What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is truly essential to the health of 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 from 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 controversy. But for small to mid-size companies operating on a decent budget, it might not be an option. Expenses since payroll and gas provide in the time between payment, and not paying your drivers is never a good business 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 flip to outside financing. 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 use of the sale, customer gets 80-90% for this cash back immediately from the debts. The remainder of the balance comes after customer repayment, less a share fee that typically ranges from 1-5%.
This choices best for B2B firms that cannot afford to wait for payment, along with the cost is usually 4-5% monthly with an effective annual interest rate typically between 18-30%.
Bank Loans
Though difficult to come by, bank loans are an cheapest associated with financing. Mortgage loan process involves an application and athleanx workout review the company’s creditworthiness and financial reports. Small companies especially are more likely to be thrown to the wolves for loans, although exceptions do be.
After approval, fund disbursement usually takes about 30-90 days achieve a trucking company’s financial institution. This form of funding is better for trucking outfits using a great credit ratings and have no need for the money immediately.
Cash-Advances
Cash advances take place when an organization receives funding sum during a lender. The corporate pays the lending company back with percentages of their monthly card receipts prior to loan (plus a predetermined rate) is repaid. Happen to be legal limits to the rates, and also cannot be changed retroactively. The help cash advances is immediate cash- occasion the fastest method for obtaining cash without gonna be a loan shark.
This financing method is better for trucking companies who need immediate cash for the short amount of this time and have limited financing options. Costly is usually 20% and up.
Lease-Back
A trucking company may wish to sell property, plant, and/or equipment, and simultaneously leases it back for earnings.
It is better for trucking companies with valuable plant or equipment assets which might be underutilized, and also the cost is monthly lease payments additionally, the depreciation and tax burdens of machines.
Choices, Choices
Every trucking company is unique, that’s why it is almost them inside your funding solutions that meet their individual needs. Being informed on all your options is begin step toward finding a fitting cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
