There are many factors that affect the US economy, but one of the largest concerns right now — especially for the trading of goods — is the current meteorological chaos that has been sweeping through the southern states throughout the last few months of 2017. As far as meteorology is concerned, hurricanes Harvey and Irma are in the past. But from an economic point of view, especially the viewpoint of US shipping interests, the storm rages on. Combined damage from the storms has been reported as high as $290 billion.
This economic aftershock is affecting transportation companies in a massive way, as freight flow is stalled and the cost of doing business is skyrocketing across North America. This year’s hurricane season has been notably worse than usual especially in the US, and the effects are far from over. The wake of the storms is currently affecting inland freight capacity in a large way, and domestic transportation costs for shippers and their transportation partners is already increasing. Over the next few months, upwards of 7% of the entire American trucking fleet could be diverted from its normal commercial activity to disaster relief and reconstruction efforts, according to the experts at truckstop.com. In times of commercial upheaval like these, many trucking companies find themselves facing difficult logistical problems. From shipping buildups, to increased fuel costs because of inland damage, many trucking companies are starting to feel the pinch.
In today’s uncertain American economy, freight bill factoring has become a go to financial asset for many trucking companies who face the increasing threats of instability. There are a number of advantages to using freight bill factoring, the most obvious of which is the ready access to funding that this kind of arrangement provides. Rather than applying for a new loan each and every time you run into financial difficulty, you can simply factor your invoices in order to increase your cash flow. By factoring your invoices you essentially create instant positive cash flow with steady reliable funding that grows with the more invoices you submit for funding. If, on the other hand, you were to use a bank loan or a credit card, you would be restricting yourself to a hard limit set by those entities that could prove to be an obstacle to your overall plans for growth.
Because freight bill factoring is not a loan, it means that the qualification process is much faster and much easier than applying for a conventional operating line of credit. As long as your customers are credit worthy, and have a good payment record, you’re assured of getting accepted and securing much needed funding — whether that means keeping your fleet on the road, paying your employees, meeting their benefits needs, or simply exploring new growth opportunities.
Freight bill factoring is essentially a cash advance funding arrangement that you make with the factoring company which then allows you to sell off your customer invoices and receive funding equivalent to the value of the invoice minus a small fee that is held in reserve. Factoring companies offer very low factoring rates — some as low as 1.59% — the amount of which is taken from the advance. Accutrac Capital, to give you one example, offers several rate packages that benefits trucking companies of all shapes and sizes. As a trucking business looking for financing options, consider any one of the following options (of which you can learn more at Accutraccapital.com with the click of a button):
Flat Fee Factoring
- From 1.59% for 90 Days
- A simple, easy to manage option with an easy to calculate one-time cost.
Factoring Line of Credit
- A flexible line of credit providing maximum value & control for larger truck fleets
- From 0.022% per day
Flex Factoring
- Only 0.49% for 10 days
- The ideal funding option for carriers with quick paying customers
Every business owner loves the feeling of a cleared invoice. With invoice factoring, you can get that feeling long before your clients actually pay their invoices. Without waiting 30, 60 or even 90 days for your clients to pay, you can instead receive your money often within the same day, allowing you to spend your money where it needs to be spent: on your fleet, your staff, and growing your business.
With no more invoices to chase, without needing to wait around in order for your clients to pay, and with immediate funds in the hand, invoice factoring truly simplifies your bookkeeping experience and allows your trucking or transport company to get paid on time every time.
Kidal Delonix is a contributor to Mr. Hoffman's blog. The views and opinions are entirely his/her own and may not reflect Mr Hoffman's views.
