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 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 strong budget, it might ‘t be an option. Expenses such as payroll and gas calculate in the time between payment, and not paying your drivers is never a good business repeat. 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 turn to outside backing. The following are some choices trucking companies to consider:
Asset-Based Lending
Also known as factoring, this options refers to the process 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 amount of the sale, customer gets 80-90% of this cash back immediately from the invoices. 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, along with the cost is frequently 4-5% monthly with an effective annual fee typically between 18-30%.
Bank Loans
Though in order to find come by, bank loans are usually the cheapest way of financing. Mortgage loan process involves an application and athleanx workout review the company’s creditworthiness and financial track record. Small companies especially are more likely to be rejected for loans, although exceptions do be available.
After approval, fund disbursement usually takes about 30-90 days to reach a trucking company’s banking. This form of funding is best for trucking outfits by using a great credit history and do not require the money immediately.
Cash-Advances
Cash advances take place when a company receives a loan sum from your local neighborhood lender. The corporate pays loan provider back with percentages from their monthly card receipts before the loan (plus a predetermined rate) is repaid. There are legal limits to the rates, and so they also cannot be changed retroactively. The help cash advances is immediate cash- occasion 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 a much smaller amount of this time and have limited financing options. Costly is usually 20% or more.
Lease-Back
A trucking company could sell property, plant, and/or equipment, and simultaneously leases it back for cash money.
It ideal for trucking companies with valuable plant or equipment assets which might be underutilized, along with the cost is monthly lease payments additionally, the depreciation and tax burdens of gadget.
Choices, Choices
Every trucking company is unique, however it is up to them to find funding solutions that meet their individual needs. Being informed on all options is initial step toward finding a suitable cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
