Stay Afloat In 2017 And Beyond With The Help Of Freight Factoring

Help Of Freight Factoring

2017 has seen some major financial upheavals. According to the US News economics reporter, the ripples caused by the massive financial downturn in 2015 are still being felt, and they may be more wave than ripple, after all. Small and medium businesses in particular are feeling the pinch, but researchers at Fundera Ledger Inc. tell us that inadequate cash flow caused by financial turmoil can cripple a business of any size. In fact, their research shows that the insufficient management of cash flow can be attributed to upwards of 82 percent of the failure rate of small businesses and start-ups.

Anybody in the trucking or transportation industry will tell you that cash flow is the fuel that accelerates business. This is why freight bill factoring is used by trucking companies as a regular, steady part of their financing strategy. Freight factoring saves you time and allows trucking companies to obtain immediate funds and account receivable services in order to operate, maintain, and grow, capitalizing on invoices that won’t actually be paid for 2-3 months. It’s common knowledge that borrowing from a commercial bank or an online lender comes with a series of unnecessary obstacles and pitfalls, so relying on freight bill factoring from a reliable provider allows you to maintain cash flow without incurring additional debt, and keeps your fleet rolling.

Freight bill factoring is a financing method that boils down to selling your invoices to a factoring company, such as Accutrac Capital or a similar factor, for immediate funds. This type of financing is an effective alternative to waiting for customers to pay (which sometimes takes 60 or even 90 days) or to taking out a bank loan.

Because nearly every independently owned company in the trucking industry runs into cash flow problems, freight bill financing is an attractive financing tool. Due to high fuel costs, taxes, vehicle repairs, and other costs transportation businesses are particularly vulnerable to the problems that come with low cash reserves. When companies, in particular trucking companies, operate close to the red line, one unexpected cost can derail your entire business permanently.

Freight bill factoring is a cash advance funding arrangement between your company and a professional factor, allowing you to sell your invoices and receive a lump sum of funding up front. Once the invoice is issued and the delivery is confirmed, the factor advances you funds equal to the value of the invoice, minus3% to be held in reserve, and a small fee. When the invoice is paid in full, the factor rebates you the reserve amount.

Qualification for this kind of receivables factoring is easy because it is largely based on the credit worthiness of your customers, not your personal credit or the financial strength of your business.

Factors like Accutrac Capital provide financial solutions to:

• high growth companies who might not have sufficient working capital
• start up operations or businesses in transition
• companies who can not acquire the funds they need from traditional lenders such as banks
• companies experiencing a lean year
• companies going through a change of ownership

Another point to consider is that freight factoring also helps you keep your balance sheet clean, as factoring is not a loan. Instead, when a factor purchases your invoices it essentially transforms your Accounts Receivable into liquid assets which you can use to build your business, instead of waiting for delayed payments that could negatively affect your credit.

In order to stay afloat as the financial waters continue to churn, consider financing as an option for your trucking business. Whether you have a fleet of three or three hundred, freight factoring can help you manage cash flow, and keep your head above water.