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Unsung benefits of transportation factoring

Melissa Thompson

Every business in the trucking industry will rely at some point in its lifespan on financing in one form or another. This is true for small start-up trucking enterprises just beginning to build a reputation, to large nationwide fleets that are always looking for new opportunities for growth. The true question becomes which type of financing is right for your company in your state of development. Typically, trucking company owners will consider bank loans as a first means of securing funding during a period of slow growth or a cash flow emergency. However, because the trucking industry is considered fickle by most institutions, many banks are hesitant to offer loans or lines of credit at all.

This is why more trucking businesses than ever before are turning to an alternative form of financing – transportation factoring — as part of a long-term financial plan. Owners of trucking and transportation companies of all shapes and sizes trust transportation factoring because it is not a loan, but rather a shrewd tactic of selling outstanding invoices at a discount. Furthermore, customers know that when you factor invoices, it helps you maintain positive cash flow even while you’re waiting on large payments, which shows that you care about building and deepening your business relationships with those customers.

This is why truck factoring is becoming more and more popular among US trucking owners and why it’s becoming a mainstream financial strategy in several other sectors, as well.

Transportation factoring from a reputable company like Accutrac Capital, for example, allows you to finance your Accounts Receivable and turn an unpaid invoice (which is little more than a reminder of funding you don’t currently have access to) into the invaluable resource of immediate funding. This will allow you to take on any new growth opportunity, as well as pay for overhead such as insurance, fleet management, and driver wages, all without relying on a traditional banking institution.

Using a factoring company to finance your Accounts Receivable allows you to commit to growth and forward momentum, as positive cash flow always means that you are prepared for whatever comes next. Industry leaders will tell you that transportation factoring also offers several secondary benefits as well. Professionals in your customers’Accounts Payable departments are likely to be familiar with this type of factoring, and many of them will appreciate working with a third-party factor while you focus on delivering freight on their behalf. Furthermore, many factoring companies offer fuel discount cards and equipment financing as well.

Transportation factoring is particularly useful for:

  • companies experiencing a change of ownership
  • companies experiencing a challenging year
  • companies who have been turned down by banks and other traditional lenders
  • high-growth fleets with insufficient working capital
  • startup operations looking for cash on hand to propel growth

With the help of transportation factoring, you will be able to deal with cash flow emergencies and also utilize the service as a long-term strategy for impressing upon your customers old and new that your business is ready for any challenges you face on the road to growth and new opportunity.