Did you know that roughly 82% of small businesses go under due to inadequate cash flow? Yes, that includes trucking businesses. Whether you’re a large trucking company or an owner/operator, you know the various challenges of managing your business - satisfying customer demand, keeping up with changing regulations, managing your fleet of vehicles and drivers, and much more. Meeting the demand of all of those challenges is meaningless if you don’t have a steady balance of incoming funds.
So how does a trucking company that’s still recovering from the effects of the pandemic - a unique time when late payments increased 500% - close the gap between steady liquidity and delayed customer payments? One way is through a handy system called invoice factoring.
Invoice factoring for truckers is an efficient funding method that allows trucking companies to sell their unpaid invoices to a factoring company at a lower price to receive payment quickly rather than waiting for the client to pay the trucking company.
Need an easy breakdown of exactly how invoice factoring works? Here it is in four simple steps:
Among the most obvious perks of opting for invoice factoring - getting paid quickly instead of waiting on your client to pay - there are many other benefits to invoice factoring that can serve you and your business well. Here’s a few of the other reasons trucking company’s appreciate most from invoice factoring:
Since you’re reading about invoice factoring, chances are you’ve also heard about freight factoring for truckers. While these systems are similar, there are some significant differences between the two.
Simply put, freight factoring companies specialize in the transportation field and therefore have in-depth understanding of trucking challenges and needs, including industry-standard terms and payment norms. This level of knowledge enables a freight factor to extend tailored products and solutions to truckers and trucking companies. Invoice factoring companies serve a broader range of industries, so they may lack the insight in the trucking industry that a freight factoring company will have. In addition, freight factoring agreements are often made when the driver collects the load and starts the journey to their destination. The result of this is that the driver doesn’t receive as high of a cut of the total payment as you would with invoice factoring.
If your business decides to opt for invoice factoring, you need a company that has your back. Prime Factoring will reduce your cash flow to-do list and subsequent office work so that you have more time to focus on what matters most - getting your loads delivered and keeping your customers satisfied.
Go ahead and apply today or contact us to learn more about our invoice factoring services. We’re here to help your business thrive!