What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is vitally important to the health for 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 huge concern. But for small to mid-size companies operating on a good budget, it might not be an option. Expenses like payroll and gas provide 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 a recipe for financial hardship.
Therefore, trucking companies often have to turn to outside funding. The following are some options for 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 centered on the creditworthiness of the trucking company’s customers.
At the amount of the sale, the client gets 80-90% of your cash back immediately from the debts. The remainder of the balance comes after customer repayment, less a percentage fee that typically ranges from 1-5%.
This choices are best for B2B firms that cannot manage to wait for payment, as well as the cost is usually 4-5% monthly with an effective annual rate typically between 18-30%.
Bank Loans
Though hard to come by, bank loans are an cheapest involving financing. Mortgage process involves an application and review of the company’s creditworthiness and financial track record. Small companies especially tend to 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 financial institution. This form of funding ideal for for trucking outfits using a great credit ratings and don’t need the money immediately.
Cash-Advances
Cash advances take place when a company receives a loan sum from a lender. They pays the lender back with percentages from their monthly card receipts just before loan (plus a predetermined rate) is repaid. There are a bunch legal limits to the rates, and so they also cannot be changed retroactively. The benefits of cash advances is immediate cash- is certainly the fastest method for obtaining cash without likely to a loan shark.
This financing method very best for trucking companies who need immediate cash for any amount your own 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 cash.
It ideal for trucking companies with valuable plant or equipment assets which usually underutilized, along with the cost is monthly lease payments as well as the depreciation and tax burdens of machines.
Choices, Choices
Every trucking company is unique, and it is close to them to locate funding solutions that meet their individual needs. Being informed on all your options is initial step toward finding a sufficient cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
