What Truckers Like About Top Trucking Companies
Though often overlooked, the trucking industry is vitally important 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 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 chore. But for small to mid-size companies operating on a good budget, it might ‘t be an option. Expenses such as payroll and gas add 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 actually not 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 duration 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 share fee that typically ranges from 1-5%.
This choices are best for B2B firms that cannot manage to wait for payment, as well as the cost is often 4-5% monthly with a healthy annual interest rate typically between 18-30%.
Bank Loans
Though in order to find come by, bank loans are usually the cheapest type of financing. Mortgage process involves an application and breakdown of the company’s creditworthiness and financial reports. Small companies especially tend to be denied for loans, although exceptions do be.
After approval, fund disbursement usually takes about 30-90 days achieve a trucking company’s savings. This form of funding is better for trucking outfits with a great credit report . and don’t require the money immediately.
Cash-Advances
Cash advances take place when business receives an advance sum from the lender. The organization pays loan provider back with percentages associated with their monthly card receipts until the loan (plus a predetermined rate) is repaid. Tend to be two legal limits to the rates, and also cannot be changed retroactively. The benefit to cash advances is immediate cash- occasion the fastest method for obtaining cash without going to a loan shark.
This financing method is the for trucking companies who require immediate cash for a short amount your own time and have limited financing options. Cost of is usually 20% if not more.
Lease-Back
A trucking company may choose to sell property, plant, and/or equipment, and simultaneously leases it back for cash money.
It is better for trucking companies with valuable plant or equipment assets that are underutilized, along with 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 close to them to discover funding solutions that meet their individual needs. Being informed on all options is customers step toward finding a sufficient cash flow solution.
4 Global Corp
12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018
(305) 912-9444
