What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is essential 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 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 strong budget, it might stop an option. Expenses regarding payroll and gas sum up in the time between payment, and not paying your drivers is never a good business approach. Add to that rising fuel costs, delays due to traffic congestion, driver shortages and new regulations, and is actually not a recipe for financial hardship.
Therefore, trucking companies often have to show to outside a mortgage. The following are some methods 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 draws on 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 bills. The remainder of the balance comes after customer repayment, less a percentage fee that typically ranges from 1-5%.
This options best for B2B companies that cannot manage to wait for payment, and also the cost is often 4-5% monthly with annual rate typically between 18-30%.
Bank Loans
Though in order to come by, bank loans are usually the cheapest form of financing. The borrowed funds process involves an application and review of the company’s creditworthiness and financial track record. Small companies especially tend to be rejected for loans, although exceptions do be available.
After approval, fund disbursement usually takes about 30-90 days to achieve a trucking company’s bank account. This form of funding is best for trucking outfits by using a great credit record and do not require the money immediately.
Cash-Advances
Cash advances take place when business receives an advance sum from the lender. The company pays financial institution back with percentages from their monthly card receipts up to the loan (plus a predetermined rate) is repaid. There are a bunch legal limits to the rates, which cannot be changed retroactively. The benefits of cash advances is immediate cash- the time 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 a much smaller amount associated with your and have limited financing options. Will not find is usually 20% or more.
Lease-Back
A trucking company may 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 usually underutilized, and the cost is monthly lease payments as well as the depreciation and tax burdens of gadget.
Choices, Choices
Every trucking company is unique, and it is close to them to search out funding solutions that meet their individual needs. Being informed on all the options is one step toward finding a worthwhile cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
