According to the Federal Reserve Chair Janet Yellen, U.S. manufacturing is forecast to increase faster than the general economy in 2018, by as much as 2.8 percent. Growth is predicted to slow to 2.6 percent in 2019 and 2 percent in 2020, but 2018 should be a major year in manufacturing. This means that many companies, including trucking and freight companies who profit from surges of this type, will be investing in growth next year. Of course, not every company has the cash flow necessary to free up the kind of money required to make big moves.
If you own a trucking or fleet company and want to free up funds to capitalize on 2018 opportunities, consider freight factoring to help you convert your accounts receivable into working funds that can be invested directly into the growth of your business.
Freight factoring (also known as invoice factoring) is a type of financing that many companies — especially those in the trucking industry — use to get access to funds that are normally tied up in their accounts receivable. A company will sell its accounts receivable in the form of unpaid invoices to a third-party factor at a discount. Rather than waiting 30, 60, or 90 days for customer payment, companies instead receive immediate cash minus a small factoring fee while the factoring company itself collects payment from the customers who owe on the invoice.
The process is simple: your business enters into a factoring agreement with the factoring company, and then you perform the work as normal delivering your freight. You send a copy of the invoice to the factoring company, and once they have purchased the invoice and given you your cash advance (minus a percentage held in reserve and a small factoring fee that varies depending on the plan) they will then collect the invoice from your customer, and once they have done so, they will return the reserve to you. Plans like these are among the cheapest invoice factoring options for trucking companies which explains why they have become so popular in recent years.
Many industries use factoring as part of their overall financial strategy, from marketing, to IT, to PR, to retail. But the trucking industry in particular finds this type of factoring beneficial because it allows you to collect on your services quickly (rather than waiting on invoices that can take 1 to 3 months to clear) and also helps fuel your company’s expansion.
Freight factoring provides you’re trucking or transportation company the funds it needs to operate and maintain its day-to-day business. Because factoring companies determine eligibility based on the credit worthiness of your customers — and not on your business itself — qualification is simple. Essentially, if you own a trucking company, you qualify.
A reliable factor such as Accutrac Capital for example provides funding exclusively to companies in the trucking and transportation industries. They know your business, which means they can be relied upon to provide financing that makes sense for your niche industry. Further, their suite of plans is designed to suit trucking businesses of all sizes, from small to large fleets. If you want to capitalize on the growth opportunities of 2018, freight factoring might be the solution you’ve been looking for.