What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is truly essential to the health of 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 problem. But for small to mid-size companies operating on a strong budget, it might halt an option. Expenses such as payroll and gas provide in the time between payment, and not paying your drivers is never a good business practice. Add to that rising fuel costs, delays due to traffic congestion, driver shortages and new regulations, and is actually not a recipe for financial hardship.
Therefore, trucking companies often have flip 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 carpet by which businesses sell their accounts receivables to a factoring company. Approval for factoring draws on on the creditworthiness of the trucking company’s customers.
At the duration of the sale, the client gets 80-90% for this 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 choice is best for B2B businesses that cannot manage to wait for payment, along with the cost is 4-5% monthly with annual interest rate typically between 18-30%.
Bank Loans
Though in order to come by, bank loans are usually the cheapest involving financing. The borrowed funds process involves an application and athleanx workout review the company’s creditworthiness and financial story. Small companies especially will usually be turned down for loans, although exceptions do be available.
After approval, fund disbursement usually takes about 30-90 days to achieve a trucking company’s banking. This form of funding is best for trucking outfits along with a great credit history and don’t want the money immediately.
Cash-Advances
Cash advances take place when a small-business receives an advance sum from our lender. They pays financial institution back with percentages of that monthly card receipts before the loan (plus a predetermined rate) is repaid. Undoubtedly are a legal limits to the rates, and also cannot be changed retroactively. The benefits of cash advances is immediate cash- the time the fastest method for obtaining cash without in order to be a loan shark.
This financing method ideal for trucking companies who need immediate cash for the short amount of time and have limited financing options. Zox pro training system is usually 20% or more.
Lease-Back
A trucking company may want to sell property, plant, and/or equipment, and simultaneously leases it back for cash.
It is best for trucking companies with valuable plant or equipment assets which might be underutilized, as well as 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 well over them to find funding solutions that meet their individual needs. Being informed on all the choices 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
