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Being an owner operator in the trucking industry can be stressful. But there is a way to relieve at least some of your stress and grow your business at the same time: freight invoice factoring. Factoring is a quick and easy way to get paid for your invoices by selling them to a factoring company.
You might not always need to factor your invoices but there are some situations where it makes sense. You might benefit from freight factoring if:
Business has started picking up.
It takes a steady flow of cash to keep a trucking company rolling. Expenses like truck and trailer payments, fuel, payroll, insurance, permits, tolls, maintenance and repairs are constant.
It doesn’t help that you have to wait 30 or even 90 days to get paid. If you can’t buy fuel, you can’t run your trucks. There’s no way around that unless you apply for a loan, get a fuel advance or factor invoices.
Factoring is a great solution for both fleets and owner operators because it eliminates wait times to get paid. When you’re factoring, you’re getting paid fast. No more waiting around.
You need to get paid right away.
This is the most common reason for cash flow problems in the trucking business. Long wait times for invoice payments can be a killer for a trucking company.
Waiting 30 days for payment of loads already delivered is not good for small business owners. And when your cash runs out you have to either take on debt or not run your trucks until you get paid. If your trucks are financed and you’re in a cash crunch, you’re stuck.
And what happens to your drivers when you reach that point? They can’t be happy about their unpredictable paychecks. You know what happens when drivers aren’t happy? They leave.
Factoring eliminates the long wait times for invoice payments. You have cash the same day you deliver loads. That means you never have drivers sitting idle and not being paid.
Your cash flow is consistent and immediate. You can pay your drivers well and on time. They’ll be happy in their work and more productive.
You need help with the business side of your trucking business.
Many owner operators and small fleets fail because they are run by people who are truckers and not business managers. They don’t really know how to grow their business.
So, they depend on their hard work and blind luck to see them to prosperity. But that game plan rarely results in success in trucking.'
Even if you’re only working with one truck, you need to run it as a business, one with clear goals. It starts with cutting wait times for invoice payments and having someone handle your billing and collections.
Sound impossible? It’s not. That’s exactly what factoring will do for you. It eliminates long wait times for payment. And freight factoring companies like eCapital handle all of your billing and collections for you. This leaves you to do what you do best: trucking.
You don’t want to (or can’t) borrow funds.
Let’s face it, big banks don’t want to loan money to trucking companies. If they did, it wouldn’t be so difficult to get approved.
One of the defining features of factoring is that it’s a quick approval process so you can get paid in 24 hours and never have to worry about cash emergencies.
Here’s why: approval is not dependent on your credit. You can be approved even if you have bad credit. Approval depends on the credit worthiness of your customers; it has nothing to do with your credit, whether it’s good or bad. If your customers have a good payment history, you’ll be approved.
Factoring is not lending so you don’t need collateral or a down payment. You’re getting paid for work you’ve already done. Your credit history is not important when getting approved to factor invoices.
If any of the above scenarios sound familiar, it’s time you started factoring your invoices. You’ll get consistent cash flow to stay ahead of business expenses. And you’ll have money to grow your business so you can keep moving forward…on the road again.
All California loans made or arranged pursuant to a California Finance Lenders Law License, CA Finance Lenders License – 60DBO46224 Copyright © 2020 eCapital. All Rights Reserved. eCapital is registered Trademark. Registration Number: 5,098,285