Are you planning to invest in a transportation company? The success of this investment relies on your truck and the ability to maintain a strong financial flow. As you know, the top transportation factoring companies are the ideal financing option for your firm. But how do they do this?
A factoring company can help your trucking business bridge invoice payments gaps by offering advance business capital. The amount you receive can be as high as 90 percent of the invoice amount.
Engaging top transportation factoring companies allow you to get started right away. It eliminates the need to look for bank loans that taint your credit history. In fact, many savvy truckers recommend new transportation companies to partner with factoring companies. Doing this ensures you’re always set and ready whenever you need it.
So why is freight factoring services a big deal in the transportation industry? How does it benefit your transportation business? Here are the primary reasons why you need a work with top transportation factoring companies in the industry.
1. Trucking Factoring Services are Ideal for New Business
When starting, you need money for fuel and other expenses. Sadly, you’ll need all this money before getting any payment.
As a new transportation firm, you don’t have any credit history. Therefore getting loans from banks is nearly impossible. The trucking factoring services eliminate the need for bank loans by offering advance payment to your invoice. It is your hard-earned cash, made available early.
2. A Freight Invoice Factoring Company Gives You Cash to Manage Demand
Business is booming. You need money to hire more drivers and rent or buy trucks to match demand. But there is a problem, you don’t have money.
Top transportation factoring companies can help you solve this problem. Rather than waiting on long invoice payment cycles, use the cash you get from invoice factoring to pay yourself or your drivers. It’s an amazing way to manage growing business demands.
3. Freight Invoice Factoring is Affordable
In comparison to other forms of business financing, invoice factoring is highly affordable. At first, top transportation factoring companies do not charge any interest for their service. Instead, you only pay a factoring fee that’s based on the invoice amount.
The good thing is, you’ll negotiate and agree on the fee with your factoring service. You’ll know the amount to pay per invoice, no hidden charges. Plus, you’ll decide the invoices to include.
4. Easier to Qualify for Freight Factoring Services
In credit financing, your credit score as a business or entrepreneur determines whether you qualify or not. It will be hard to get any credit financing if your credit score doesn’t qualify.
On the other hand, top transportation factoring companies use your customer’s credit rating to approve invoices. As long as your clients have a good credit score, you’ll factor the invoices.
5. No Restrictions on Spending
The money you get from your factoring company is yours to spend. You don’t have any restrictions on how to use the money. With factoring, you have total authority on how to spend your money.
Well, this is in direct contrast to the rules of business loans. Here, you don’t have the discretion to spend money on any other project, other than specific needs for which money was borrowed.
6. Business Factoring Promotes Better Credit Control
Invoice factoring saves you the hassle of credit control saving you time and money. For instance, you can accept their payment terms since you do not have to wait for their payments.
The transportation factoring service will handle aspects of credit control on invoices you factor. Such include checking your customer’s credit ratings, collecting pending amounts, and reconciling payments. Undertaking these tasks will cost you more time and money than when working with factoring companies.
When your transportation company is in dire need of cash, the services of freight invoice factoring service can come in handy. It will provide the cash you need to boost your business and enhance growth.