Do you want to fast-track your trucking business?
The combination of sluggish cash flow and tedious invoice tracking can get you stressed out, especially at the early stages of your business. Even if you think you can endure these burdens, they will eventually take their toll on your operational decisions. Entering a partnership with a freight invoice factoring company can help you avoid pitfalls in your trucking business.
But what is a factoring company?
These companies specialize in providing invoice factoring services. They purchase your outstanding invoices allowing you to improve your cash flow and keep your business going. They’ll basically handle the accounts receivable for you. It’s a better option than having to wait for 30 days or longer to receive payments for delivering loads.
Still on the fence if this is the right move for you? Here are five reasons you should consider why partnering with a freight factoring company is a great option.
1. Swift Cash Flow
Whether you’re just starting out or have been in the trucking business for some time, you need immediate cash flow to keep your business running smoothly or quickly expand it. The negative effects of fuel price fluctuations and the sudden need for truck repairs are cushioned by consistent cash flow.
It’s the same with account receivables. Waiting for at least 30 days to receive your payments can hamper your business throughput. If you need to get paid fast, invoice funding companiescan give you the payment instead (minus some fees) while they collect the invoice for you.
2. Haul More Loads
The benefits of a consistent cash flow can steamroll into having more loads. You’ll be able to take on more than usual since you’ll be able to pay out your expense quickly.
For example, you can invest in a new truck quickly, rather than having to wait for months to save up for the funds to purchase. Hiring more drivers, having money to fuel up your new trucks, and even have some saved for emergency repairs, can all help you grow your trucking business at a faster rate.
3. Avoid Bad Debt
Business loans are well and good but loans are still debts. You’ll still need to pay it out in the future, and unforeseen events can somehow make you miss payments. As you loan bloats, you end up losing money in the long run.
Invoice funding companies can help you avoid having to get business loans at all. You get paid for your services immediately for a small fee. This approach will allow you to grow your business without having to incur debts.
Likewise, you’re also protected from bad debts from your brokers. In extreme cases, you won’t have to worry if a broker can’t pay because they went out of business.
4. Quick Expansion Opportunities
Growing your business can be quite difficult if you don’t have enough cash on hand. It becomes even harder if the money that comes just ends up being redirected to loan payments.
You can quickly expand your business if you don’t have debt and if cash flow is immediate. You’ll have money to hire more drivers, maintain your trucks regularly, and pay for gas. Invoice funding companies can help bridge the gap between accounts payable and accounts receivable by up to 90% of the original invoice.
5. Optimal Invoice Tracking
Invoicing clients, collecting payments, and the very nature of keeping track of both of these can be very stressful. When you see a list of account receivables that would take up to 90 days before they’re even collected, you’ll get frustrated. It’s easy to get frustrated seeing a list of account receivables that would take up to 90 days before their collected.
Invoice funding companies can spare you from this hassle. You won’t even have to take the burden of making sure the client pays up. Instead, you get paid up front and get to focus more on your business operation and expansion.
Invoice Factoring is a Good Choice for Freight Trucking Companies
These five reasons are more than enough to obtain factoring services for trucking. Choosing to partner with business factoring companies can help you maintain a successful trucking business going.