|The Advantages of Trucking Factoring for Trucking Companies
It’s the same story right around the country: small trucking companies are trying to expand their businesses but running into the same problems. While the trucking business can be quite lucrative, it can take many weeks or even months to finally get paid on hauling invoices. This creates such a huge cash-flow problem and it seems like you’re always playing catch-up in paying salaries and other bills. Find out what the Largest Trucking Factoring Companies are.
We just caught up with Jason Kind, owner of a small trucking company that he built only a few years back. Like many trucking owners, Jason was trying to expand his company to meet the needs of his clients, but was running into money issues that were holding him back. We asked Jason about his particular situation, the challenges he faced, and how he was rescued by Trucking Factoring without being forced into deeper financial burdens.
Jason, it’s good to have you with us.
Jason: “Thanks very much, I’m glad to be here.”
Tell me a little about your trucking company and how it got started.
JK: “I’ve been truck driving for many, many years, and then back in 2011 I made the decision to start my own business. I went through all the normal procedures for getting my loan, purchased two trucks, and away I went. In the beginning it was fantastic, and I was pretty excited: I’d made some connections when driving previously so was lucky to pick up some great business straight away. It seemed like everything was starting to snowball as I was getting requests from other businesses, but I was running into a cash problem.”
It seems rather strange that being successful was causing you to be short on cash?
JK: “I know. You see in the trucking business we charge invoices which means that it could take weeks or even months before the cash would roll in. A typical invoice takes anywhere from 45 to 60 days before the payment comes through. Here I was getting offers from other businesses and I didn’t have the cash on hand to buy trucks and hire drivers.”
So, how did you handle it?
JK: I admit that I was getting pretty stressed, because I knew that by the time the cash was available, the business opportunities wouldn’t be there. I didn’t want to sign up for another loan because that would just be another debt to pay off later, and I really had nothing to sell or any other way of getting money. It was around that time when I heard from one of my friends in the trucking business about Trucking factoring.”
Can you explain to me exactly what Trucking factoring is?
JK: Well, to put it simply, it’s a way for companies like mine to have access to quick cash in payment for the loads we haul. With factoring, we don’t have to wait to get paid for hauling; the Trucking factoring pays us straight away for the work we’ve completed.”
How does Trucking factoring work?
JK: “Well, there are companies out there who are willing to purchase the invoices that trucking companies like mine get when we perform a job. I was very fortunate in that I found a reputable company that purchases my invoices after we’ve completed the job, plus other bills associated with our business. In return, they pay us cash that I not only use to cover my payroll, fuel costs and expenses, but I was able to put back enough money to purchase another truck a lot more quickly than if I had simply waited for the invoices to be paid.”
It seems like you stumbled on a pretty good deal when it comes to Trucking factoring. Are there any other benefits that you’ve enjoyed by using this service?
JK: Absolutely! The invoices are the means to pay the factoring company. This is not an ordinary loan where I have to pay back the money. The Trucking factoring company simply takes a very small percentage off each invoice or bill as their fee and I get the rest in cash right away. This has been an absolute blessing for me, because I was able to get the cash I desperately needed to expand my business, and (this is the best bit) I’ve also paid off my original loan.
In fact, I was able to leap onto new business offers more quickly because the Trucking factoring allowed me to start purchasing new trucks and hire drivers months before I could even consider doing that simply waiting on the invoices.
Jason, this Trucking factoring almost sounds too good – are there any catches at all?
JK: I wondered the same thing at the beginning: I was pretty sceptical, but it’s all been very straightforward. The Trucking factoring company I use didn’t even charge me a sign-up fee nor did they sign me to any long term contract. I just took a few minutes with them to set everything up and when I turn in an invoice, they pay me cash right on the spot.
You mentioned that you didn’t sign any long term contracts. Are there a minimum number of invoices or amounts that you have to turn in each month?
JK: No, actually. When I first started with them I was turning in practically all of my invoices so I could generate some cash up front. Now, when I need some cash to pay off bills or make quick purchases, I go to the company with my invoices. Some months I’ve turned in quite a few invoices, other months not so much.
You sound very happy with the deal you have with your Trucking factoring company?
JK: Absolutely! I’ve even taken advantage of the discount cards and fuel advances to help save some money – this was an enormous help in the beginning. I’ve even had my competitors call to ask how I was able to grow my company as quickly as I did. I’m happy to tell anyone who asks: if you have invoices, then Trucking factoring is the only way to get cash fast, without all the stress of having to take out loans and getting even deeper into debt.
Jason’s business continues to grow and Trucking factoring was a big reason why he was able to expand so rapidly. If your trucking business is short of needed cash with invoices that have yet to be paid, then you should consider Trucking factoring as a way to put money into your hands right away. Discover the Largest Trucking Factoring Companies .