The transportation industry is one of the many areas of the economy where work is completed, costs are incurred and the company doing the work isn’t paid immediately. Instead, most trucking companies work on invoicing, which means that the trucks haul the loads and the customer may not pay for the transportation service for 30 days or more.
That leaves trucking companies with the bills for fuel, maintenance, tires, insurance and driver compensation and with no immediate income. Small trucking companies with limited numbers of trucks on the road don’t have the staggered invoicing to provide a steady cash flow, resulting in times where there may not be a cash reserve to cover the cost of doing business.
The Freight Bill Factoring Option
With freight bill factoring, a third party company can purchase those pending invoices and provide a cash advance. With Eagle Capital Corporation, this funding can be in your account in a few days or less. This is often on the same day we receive the pending invoices.
This gives your trucking service the immediate cash it needs. It isn’t a loan, so there is no interest or repayment. This also helps reduce your back-office workload.
With freight bill factoring you can:
- Ensure driver payroll is made on time, helping to retain top drivers
- Make sure all trucks are maintained on schedule for greater fuel efficiency and safety
- Take on new contracts without having to worry about covering the costs of additional trucks on the road
Factoring in the trucking industry is important for most small to mid-sized trucking businesses. By considering the benefits and advantages, you will quickly find ways it can make your financial business management a lot easier.