Financial slowdowns are difficult for businesses, particularly when they lessen working capital. They are mostly trying whether you own a trucking fleet due to the fact that regarding the expenses involved. How do you balance the rising cost of gas, insurance, licenses, truck maintenance and other transportation costs without resorting to lay-offs or fuel surchargessolutions that should potentially cost you clients and reduce profits. One solution is trucking factoring, an incredibly simple process together with the right transportation factoring service. What is freight factoring?.
Freight factoring services, for example Distant West Capital, pay cash immediately to trucking businesses for a percentage of their invoices today. Factoring services can help increase your company's cash flow by reducing the lag time between invoicing and payment from your clients. How does transportation factoring work?. Transportation factoring consists of converting a company's accounts receivable into working capital by selling invoices to a factoring business at a discount just like any invoice factoring. Getting business loans shall be tricky and time consuming.
Transportation factoring can help you during an economic downturn by providing funds you should focus on your clients and trucks without possessing to worry about paying your bills on time if a customer is late on a payment. Transportation factoring reduces credit risk to your business and can help solve any cash flow problems your business shall have. And, better yet, due to the fact that transportation factoring services rely on being paid by your customers, that you own financial the past does not have any bearing on your qualification. The following are steps in a typical transportation factoring process:. The factoring business assesses the invoices and sends a line of working capital based on a percentage regarding the invoice, typically 65 to 95 percent regarding the invoice amount.
Your customer then pays the factoring company. Upon payment regarding the invoice, the transportation factoring business shall release the difference between the collected quantity and the advance minus their factoring fee, which typically section anywhere from 1. The volume of your advance depends on the projected dollar volume going through your program, the turn of your historical and projected receivables, the many customers, average invoice volume and the financial profile of your company. Transportation factoring businesses like Distant West Capital shall work with you to build customized factoring and financing solutions around trucking and transportation businesses.
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