Trucking businesses know how difficult it can be seeking to conduct an operation while setting for invoices to be paid. Some customers may not cover until 60 days after a project has been completed.
Meanwhile, the best reefer trucking companies must continue to meet its bills to keep their company afloat, seldom on very little money. Labour has to be compensated and gas purchased with no cash from the customer (at least not for 30-90 days).
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Many trucking companies must rely on credit to keep their companies going or risk losing everything. 1 option that's beginning to be used by several businesses in the business is freight bill factoring.
Transportation bill factoring gives a trucking firm quick money. Rather than waiting 30-90 days to get paid for tasks, they may be paid in seven days from a factoring firm. This gives businesses the money they have to cover their drivers, recoup their transport expenses, and take on new tasks, all without taking on any new debt.
The practice of factoring (also called invoice financing, PO funding, and values receivable factoring) is easy enough. It means two things, a business's invoices and a factoring company, also called the factor.
The factor buys a corporation's invoices for money and then collects these statements for a company for a fee. Typically this fee is somewhere in the neighborhood of 1.5%-3.5%.
This is an illustration: Super Road Trucking Company might have only completed a $50,000 job for a customer with very good credit. They've invoiced their customer and expect to get paid in 30 days.