As a trucking company owner you are very aware that transportation companies very demanding when it comes to cash flow. They must regularly cash in a position to challenge all current expenditure. While the cash comes at a good level, your trucking companies operating like a well oiled machine. But when it began to be a hiccup in the cash flow statement, the well-oiled machine squeaking. And if there is a huge cash flow problems, the teeth to all over the place and the so-called well-oiled machine began creaking.
What is the greatest source of cash flow problems for small and medium-sized trucking company? Slow-paying customers. Customers who take up to 60 days to pay the freight bills. Although large trucking companies can certainly wait – a small trucking company with few power unit usually can not able to wait. As the owner, you need the money and need it now.
Is the solution to turn away slow paying customers? Of course not. That would be business suicide. The solution is to eliminate the wait by financing your freight bills using freight bill factoring.
The concept behind factoring is easy. Factoring companies provide money for your freight bills. Usually within 24 hours or less. You will receive immediate funds while the factoring company wait to be paid. With factoring, you get the money quickly for your slow paying freight bills which allow you to pay drivers, maintenance of the electrical system and buy fuel.
Factoring is very easy to qualify and is very common in the trucking industry. Most trucking company can easily qualify since the main requirements is that they do business with good (albeit slowly) paying customers. This allows you to easily do business with customers that pay in 30 to 90 days and eliminate the stress of having to wait to get paid.
How is freight factoring work? It’s simple:
*1) You deliver the loan and submit copies of the documents to the factoring company
*2) Your factoring company’s progress around 90% of freight bill within 24 hours (10%, the rest is used to the cover billing disputes). You get the money immediately
*3) Once the factoring company is paid by the customer, the remaining 10% (less a small fee) will be rebated to you
As you can see, Factoring eliminate the wait for payment and give you the money you need to run your trucking company.