If you or someone you know owns a company that requires reliable and consistent cash flow without waiting for loans or payment, there are certain processes that can increase the potential for productivity, on-time payments, and efficiency when doing business with other corporations.
Let’s see the benefits of using a trustworthy company to help pay upfront and scheduled expenses with ease.
Truck Factoring Services for YOUR Business
You may be wondering if truck factoring is right for your business. Here we will get in-depth about the benefits of truck factoring, the technology needed for a successful factoring business, and the different types of factoring that can influence your decision.
Truck factoring ensures your business status accountable when paying vendors and drivers, keeping your reputation in a good light amongst the public. By providing you with cash flow and covering unpaid truck invoices, a truck factoring company helps resolve any issues with unpaid payments and outstanding debts.
The two types of truck factoring services are recourse and non-recourse factoring.
Recourse factoring
Recourse factoring involves the transportation company assuming the liability for customers who do not pay on time for their outstanding bills. The benefit of using recourse truck factoring is the lower rates when compared to those with liability added to the total price. For companies that are larger in size and resources, this could be the best choice, since bigger companies can cover any unwanted debt expenses.
Non-recourse factoring
For smaller companies and new startups in the transportation industry, non-recourse factoring could be the smarter decision. This type of truck factoring refers to the factor being the one liable for bad debts that have not been paid on the invoices.
The negative of choosing this option is the higher interest rates since the factoring company is covering the debt expenses. However, if you are a new business that needs to get on its feet and earn some clients, using non-recourse factoring at least allows you to make a name for yourself in the industry.
5 benefits of truck factoring
If you own a truck company, using freight factoring is an easy way to increase cash flow. Factoring your bills has advantages and disadvantages when compared to other business plans to increase profit and reduce expenditure. However, in the long run, freight factoring is a great way to balance out those who owe you money with ongoing daily expenses, helping you pay on schedule and accept a new workload.
Improved cash flow
One of the biggest benefits of using truck factoring is the cash advances to ensure you can pay vendors on time and prevent any bad business relationships with co-workers and corporations. Factoring helps your company pay drivers, buy fuel, and increase your workload without taking on too much. Paying your vendors and dryers on time can increase your reputation and increase your reliability in the sector.
With improved cash flow, you can receive money on the same day. When paying vendors or drivers, this ensures you can immediately pay them on the spot if you need to settle a debt before the freelancer leaves your business.
Fuel advances
Many truck factoring companies offer fuel advances to cover gas for a trip or other expenses incurred on the trip that comes with pulling the necessary load. These fuel advances help continue working on lucrative projects and taking on new clients, even when your cash flow has decreased.
Fuel advances have several benefits in the truck factoring world. Fuel advancement means that you don’t have to keep each truck fueled on your own, but the factoring company can help you pay to fill the tank and avoid the client having to do this hassle on their own.
- Saves time – fuel advances help save time for clients and the following customers. Owners who run small fleets don’t have the manpower or resources to constantly monitor fuel levels in all of their trucks. Most clients will not offer advance payments to fuel the trucks, either, meaning that a truck factoring company will be the one in charge of providing a reliable cash flow to keep the tanks at a high level.
- Accept more clients – truck factoring companies that offer fuel advances let you constantly accept new clients, leading to a bigger payday and the chance to pay off your debt quicker. By having a steady influx of cash, you can accept more clients and keep the fuel tanks filled in your truck fleet.
- Financial stability – you can track your expenditures and income by having a truck factoring company that keeps you supplied with a steady stream of cash.
- Flexibility – the truck factoring loan can be given to the business whenever they need it. If you have a fleet of trucks with near-empty tanks, you can request a cash advance from your truck company to fill up the gas tanks in each individual truck and ensure your client leaves happy.
Easier to get than other loan options
Truck factoring is easier to acquire than other loan or monetary options for businesses. Getting truck factoring is very easy and simple, making it much quicker to obtain than other financing methods. Furthermore, truck factoring organizations know that each business is unique – which is why they provide individual solutions for each business’ needs.
No long-term contracts
Long-term promises can quickly lead to broken promises and accruing debt. Instead of going in over your head with a loan, truck factoring means you can sign a short-term contract that works for your specific needs.
Furthermore, truck factoring is start-up-friendly. This means that your business does not have to be around for a long time or have a credible reputation before earning a truck factoring loan. If you are a new transportation company that has to get on its feet before earning the trust of other clients, a truck factoring company can help you start your business.
Grows with your company
Truck factoring gives you the opportunity for your business to grow without having to say no to important jobs or clients. In addition, truck factoring can increase in size along with your ever-growing business. Instead of bank lines that have credit limits and loan sizes, your truck factoring company will remain dynamic during your course of growth.
Truck factoring technology
Most truck factoring companies use certain technology methods to ensure they are organized and provide you with the correct resources. Truck companies are mobile since they have to keep track of clients all over the country. Some freight factors are working to help provide tech solutions that fit their workloads and on-the-move lifestyle.
Truck factoring companies use digital technology in modern times to help their efficiency, client list, and communication with clients. By embracing faster communication and payment methods, truck factoring companies can increase their clientele and boost their reach.
Most truck factoring companies with good reputations and a solid client base have the following digital methods to boost their productivity, wealth, and efficiency:
- Digital paperwork – since truckers and transportation companies are highly mobile, truck factoring companies will have to use digital paperwork to sign contracts and payments. By using reliable websites that can use a client signature, apps that require identification verification, and scanners, truck factoring companies can ensure they are working with the right people.
- Proof of delivery – when choosing a truck factoring company for your needs, you need to ask yourself if the business accepts proof of delivery through electronic communication methods (like scans, emails, and apps). If not, then choosing this company is not the most efficient choice for you, since you will always have to return to do business in person.
- Unlimited online communication and access – a website that provides you with a constant method of communication to the truck factoring company customer service means you never have to worry about having questions regarding your route or payment status. Figure out real-time information and see what steps you need to take for submitting invoices, contacting representatives, and signing paperwork.
- Mobile app – having an app for communication between a truck factoring company and the client is crucial to ensuring the client stays happy and in the loop. Without a constant stream of communication and real-time updates, the client will be unsure as to their specific job, time constraints of the delivery, and payment status updates. Although many truck factoring companies have mobile apps, you need to ensure the app is compatible with all smartphones and makes your life easier – not harder. See if you can capture images with the app, along with submitting proof of delivery papers and pay stubs.
- Another tech for your efficiency – ask your truck factoring company if they have other apps and technology that make their life easier and sets them apart from the competition. See if they have online invoicing, accident reports, and gas station locators.
Conclusion
There are multiple benefits to using truck factoring to finance your company. With flexibility, growth, ease of use, short-term contracts, and cash advances, you can ensure your transportation business continues to take on new work, pay vendors on time, and maintain a reputable public light.
