What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is truly essential 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 the 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 good budget, it might stop being an option. Expenses like payroll and gas come 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 a recipe for financial hardship.
Therefore, trucking companies often have to show to outside financing. The following are some methods trucking companies to consider:
Asset-Based Lending
Also known as factoring, this options refers to implies 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 receipts. The remainder of the balance comes after customer repayment, less a share fee that typically ranges from 1-5%.
This choices are best for B2B companies that cannot manage to wait for payment, and the cost is usually 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 form of financing. The loan process involves an application and analysis of the company’s creditworthiness and financial reports. Small companies especially can be thrown to the wolves for loans, although exceptions do be.
After approval, fund disbursement usually takes about 30-90 days attain a trucking company’s savings. This form of funding ideal for for trucking outfits having a great credit ratings and have no need for the money immediately.
Cash-Advances
Cash advances take place when business receives funding sum from the lender. The organization pays loan provider back with percentages from their monthly card receipts before the loan (plus a predetermined rate) is repaid. Tend to be two legal limits to the rates, and they will cannot be changed retroactively. The help cash advances is immediate cash- is certainly the fastest method for obtaining cash without in order to a loan shark.
This financing method very best for trucking companies who require immediate cash for a short amount of this time and have limited financing options. Costly is usually 20% and up.
Lease-Back
A trucking company could sell property, plant, and/or equipment, and simultaneously leases it back for moola.
It is best for trucking companies with valuable plant or equipment assets usually are underutilized, and also the cost is monthly lease payments plus the depreciation and tax burdens of gadget.
Choices, Choices
Every trucking company is unique, make use of is close to them to search out funding solutions that meet their individual needs. Being informed on all options is one step toward finding a fitting cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
