In today’s world, truck drivers play a critical role in the nation’s economy. Since they deliver goods to stores, manufacturing plants, and other businesses and organizations, they play a vital role in keeping the economy moving forward. However, despite their efforts, many drivers have difficulty getting paid for the deliveries they make in a timely manner. Since customers are invoiced for purchases, many truckers must wait 30, 60, 90 days, or perhaps even longer to receive payment. While a large trucking company may be able to afford to wait for these payments, smaller companies and independent owner-operators cannot. Because of this, freight factoring is an option that is well worth considering. If you are part of a small trucking company or are driving a big rig as an independent owner-operator, here are three smart reasons why you should consider freight factoring.
No More Cash Flow Gaps
For many smaller companies and independent truckers, one of the biggest problems they face is a cash flow gap. Since payments on invoices can come in at various times, there are always weeks and months where cash flow can be a problem. When this happens, many expenses such as fuel, truck repairs, and even payroll may be difficult if not impossible to meet, which puts a business in serious jeopardy. In many cases, a business or independent driver will turn to sources of quick cash that are not the best options, such as payday lenders or other lenders offering tremendously high interest rates and difficult payment schedules. However, by using freight factoring instead, cash flow gaps can be easily eliminated. By using a freight factoring service, no debt is taken on. Instead, an invoice is sold to the freight factoring company in as little as 15 minutes, with the company or trucker receiving as much as 98% of the invoice’s total value.
Fuel Card Programs
As trucking companies and independent drivers know all too well, fuel is by far the biggest expense they encounter on a monthly basis. Because of this, income can fluctuate widely depending on the price of fuel. As a result, this can greatly impact how much business a company or driver can do each month, making an already difficult situation even harder. But by using freight factoring and the fuel card programs they offer their customers, this expense and the problems that come with it can often be solved very easily. Since most freight factoring companies offer fuel card programs for drivers, this allows them to have immediate funds to fuel their trucks. Since the money received from selling the invoices can be loaded directly onto the fuel card, truckers will never be without money needed to purchase fuel.
Your Credit Score is Not a Factor
In most situations where a person or company is attempting to secure funding, the lender looks closely at the applicant’s credit score to determine if the loan will be made. However, since freight factoring is not a loan process, a company’s or individual trucker’s credit score plays no role in the process. Instead, the freight factoring company will look at the credit score of the customer who has been invoiced to determine if it will purchase the invoice. If the credit score is considered to be high enough, the invoice is purchased and payment is immediately made to the seller. Also, by using freight factoring services, the credit score of an individual or company can actually be improved. In most instances, poor credit is often associated with insufficient cash flow. However, since freight factoring solves this very problem for companies and independent drivers, credit scores almost always rise substantially.
While a career in trucking involves long hours, being away from home for extended periods of time, and many other difficulties, getting paid in a timely manner should not be one issue on a trucker’s mind. By using freight factoring to keep cash flowing into the business on a regular basis, one source of stress is instantly eliminated. Whether the money is used for fuel expenses, equipment repairs or upgrades, or other expenses associated with the business, freight factoring is one of the best decisions a trucker can make to keep their business running smoothly.