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Invoice Factoring for Trucking (Bobtail Factoring)
Trucking might be one of the most capital intensive industries around. In addition to the high price you have to pay for equipment and skilled labor, there’s also the matter of paying for the fuel that is being used to ship your load, as well as other miscellaneous costs associated with running a trucking firm. Therefore, it’s no surprise that so many trucking companies use invoice factoring and the benefits they get from invoice factoring companies to make sure they have the liquid capital necessary to grow their business.
What is Invoice Factoring for Trucking?
Invoice factoring is a business-oriented financial product that involves selling your receivable invoices to a factoring service. The factoring company will pay out an initial funding, usually 80-95% of the value of your factored invoices, and you’ll get the rest once the customer has paid, minus the factoring firm’s small discount rate. This process makes it easy to focus on your trucking business and doing what you do best. As a result, you’ll have the cash on hand for your business when you need it.
Benefits of Invoice Factoring for Trucking
There are many benefits that trucking companies can receive from factoring their receivables. The first, and most obvious, is that invoice factoring gives you the money you need now to expand and grown your trucking business. Take on more loads without worrying how you’ll pay for staffing, gas, fuel, and other costs associated with doing businesses.
Additionally, invoice factoring means that you’ll get your cash fast. Many factoring companies will provide funding in 24 hours or less, so you’ll have cash on hand for things like equipment, training, labor, and other expenses, without having to worry about when your customers are going to pay for your services. This speed of funding is one of the main reasons so many trucking companies prefer invoice factoring to the other alternatives.
Finally, invoice factoring helps simplify your books, as you can factor many invoices at once. This results in large, lump sum payments to you so that you can grow your business, without having to worry about things like loan interest rates, or how to categorize business advances in your ledger. The result is that you can spend more time growing your business, and less time tending your books.
As you can see, there are many benefits to invoice factoring for trucking companies. If your trucking company needs more cash on hand and has outstanding receivables, try invoice factoring today!
- Box or dry van trucks.
- Dry bulk cargo trucks.
- Dump or tipper commercial trucks.
- Flatbed trucks.
- Lowboy semi-trailers.
- Refrigerator and reefer semi-trucks.
- Tanker or fuel trucks.
- Bobtail trucks