What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is truly essential to the health within 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 within 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 huge concern. But for small to mid-size companies operating on a good budget, it might ‘t be an option. Expenses regarding 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 it is a recipe for financial hardship.
Therefore, trucking companies often have to turn to outside funding. The following are some options for trucking companies to consider:
Asset-Based Lending
Also known as factoring, this options refers to might 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 time of the sale, customer gets 80-90% of the cash back immediately from the receipts. The remainder of the balance comes after customer repayment, less a portion fee that typically ranges from 1-5%.
This option is best for B2B companies that cannot manage to wait for payment, and the cost is frequently 4-5% monthly with a powerful annual interest rate typically between 18-30%.
Bank Loans
Though in order to find come by, bank loans are these cheapest type of financing. The borrowed funds process involves an application and review of the company’s creditworthiness and financial story. Small companies especially possess a be denied for loans, although exceptions do be.
After approval, fund disbursement usually takes about 30-90 days to achieve a trucking company’s banking. This form of funding greatest for for trucking outfits using a great credit report . and have no need for the money immediately.
Cash-Advances
Cash advances take place when a small business receives a loan sum during a lender. The company pays the lending company back with percentages of that monthly card receipts up to the loan (plus a predetermined rate) is repaid. Undoubtedly are a legal limits to the rates, which cannot be changed retroactively. The benefit to cash advances is immediate cash- it is 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 any amount of time and have limited financing options. The cost is usually 20% or more.
Lease-Back
A trucking company could sell property, plant, and/or equipment, and simultaneously leases it back for resources.
It very best for trucking companies with valuable plant or equipment assets which have been underutilized, and also the cost is monthly lease payments additionally, the depreciation and tax burdens of resources.
Choices, Choices
Every trucking company is unique, make use of is close to them inside your funding solutions that meet their individual needs. Being informed on all possibilities is customers step toward finding a suitable cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
