subject: Freight Factoring: The Answer To Money Matters Of The Trucking Industry [print this page] The trucking industry is among the most cash strapped businesses and high interest rates most banks and lending companies ask, many of these trucking firms are looking for financial assistance from freight factoring firms. Because there are a lot of bills to be paid, from drivers waiting for their salary and equipment to be maintained to fuels to be expended, there is a regular need for these trucking firms to get steady financing. Freight factoring is the right solution they could have to answer this problem. Once cash flow is managed properly, trucking companies can eventually rise to profitability.
Fast and Easy Financing with Freight Factoring
One of the toughest challenges any trucking company faces is the freight bill that constantly comes their way, they obligation they need to face whether or not they have enough money. In return, trucking owners are always stressed on how to finance the unending bills they have to settle. Indeed, freight bills are paid by owners in 60 days time. One of the answers trucking owners and managers think of for this problem is to get financing from a bank or lending company in order to solve the problem. But banks seldom finance businesses unless they have three years of audited finances showing steady profitability. A trucking company should be established enough and should be in the business for quite some time already, least, it will not get the financial backing from the bank. Good thing there is freight factoring to help these financial strapped firms stay in sync.
Freight Factoring Helps Straighten Up a Trucking Firms Finances
Freight factoring helps trucking businesses to convert their slow paying bills into cold, hard cash by selling their invoice to the factoring company. This is the easiest solution possible for immediate financing that offers instant money to trucking firms keep their operations running and their bills paid. Compared to strict institutional financing, the instant money coming from freight factoring helps a company grow in sales thanks to its flexible terms that enable trucking firms to meet the demands of the market.
How Freight Factoring Works
Freight factoringworks in simple and easy terms. The factoring company purchases the invoice with the money to be released in two installments. The first installment is the cash advance, which happens when the factoring company releases 90 percent of the amount in the invoice. The remaining 10 percent, less the fee is released to the trucking company once the invoice is paid.
