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 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 problems. But for small to mid-size companies operating on a strict budget, it might halt an option. Expenses like payroll and gas sum up 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 show 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 difficult . 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 time of the sale, the client gets 80-90% for this cash back immediately from the bills. The remainder of the balance comes after customer repayment, less a share fee that typically ranges from 1-5%.
This choices are best for B2B companies 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 these cheapest form of financing. The borrowed funds process involves an application and breakdown of the company’s creditworthiness and financial reports. Small companies especially tend to be turned down for loans, although exceptions do live.
After approval, fund disbursement usually takes about 30-90 days to reach a trucking company’s banking. This form of funding is the for trucking outfits having a great credit record and have no need for the money immediately.
Cash-Advances
Cash advances take place when a company receives a loan sum during a lender. Business pays the lender back with percentages associated with their monthly card receipts up to the loan (plus a predetermined rate) is repaid. Happen to be legal limits to the rates, and so they also cannot be changed retroactively. The advantage of cash advances is immediate cash- is certainly the fastest method for obtaining cash without in order to a loan shark.
This financing method ideal for trucking companies who need immediate cash for a short amount of time and have limited financing options. The cost is usually 20% or older.
Lease-Back
A trucking company could 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 have been underutilized, and the cost is monthly lease payments as well as the depreciation and tax burdens of equipment.
Choices, Choices
Every trucking company is unique, and it is nearly them to find funding solutions that meet their individual needs. Being informed on all the choices is the first step toward finding the right cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
