In the trucking and transportation industries, both of which rely on strong cash flow to stay solvent, it becomes vitally important to choose the right type of financing. To think that all financing is the same is incorrect, and choosing the wrong type of financing for your trucking business can actually be detrimental.

In an industry where you need to constantly monitor rising fuel costs, the costs of employee wages, insurance, and other overhead, maintaining solid accounts receivable and keeping your cash flow in the black can sometimes be a challenge.

Freight factoring offers several main advantages including the fact that you receive high initial advance as compared to other types of financing. Freight factoring companies will provide you with advances of 90 to 95% of the value of the invoices you sell, and some companies will offer even more. Many factors also include fuel advances or fuel cards as part of their packages. Another advantage is the quick approval rate and fast funding. In fact, many factors will finance you the same day you request your funds. Freight factoring also helps you build your business as having improved cash flow allows you to take on more loads and expand your company base.

Invoice financing of this type is particularly helpful for:

• startup operations
• companies going through a change of ownership
• companies experiencing a tough year
• companies who can not acquire the funds they need from traditional lenders
• high-growth companies with insufficient working capital

While some companies might use freight factoring to solve short-term cash flow issues, most trucking and transportation companies actually use factoring as a long-term financial strategy, one part of a bigger toolbox. Funding of this type allows you to take on more clients and more business because now you no longer have to wait 60 to 90 days to collect on invoices, but instead you receive instant access to working capital.

Unlike banks, factoring companies prioritize customer service, and factors such as the Accutrac Capital freight factoring company specialize in trucking and work only with trucking companies — which means they understand the ins and outs of the trucking industry and the financial realities of your trucking business. At Accutrac, there are several plans to choose from, including Flat Fee Factoring, from 1.59% for up to 90 Days, which is a simple, easy to manage option with a one-time cost; there is also a factoring line of credit available from 0.022% per day, the flexibility of which provides maximum value and control for larger fleets; and there is also flex factoring, which is ideal for carriers with fast-paying customers, as the rate is a very low 0.49% for up to 10 days.

Trucking can be a challenging business, and keeping the cash flow consistent, while also successfully managing profit margins, and staying on top of the costs of fuel and fleet repairs can be daunting for any small business owner. If you’re a trucking business owner and you’re thinking of new tools to add to your financing toolbox, consider freight factoring — it could change the way you do business.

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