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The trucking industry faces unique challenges in business financing. Hard assets, such as the fleet, depreciate with every mile driven and lending companies just don’t want to hear about all the deliveries you have lined up or have already made. They want cold, hard cash or assets to back up the loans they provide.
Those challenges make it difficult for trucking and freight companies to qualify for traditional banking or business loans. That financing could be vital to keeping the fleet on the road and truckers happily paid especially for the small, independent companies.
That’s where trucking factoring services become important. Factoring companies that specialize in the trucking industry understand the unique challenges of the trucking industry. Not only that, they aren’t offering you a loan. They are advancing you funds that you already have coming your way.
Invoice Factoring Is Not The Same Thing As A Business Loan
Invoice factoring is very different from a traditional loan. Whereas traditional loans require the lending company to evaluate your ability to repay the loan, including what assets you have that can be considered collateral, factoring companies look at your unpaid, completed invoices or Accounts Receivables. In other words, they are more interested in the work you’ve already done and are waiting to get paid on, than what you have on hand in the bank.
This is very important for trucking companies who often make deliveries and then have to wait 60-90 days or more to get paid for their work. While you’re waiting to get paid, you still have to keep the trucks operating, full of fuel, and make payroll, not to mention pay all your other business expenses.
A factoring company can help you make it through this waiting period by providing you with cash now. Factors will buy your completed invoices, sometimes paying you as much as 90-95% of the face value of the invoices. You receive cash immediately, to use wherever it is needed, and the factor then becomes responsible for collecting payment on the invoices from your customers.
There is no loan to repay and other than a small fee charged by the factoring service, you will still receive the full amount of the invoice when all is said and done.
Special Assistance For The Trucking Industry
To show just how well factors understand the needs of the trucking industry, many factors will offer additional services, specific to the transportation industry. One example of this is fuel cards. Fuel cards allow drivers to get a discount on fuel purchases and allow the trucking company to control each driver’s budget a bit more. Fuel advances are another service factors may offer their transportation clients. Once a delivery has been scheduled, the factor may advance the trucking company the cost of fuel to make the delivery so the job can get done.
Getting Started With Trucking Factoring
To get started with factoring, use the search function on this page. National Factoring Association (NFA) is not a factor, we are a factoring match service that connects businesses with industry-specific factoring companies. We do the quality research for you. All of the factors on our site have gone through a rigorous inspection to ensure they are representing their services truthfully and aren’t hiding information from you. What you see is what you get at NFA. To learn more about our vetting process, click here.
A search of our factors will usually bring you several results. You can then compare and contrast their offers and choose the one that is best for your particular needs.
Our service is completely FREE to business owners so you don’t have to worry about paying for something you’ll never use.
If you have any questions about the process or the results you’ve received, please contact us via our contact form or call us at 903-776-4NFG (4634).