In the transportation industry that involves freight transport by truck, it is necessary to make out-of-pocket payments in order to keep your fleet running. If for some reason you don’t get your invoices paid on time, you can find yourself strapped for cash flow. This problem is solved however, by using the services provided by a freight factoring company. These providers of business financing will pay you upfront (so to speak) before you get paid from your customer. This gives freight companies the flexibility they need to continue daily operations unhindered by the uncertainty of timely invoice payments.
Cash Flow in the Freight Industry
Cash flow is essential to almost any type of business and pointedly so in the transportation industry. Business can simply get stuck and put to a standstill if cash flow is unavailable to pay expenses and vendors.
As stated, a freight factoring company helps by delivering accounts receivable funding when its needed. As a client of one of these companies, you don’t need to be bound by a long term contract either. Often the arrangements are short term in nature with the opportunity for continued extensions.
As well, you can expect the fees associated with this service to be reasonable. This reliable source of funding helps your business function like a well-oiled machine, with skipping a beat.
The Process
So how do you receive the funding you need? Well, the process is quite simple. A freight factoring business will purchase your accounts receivable and in turn you receive the money you need in your account, often on the same day. Here’s how it works: First, you complete your customer’s project or order. Secondly, you send your invoice to the freight factoring company. Thirdly, that company sends you the cash you need.
Freight factoring companies understand the needs of businesses. They know that businesses survive and grow through consistent cash flow. By using the services offered by these companies, businesses such as your cannot only maintain operations, but have the confidence to expand operations.
If you need consistency and flexibility in your transportation business’s cash flow situation, consider the real benefits of financing available through freight factoring companies.
