When you’re an owner-driver of a truck or the owner of a fleet, there’s going to be a time when you’ll feel the need for some extra working capital. After all, you make money having your trucks roll through the highways hauling freight for brokers and shippers, and that constant travel can take its toll. And that’s where the factoring companies come in.
What Factoring Companies Can Do for Your Trucking Business
Factoring companies have several ways of helping you in your trucking business, but mainly it’s all about providing you with ready cash as quickly as possible. The financing application process doesn’t take more than a week, and then the factoring begins.
In the factoring process, once you complete a delivery, you provide a copy of the freight bill to the factoring company. The factor then verifies the invoice and you get a large percentage of the value of the invoice in your bank account right away. Some of the best factoring companies offer an advance of more than 90% of the value of the invoice, and you get the money in less than 2 days. The rest of the money goes to you once your customers pay the factor in full, and the factor then takes off its fees before it gives you the rest of the payment.
Factoring isn’t a loan, so it does not affect your credit rating or your balance sheet. So if you’re set on getting a bank loan in the future, you won’t have additional problems because you opted for factoring.
Uses of the Cash Advance
Now that you have money in hand, you can then pay for your fuel costs, and pay for your truck’s proper maintenance. If repairs have to be made, at least you have the money to use right away. If you’re the driver of your own truck, you now have money for meals and incidentals such as motel payments for overnight travel.
And if you’re a fleet owner, you can also use the money to cover payroll and meet other overhead expenses. You can even use the money to expand your business by hiring more drivers or by buying more vehicles.
Find the Best Factoring Company
Your best options for factoring when you own your trucking business is a factor that specializes in the trucking industry. They have the resources to investigate the shipper and brokers that make use of your services, so that there’s no delay in getting your money.
Some of the factors in the industry even offer fuel advances so you’re fully gassed up when you pick up a load. You may also get special fuel cards that give you a significant discount when you refill your gas tank. If you own a trucking fleet, these services can add up to a significant amount in savings.
Consider factoring if you’re in the trucking business. It can help make your operations smoother and enable you to compete with larger carriers. And you can even grow your operations so that you too will have a bigger fleet!