Trucking companies often find it difficult to manage their cashflow, with most of their money going toward fuel, maintenance, and other expenses. In down markets, this becomes particularly difficult when every penny counts.
This is where truck factoring comes in – it’s a process that allows businesses to get paid immediately for the goods they’ve delivered, rather than waiting weeks or months. Truck factoring can be a lifesaver for companies that are struggling to stay afloat, so if you’re a trucker, it’s something you should absolutely consider. Keep reading to learn more!
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What Is Truck Factoring And How Does It Work?
Freight delivery is a vital part of the American economy, and truckers play an essential role in keeping the country moving. However, the industry is not without its challenges. One of the biggest hardships faced by truckers is getting paid in a timely manner. Many customers take 30-60 days to pay their invoices, which can seriously strain cashflow.
Truck factoring, also referred to as freight factoring, is a solution that allows truckers to get paid immediately, without waiting for invoices to be processed. Essentially, the trucker sells their invoices to a factoring company at a discounted rate. The factoring company then pays the trucker up front, minus a small fee. This gives the trucker an accelerated cashflow to keep their business running smoothly. In addition, it can help to improve relations with clients by ensuring prompt payment.
Whether you’re the owner-operator of your own truck, a driver in a small or large trucking company, truck factoring is extremely helpful to keeping your business in good standing.
The Benefits Of Using A Factoring Company For Trucking
The advantages of using freight factoring services are abundant:
Truck factoring can help you get paid faster for the loads you transport
Getting paid late by customers is frustrating, especially when the money is necessary to keep your business afloat. That’s why OTR uses BOLT Instant payments. They come into your account instantly. We don’t mess around.
It can help improve your cashflow
Due to instant payment with BOLT , you won’t spend any more time waiting for customers to pay their invoices. You’ll always have enough money on hand to pay for fuel, repairs, and other expenses, keeping your business running smoothly.
Factoring can also help you manage your expenses
It’s important to stay up to date with your expenses so your business stays profitable. Since factoring assures you have a constant influx of money, you can spend less time worrying about finances and more time building your business.
It can give you more flexibility when it comes to making decisions
Things come up unexpectedly for truckers, for instance, needing to make a quick repair all of a sudden. A factoring company for trucking can give you more flexibility when it comes to making decisions on the fly.
Factoring can help reduce your accounting and administrative costs
By outsourcing your invoicing and collections to a third party, you can free up time and resources that can be better spent on other aspects of your business, like booking better, higher-paying freight to drive revenue.
Factoring can provide you with financing to grow your business
Growing a trucking business takes a lot of financial resources. By giving you access to capital that you might not otherwise have had, freight factoring is the answer to growing your business successfully.
It can improve your business’s credit rating
The regular cashflow and financial stability that a factoring company for trucking offers will help you increase your credit score, attract new customers, build credibility, and grow your business.
You’ll have a partner in transportation
Truck factoring is an incredibly valuable tool. By partnering with OTR Solutions, you get the cash you need to keep your business moving. And because we are experts in the transportation industry, we can provide valuable insight and guidance that can help fuel the success of your business. So, if you’re looking for a way to improve your cashflow and take your business to the next level, consider freight factoring. It could be just what you need to get ahead.
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3 Tips For Improving Cashflow Through Factoring
Cashflow is the bread and butter of any business, large or small. Without it, businesses can find themselves in serious financial trouble. Here are a few tips to ensure your business stays financially healthy:
- Make sure you understand the fees involved. Factoring companies typically charge a percentage of the invoice, so you’ll want to make sure you know how much you’ll be paying in fees.
- Choose a trusted company with experience. Not all factoring companies are created equal. You’ll want to choose one that has experience working with businesses like yours.
- Get everything in writing – and read the contract carefully. Once you’ve found a company you’re comfortable with, be sure to get all the details in writing before you move forward.
By following these tips, you can improve your business’s cashflow and keep your operation running smoothly.
How To Choose The Right Truck Factoring Company
When it comes to choosing a freight factoring company, there are a few things to keep in mind. Consider what kind of services you need first. Some factory companies for trucking specialize in certain types of offerings, such as fuel advances or load boards, while others offer a more comprehensive suite of services, such as invoicing, credit checks, and funding options. Once you know what kind of services you need, you can start looking for a factoring company that offers them.
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Another important consideration is turnaround time. When you’re running a trucking business, time is money. You need a factoring company that can get you the funds you need quickly and efficiently. We use BOLT Instant Payments for this exact reason, paying our clients immediately upon request.
Also, make sure to check out the fees charged by the company. While most factoring companies charge a percentage of the invoice amount, some also charge other fees, such as application fees or monthly minimums – hurting carriers in the long haul.
Finally, it’s always a good idea to read online reviews from other business owners before choosing a factoring company. With a quick Google search, you will be able to find a lot of information.
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By following these simple tips, you can be sure to choose the right truck factoring company for your business. In fact, why not give us a call here at OTR Solutions to find out how we can benefit your company?
Is Truck Factoring Right For You?
If you’re looking for a way to improve your cashflow, increase your profits, and get rid of the hassle of invoicing and chasing payments, then you will be happy to start truck factoring with OTR Solutions. Contact us today!
We’re happy to discuss your options with you in more detail and answer any questions you have. With over 10 years of experience in the trucking industry, OTR knows exactly what it takes to help businesses like yours succeed. Thanks for reading!