Trucking companies often find it difficult to manage their cash flow, 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 definitely 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 cash flow.
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 discount. The factoring company then pays the trucker up front, minus a small fee. This gives the trucker much-needed cash flow to keep their business running smoothly. In addition, it can help to improve relations with clients by ensuring that they are paid promptly.
The benefits of using a factoring company for trucking
The advantages of using freight factoring services are many:
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 needed 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 cash flow
Due to the instant payments with BOLT and therefore no more waiting for customers to pay their invoices, you’ll always have enough money on hand to pay for fuel, repairs, and other expenses which will help keep your business running smoothly.
Factoring can also help you manage your expenses
It’s important to keep a close eye on all of your expenses so that you stay profitable and enjoy more peace of mind. Since factoring assures you have a constant flow of money coming in, managing expenses is no longer a worry.
It can give you more flexibility when it comes to making decisions
Things come up unexpectedly all the time for truckers, for instance, when you need to make a quick repair all of the sudden. A factoring company for trucking can give you more flexibility when it comes to making decisions on the fly, like this:
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 wherewithal. By giving you access to capital that you might not otherwise have had, freight factoring is the answer to expanding your business successfully.
It can improve your business’s credit rating
The regular cash flow and financial stability that a factoring company for trucking offers naturally 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 such a valuable tool. By partnering with OTR Solutions you have 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 you grow your business. So if you’re looking for a way to improve your cash flow 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 cash flow through factoring
Cash flow is the lifeblood of any business, large or small. Without it, businesses can find themselves in serious financial trouble. Here are a few tips:
- 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 cash flow 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. First, consider what kind of services you need. Some factory companies for trucking specialize in certain types of offerings, such as fuel advances or load boards. 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 reason which pays out 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 making a decision. With a quick Google search, you will be able to find a lot of information.
Read all of the amazing Google reviews on OTR Solutions!
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 cash flow, increase your profits and get rid of the hassle of invoicing and chasing payments, then you will be happy you started truck factoring with OTR Solutions. Contact us today! We would be 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 what it takes to help businesses like yours succeed. Thanks for reading!