If you own a trucking company of any size, you know that financing your business is a critical part of staying in the business year after year. The idea that all financing is the same and will benefit every type of industry, in the same way, is a misconception. Transportation Factoring has numerous benefits to help business owners, Below are just a few!
- Quick approvals. Factoring a freight bill is a process that is often approved quickly, and once approved, you can often turn invoices around the same day you deliver, allowing fast access to much-needed funds. In many cases, freight factoring is a perfect solution to addressing a cash flow emergency. If you find you have too little cash on hand to deal with an immediate problem, factoring freight bills could be a sound financial tactic.
- Taking on more business. Factoring improves cash flow, thereby, allowing you to take on new customers and bigger orders from pre-existing ones. Because factoring freight bills allow the equivalent of quick payment for an outstanding invoice, you can use those funds to pay the expenses necessary to take on more loads.
- Large initial advances. Most transportation factoring companies provide high advances. In many cases, the advance can be as high as 97% of the value of the invoice you are factoring.
- Improve credit quality. Freight factoring companies will offer online tools to check the credit quality of your new and existing customers, which will help better organize and capitalize on your accounts receivable.
- One of the most overlooked advantages of transportation factoring is your line of credit can grow as revenue increases. The more invoices you bring in through good business, the more you can factor them in order to gain immediate funding. This creates a positive snowball effect — the funds enable you to take on more business, that business turns into more invoices, and those invoices can be factored into more funding, creating a positive growth cycle. Very few business-financing options have this type of flexibility.
If your trucking or transportation company needs quick cash upfront to solve a cash flow emergency, or if you’re looking to expand business and need a little bit of financial help, transportation factoring might be the solution you’re looking for. Freight factoring companies can help sustain your business through the tough times so you can keep your eyes on the road ahead. Interested in Freight factoring, Sunbelt is here to answer all of your questions!