If your transportation firm requires cash flow, selecting the right kind of financing is essential. All financing is similar, and money is money’ are just some of the myths floating around this industry, nonetheless, selecting the wrong kind funding for your business can be extremely detrimental.
Freight factoring is one choice you may consider for cash flow. Freight Factoring enables trucking firms to receive quick cash flow for work completed.
Cash flow is an essential factor in each business. Therefore, the transportation companies are no different. There are several benefits for using transportation freight factoring services.
Freight brokers, truck owners, and fleet owners all can gain the benefits of freight factoring, a financing technique which enables a firm to access its resources and boost their cash flow.
This could be an excellent choice for small (e.g. small truck fleets) to medium sized businesses which are bringing in capital, but just not quick enough to manage with all the costs of running a business.
Larger companies use it as well to uphold their efficiency. Despite the size your business is, there is a great chance that freight factoring services could help.
Here are some of the benefits of using this kind of financing to assist you to figure out if it is a viable choice for your small truck fleets to get the money it requires.
1. Works with fuel cards
Freight Factoring companies essentially work with fuel card providers, enabling them to provide you additional convenience. Fuel advances, fuel discounts, and long funding hours are just a few of the primary benefits you may find.
2. High initial advances
Many factoring firms offer carriers with huge advances. They usually advance at least 90 percent of the invoices, and mostly the advance can reach 95 percent. Numerous programs also include fuel cards or fuel advances.
3. Take on more loads
Freight factoring services can assist to boost your cash flow and enables you to take on extra loads and new clients.
Since you are getting the equivalent of the cash advance from the factoring firm you select to work with, you’ll have the funds required to pay extra costs such as driver pay, fuel, insurance and even the equipment payments.
4. Flexibility
The ultimate advantage of using freight factoring services to assist in funding your transportation business is that the financing line can increase along the side of your revenues.
Though more traditional loans (or the lines of credit) only work for a specified amount, a factoring line can grow if your customers meet the criteria necessary for your factoring company.
5. Quick approvals
Factoring clients often get approved within only one business day of completing the application package. In most cases, it can be implemented and even funded in only a couple days. Therefore, freight factoring services are typically used to manage any cash flow emergencies.
Conclusion
Freight factoring services can most definitely solve the short-term cash flow challenge, but can also work for a more long-term use.
This kind of funding can allow you take on new customers and more business simply since you do not have to wait nearly 45 days for your customers to pay their invoices.
The factoring line can increase along the side of the growth of your company that’s a great feature which many other kinds of funding do not offer.