Can Factoring for Truckers Help You?
Have you thought about using trucking factoring as a way to boost your cash flow? Waiting for payment when you have already delivered the load can be a tedious situation in which to be. As a trucker, you are out there on the road. Sometimes you’re there for weeks on end. You have bills to pay and other needs that could certainly benefit from a quick cash boost.
Whether you need a fill-up on fuel or food to make it through the next week, a little extra cash on hand could really help out. Sometimes it not easy to choose between two or more different things, especially when you need them all and the burden gets harder to bear with each need that arises.
At this point, it is probably fair to say that you could likely benefit from factoring for truckers. Also known in many circles as “freight factoring,” it is a way to get more cash on hand when you need it most. Especially with all those things that just can’t wait for a slow-paying invoice.
How Truckers Recieve Payment
There are many ways that you, as a professional driver, can receive payment for your work. There are many elements at play when it comes to payment. This includes whether or not you drive local, or over the road; as well as what kind of employment agreement or contracts are in place.
Local drivers are usually on hourly pay, much like any other job. You punch a time clock, put in your hours and get a check every one to two weeks. Truckers that tend to carry longer loads, especially those of you going across the country, get payment in many other ways, all depending on the companies for which you work.
Some of the ways in which one can earn payment for longer loads include by the mile, by the load, by the trip, by percentage or by weight. Just as there are many ways for you to be paid, there are nearly just as many ways that you can receive money once services are rendered.
While you can almost always opt for a standard paper check, this is, by far, the slowest payment method of all. But many can also now receive payment via electronic payment, electronic funds transfer to your bank, money that builds onto a fuel card, or some other payment card such as Comdata or T-Chek Cards (T-Card).
Plus, not all your cash has to go into anyone’s preferred payment method. Companies tend to be lenient about splitting the money up upon request. For instance, as a driver, you might want half of your pay going onto your card. But then you want the other half going into a bank account your spouse has access to. Still, others choose for a portion to go onto their personal card, a portion of their fuel account, and yet another portion going to a savings account or retirement plan.
Slow Payments and Cash Flow
Most truckers greatly appreciate and benefit from “quick pay.” As you would assume, this signifies that invoices are paid more quickly than most, which keeps your cash flow in the positive. Since loads are not carried and delivered without some critical business expenses, it is important to receive your cash as quickly as possible so that you are not footing the bill completely out of pocket.
The problem is, however, that most invoices carry an agreement that will get money within 30 to 60 days. While this works out very well for the customer who receives the trade credit, and it certainly makes their cash flow situation much better, it does nothing to help you with your expenses.
Well-established trucking companies and some owner-operators are in a much better position so that slow cash flow does not create a significant number of problems. Being in business for a while, it is easier to build up a bit of a cushion to help during these times when cash flow moves more slowly.
For a new or growing company, however, it can create some serious issues. This includes becoming stranded on the road due to lack of cash for fuel, truck repairs, food, medication, and the list goes on.
How to Work Around Slow Payments
There are several ways that you can avoid running into problems with slow cash flow while you are out on the road. One of them is trucking factoring.
When you know upfront that invoices are going to be slow-coming, it is often possible to turn to factoring, or selling those invoices, for immediate or near immediate cash flow. It is an option that more and more truckers seem to be turning to with success. You can make it work for you, as well.
Usually, one of the requirements to procure funding through factoring in a situation such as this is that your customer has good credit. Since it is their invoices that are being purchased, that is usually the first thing that is taken into consideration.
With factoring, you can usually have cash at your disposal within 24-48 hours. This can really take a load off, especially if you are on a long haul before getting home. Once we have purchased the invoice from you, we will take care of billing the customer for the full payment. After the final payment is received, we simply send you any remainder, less our fee. You can start the trucking factoring process as soon as you book a load.
Contact First Capital for Trucking Factoring
Call us today at 888-565-6692 or contact us online. We will get the information we need from you, answer any questions you may have, and thoroughly explain the entire process. Hopefully, as you ease your mind, we will be able to help you take care of your slow cash flow situation and get you on your way.
How Trucking Factoring Can Help Your Cashflow | First Capital Business Finance, USA