What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is really 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 in the 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 not be an option. Expenses like payroll and gas sum up in the time between payment, and not paying your drivers is never a good business repeat. 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 to turn to outside backing. The following are some methods trucking companies to consider:
Asset-Based Lending
Also known as factoring, this options refers to carpet 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 duration of the sale, customer gets 80-90% of the 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 firms that cannot manage to wait for payment, and also the cost is 4-5% monthly with a healthy annual pace typically between 18-30%.
Bank Loans
Though in order to find come by, bank loans are these cheapest way of financing. Mortgage process involves an application and athleanx workout review the company’s creditworthiness and financial history. Small companies especially will usually be thrown to the wolves for loans, although exceptions do be available.
After approval, fund disbursement usually takes about 30-90 days to reach a trucking company’s savings. This form of funding ideal for for trucking outfits by using a great credit history and don’t require the money immediately.
Cash-Advances
Cash advances take place when a company receives funding sum from the lender. The company pays financial institution back with percentages of that monthly card receipts prior to loan (plus a predetermined rate) is repaid. Undoubtedly are a legal limits to the rates, and they will cannot be changed retroactively. The advantage of cash advances is immediate cash- can be the fastest method for obtaining cash without likely to a loan shark.
This financing method is best for trucking companies who require immediate cash for a short amount of this time and have limited financing options. Cost of is usually 20% and up.
Lease-Back
A trucking company could sell property, plant, and/or equipment, and simultaneously leases it back for cash money.
It ideal for trucking companies with valuable plant or equipment assets that are underutilized, and the cost is monthly lease payments in addition to depreciation and tax burdens of gadget.
Choices, Choices
Every trucking company is unique, and in addition it is almost them to locate funding solutions that meet their individual needs. Being informed on all your options is the first step toward finding a suitable cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
