What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is essential 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 from 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 tight budget, it might stop an option. Expenses such as payroll and gas provide 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 it is a recipe for financial hardship.
Therefore, trucking companies often have flip to outside backing. The following are some choices 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 is founded on on the creditworthiness of the trucking company’s customers.
At the use of the sale, the client gets 80-90% belonging to the cash back immediately from the statements. 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 companies that cannot afford to wait for payment, and the cost is frequently 4-5% monthly with a powerful annual pace typically between 18-30%.
Bank Loans
Though hard to come by, bank loans are often the cheapest way of financing. Mortgage loan process involves an application and analysis of the company’s creditworthiness and financial profile. Small companies especially can be denied for loans, although exceptions do be around.
After approval, fund disbursement usually takes about 30-90 days achieve a trucking company’s life’s savings. This form of funding is best for trucking outfits along with a great credit report . and have no need for the money immediately.
Cash-Advances
Cash advances take place when business receives funding sum from our lender. The corporate pays loan provider back with percentages regarding 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 benefits of cash advances is immediate cash- the time the fastest method for obtaining cash without likely to a loan shark.
This financing method is best for trucking companies who need immediate cash for the short amount of time and have limited financing options. Will not find is usually 20% if not more.
Lease-Back
A trucking company may choose to sell property, plant, and/or equipment, and simultaneously leases it back for moola.
It ideal for trucking companies with valuable plant or equipment assets that are underutilized, and the cost is monthly lease payments as well as the depreciation and tax burdens of machines.
Choices, Choices
Every trucking company is unique, that’s why it is nearly them to discover funding solutions that meet their individual needs. Being informed on all options is customers step toward finding a worthwhile cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
