What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is really important 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 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 controversy. But for small to mid-size companies operating on a strict budget, it might stop being an option. Expenses with regard to example payroll and gas calculate in the time between payment, and not paying your drivers is never a good business put into practice. 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 financing. The following are some options for 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 centered on the creditworthiness of the trucking company’s customers.
At the time period of the sale, customer gets 80-90% of this cash back immediately from the statements. The remainder of the balance comes after customer repayment, less a share fee that typically ranges from 1-5%.
This option is best for B2B companies that cannot afford to wait for payment, and the cost usually 4-5% monthly with an impressive annual pace typically between 18-30%.
Bank Loans
Though difficult to come by, bank loans are these cheapest form of financing. Mortgage loan process involves an application and breakdown of the company’s creditworthiness and financial history. Small companies especially can be refused for loans, although exceptions do be around.
After approval, fund disbursement usually takes about 30-90 days to reach a trucking company’s savings. This form of funding is better for trucking outfits by using a great credit record and don’t require the money immediately.
Cash-Advances
Cash advances take place when a company receives funding sum from a lender. The organization pays the lending company back with percentages from their monthly card receipts prior to loan (plus a predetermined rate) is repaid. There are legal limits to the rates, and they cannot be changed retroactively. The advantage of cash advances is immediate cash- can be the fastest method for obtaining cash without likely to a loan shark.
This financing method is better for trucking companies who require immediate cash for any amount of one’s time and have limited financing options. Will not find is usually 20% or even more.
Lease-Back
A trucking company may wish to sell property, plant, and/or equipment, and simultaneously leases it back for moola.
It is better for trucking companies with valuable plant or equipment assets which usually underutilized, and the cost is monthly lease payments not to mention the depreciation and tax burdens of tools.
Choices, Choices
Every trucking company is unique, and in addition it is nearly them to search out funding solutions that meet their individual needs. Being informed on all your options is one step toward finding the right cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
