Back
A trucking company may wish to sell property, plant, and/or equipment, and simultaneously leases it back for cash money.
It is best for trucking companies with valuable plant or equipment assets usually are underutilized, as well as the cost is monthly lease payments plus the depreciation and tax burdens of tools.
Choices, Choices
Every trucking company is unique, and in addition it is up to them to search out funding solutions that meet their individual needs. Being informed on all the 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
