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Trucking Companies and Cash Flow: What Are the Potentials?

Though often overlooked, the trucking industry is vitally important to the health within 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 within 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 problems. But for small to mid-size companies operating on a strong budget, it might stop being an option. Expenses regarding 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 it is a recipe for financial hardship.

Therefore, trucking companies often have flip to outside financing. The following are some choices trucking companies to consider:

Asset-Based Lending

Also known as factoring, this options refers to implies by which businesses sell their accounts receivables to a factoring company. Approval for factoring is founded on on the creditworthiness of the trucking company’s customers.

At the use of the sale, customer 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 afford to wait for payment, along with the cost is 4-5% monthly with an impressive annual price typically between 18-30%.

Bank Loans

Though difficult to come by, bank loans are often the cheapest associated with financing. Mortgage process involves an application and analysis of the company’s creditworthiness and financial reports. Small companies especially will usually be turned down for loans, although exceptions do be around.

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 along with a great credit record and don’t need the money immediately.

Cash-Advances

Cash advances take place when a small business receives a loan sum from the lender. They pays the lender back with percentages from their monthly card receipts before the loan (plus a predetermined rate) is repaid. Undoubtedly are a legal limits to the rates, and also cannot be changed retroactively. The benefits of cash advances is immediate cash- can be the fastest method for obtaining cash without going to a loan shark.

This financing method very best for trucking companies who need immediate cash for any amount your own time and have limited financing options. Zox pro training system is usually 20% or more.

Lease-Back

A trucking company could sell property, plant, and/or equipment, and simultaneously leases it back for moola.

It is better for trucking companies with valuable plant or equipment assets which usually underutilized, and the cost is monthly lease payments plus the depreciation and tax burdens of resources.

Choices, Choices

Every trucking company is unique, make use of is up to them to search out funding solutions that meet their individual needs. Being informed on all the options is initial step toward finding a suitable cash flow solution.

4 Global Corp

12963 W Okeechobee Rd suite 4, Hialeah Gardens, FL 33018

(305) 912-9444

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