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 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 decent budget, it might stop being an option. Expenses regarding payroll and gas calculate in the time between payment, and not paying your drivers is never a good business rehearsal. 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 a mortgage. The following are some strategies for trucking companies to consider:
Asset-Based Lending
Also known as factoring, this options refers to difficult . 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 time period of the sale, the client gets 80-90% of your 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 firms that cannot afford to wait for payment, as well as the cost is usually 4-5% monthly with annual interest rate typically between 18-30%.
Bank Loans
Though tough to come by, bank loans are usually the cheapest associated with financing. The borrowed funds process involves an application and athleanx workout review the company’s creditworthiness and financial history. Small companies especially are more likely to be thrown to the wolves for loans, although exceptions do exist.
After approval, fund disbursement usually takes about 30-90 days to reach a trucking company’s life’s savings. This form of funding is the for trucking outfits using a great credit history and don’t need the money immediately.
Cash-Advances
Cash advances take place when a small business receives a loan sum during a lender. The company pays the lender back with percentages associated with their monthly card receipts prior to loan (plus a predetermined rate) is repaid. Tend to be two legal limits to the rates, and also cannot be changed retroactively. The advantage of cash advances is immediate cash- the time the fastest method for obtaining cash without likely to a loan shark.
This financing method ideal for trucking companies who require immediate cash for regarding 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 choose to sell property, plant, and/or equipment, and simultaneously leases it back for moola.
It ideal for trucking companies with valuable plant or equipment assets usually are underutilized, as well as the cost is monthly lease payments as well as the depreciation and tax burdens of resources.
Choices, Choices
Every trucking company is unique, and it is well over them inside your funding solutions that meet their individual needs. Being informed on all 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
