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There are few businesses that are as cash flow intensive as a
trucking company. The list of ongoing expenses can be endless
and can easily overwhelm small and medium size trucking
companies. There are fuel expenses, truck repairs, rentals and
salaries. Although most trucking companies are very profitable,
few can afford to wait the usual 30 to 60 days it takes to get
paid for their freight bills.
Unless the trucking company has a significant cash cushion in
the bank, waiting 30 to 60 days to get paid can cause serious
problems. It can jeopardize existing operations and furthermore,
it can prevent you from growing your business. The only way to
get out of the cash flow rut is to find a way to capitalize on
your slow paying invoices. The best tool to do this for a
trucking company is called freight bill factoring.
Freight bill factoring enables the trucking
company to get paid for their freight bills within a day of
invoicing, eliminating the usual 30 to 60 day wait. With a
factoring agreement in place, you can stabilize your company's
cash flow and eliminate the stress of not knowing when you'll be
paid. Since freight bill factoring eliminates the worries of
waiting for your payment, you will be free to focus on what you
do best: running your business.
Who qualifies for freight bill factoring?
Most small and mid size trucking and transportation companies
should qualify for factoring. There are two main requirements to
qualify. First, your company must do business with reputable
clients or freight brokers. Second, your company must be free of
tax problems. If you meet these two criteria, more often than
not you will qualify. Most factoring companies are comfortable
working with new businesses, so you should be able to qualify
even if your company is a start up. Best of all, you can get a
financing agreement in place within a few days.
What services does a factoring company provide?
The main benefit of working with a freight bill factor is that
this will provide you with advanced funds on your freight bills.
That means you can get paid very quickly after invoicing.
However, most factors will also provide you with collections and
credit protection as part of their services. This enables you to
focus your energies and your staff on growing your company
rather than on expensive and time consuming back office work.
Factoring for growth
Although many truck operators initially obtain factoring financing to
avert the problems of dealing with slow payers, eventually most
owners realize that factoring can help them grow their business.
It eliminates their biggest worry by ensuring that invoices get
paid immediately, freeing up cash and enabling the owner to grow
the business.
Copyright (c) 2009-2015 - Commercial Capital LLC - All rights
reserved. This article may be reprinted provided it is not
modified and all links are kept intact
About the author:
About Invoice Factoring Group
Invoice Factoring Group
(http://factoring.qlfs.com)
can provide you with a free trucking company / freight bill factoring quote.
Marco Terry, its president, can be reached at (866) 730 1922.
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