Bankruptcies in the United States rose from 24,7097 companies in the first quarter of 2016 to 25, 227 companies in the second quarter of 2016. One of the reasons that lead to the increase in bankruptcies in companies was the cash flow crisis as a result of limited funds. This made it hard for many firms to meet their operating and production costs hence going under. Nevertheless, companies can still sort out the issue of cashflow early enough to prevent premature liquidation. This is through taking advantage of the invoice factoring service. It is a kind of accounts receivable funding that transforms unpaid invoices due in 90 days into instant cash for businesses. The business factoring companies will help your business bridge invoice payment gaps using upfront payments of up to 90% of the initial invoice. Therefore, you are able to receive the payments within a reasonable period to continue funding the necessary operations in your business.
One industry where invoice factoring continues to become popular is the transportation industry. At least 12 million rail cars, vessels, locomotives, and trucks move goods over the transportation network. As a result, this sector has become home to a lot of businesses such as trucking companies, where the trucking factoring service has proven to be essential in keeping those firms afloat. However, before you seek any advance business capital such as the truck factoring service, they are some crucial factors you need to put into consideration. The increasing number of freight factoring companies might be a blessing in disguise in some instances if you are not careful. You must ensure you are working with a reliable freight broker factoring program so that your invoices can be paid early enough to avoid bearing the burden of bad debts and limited cash flow.
About Trucking Factoring
Trucking factoring service is not only popular but also an important financing option in the transportation business. Trucking companies can easily receive payments for their unpaid freight invoices without having to wait for customers to pay them. The truck factoring companies will pay up to 90% of the unpaid invoice using instant cash, and then expect payment from your clients.
However, you need to ensure you work with a trucking factoring company that will provide you with reasonable terms and conditions. The capital credit factoring company should agree to a considerable credit limit. With that, you can submit your unpaid freight bills to the factoring company and expect payments as agreed.
Benefits of Truck Factoring
Immediate Access To Cash
With freight factoring, you can receive payments for your invoices within 24 hours. This gives you instant cash that you can plough back into your business. Therefore, you can maintain enough cash flow in your company enabling it to continue with its operations without any disruptions due to limited funds.
Avoiding Bad Debts
Once you receive payment of your freight bills, the factoring company will be paid by your customers. The burden of you waiting for customers to pay you after transporting their goods will be lifted. It will be upon the factoring companies to attempt to wait for 30 to 60 days for the customers to pay. Therefore, you avoid ending up with bad debts, whereby clients have not paid for the transportation services offered and those debts are no longer collectable.
Enhanced Business Growth
The trucking factoring service provides you with instant cash which you can use to not only run the operations of your business but also expand it. With adequate cash flow, you can invest in new projects such as acquiring new trucks and employing more drivers to reduce lead time. This ensures you can serve a larger customer base thus generating more revenue for your company.
Factoring financing has helped in keeping businesses in operations regardless of the harsh economic times. Companies can receive advance payments for their unpaid invoices, therefore, have the funds to continue with productivity. For trucking companies, the hassle of having to wait for customers to pay them is now becoming passé. With the trucking factoring service, you can receive up to 90% payment of your unpaid freight bills.