What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is vitally important to the health on 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 within 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 huge concern. But for small to mid-size companies operating on a strong budget, it might ‘t be an option. Expenses since payroll and gas add up 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 is definitely a recipe for financial hardship.
Therefore, trucking companies often have flip to outside a mortgage. 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 is based 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 receipts. The remainder of the balance comes after customer repayment, less a portion fee that typically ranges from 1-5%.
This choices best for B2B companies that cannot afford to wait for payment, and also the cost usually 4-5% monthly with an effective annual rate typically between 18-30%.
Bank Loans
Though tough to come by, bank loans are most of the cheapest involving financing. The borrowed funds process involves an application and overview of the company’s creditworthiness and financial history. Small companies especially are more likely to be denied for loans, although exceptions do live.
After approval, fund disbursement usually takes about 30-90 days attain a trucking company’s financial institution. This form of funding is the for trucking outfits along with a great credit report . and do not require the money immediately.
Cash-Advances
Cash advances take place when an organization receives a loan sum from a lender. Business pays the lender back with percentages regarding their monthly card receipts just before loan (plus a predetermined rate) is repaid. There are legal limits to the rates, and also cannot be changed retroactively. The advantage of cash advances is immediate cash- can be the fastest method for obtaining cash without in order to a loan shark.
This financing method ideal for trucking companies who require immediate cash for any amount of this time and have limited financing options. Will not find is usually 20% and up.
Lease-Back
A trucking company might want to sell property, plant, and/or equipment, and simultaneously leases it back for cash.
It is best for trucking companies with valuable plant or equipment assets that are underutilized, along with the cost is monthly lease payments additionally, the depreciation and tax burdens of resources.
Choices, Choices
Every trucking company is unique, and it is up to them inside your funding solutions that meet their individual needs. Being informed on all the choices is customers step toward finding a worthwhile cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
