What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is really important 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 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 problems. But for small to mid-size companies operating on a tight budget, it might stop an option. Expenses since payroll and gas come 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 it is a recipe for financial hardship.
Therefore, trucking companies often have flip to outside financing. The following are some methods 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 primarily based on the creditworthiness of the trucking company’s customers.
At the time period of the sale, the client gets 80-90% of your cash back immediately from the invoices. 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 businesses that cannot manage to wait for payment, as well as the cost is frequently 4-5% monthly with a powerful annual fee typically between 18-30%.
Bank Loans
Though in order to come by, bank loans are most of the cheapest way of financing. Mortgage loan process involves an application and overview of the company’s creditworthiness and financial reports. Small companies especially possess a be thrown to the wolves for loans, although exceptions do live.
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 having a great credit report . and don’t require the money immediately.
Cash-Advances
Cash advances take place when an organization receives funding sum from a lender. Business pays loan provider back with percentages from their monthly card receipts until the loan (plus a predetermined rate) is repaid. Undoubtedly are a legal limits to the rates, and they cannot be changed retroactively. The advantage of cash advances is immediate cash- is certainly 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 any amount your own time and have limited financing options. Will not find is usually 20% if not more.
Lease-Back
A trucking company might want to sell property, plant, and/or equipment, and simultaneously leases it back for cash money.
It very best for trucking companies with valuable plant or equipment assets which might be underutilized, as well as the cost is monthly lease payments plus the depreciation and tax burdens of gadget.
Choices, Choices
Every trucking company is unique, and it is almost them to locate funding solutions that meet their individual needs. Being informed on all your options is the first step toward finding a suitable cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
