A high score, while not the only consideration, helps secure their trust. Another way of looking at it is that a low credit score is very likely to have a negative impact on your business. Factoring your invoices provides the financial stability you need to increase your score and build financial credibility over time. In fact, the regular cash flow and financial stability that invoice factoring provides can help you increase your score, attract new customers, build credibility, and grow your business. We help thousands of business owners from different industries get the working capital and business credit help they need to grow their businesses.
Nearly 12 million trucks, rail cars, locomotives, and vessels move goods over the transportation network. Commercial transportation requires a great amount of attention to detail, which is just one reason so many professionals have been relying on services from transportation factoring companies and other types of small business factoring. Some invoice factoring companies offer promotional discounts or have minimum requirements you have to meet each month to qualify for the lower fee. Also, ask your factoring company what other back office solutions they help you with.
Most factoring companies include additional services included in their fees. According to a U. Bank study, 82 percent of businesses fail because of cash flow problems. You know as a business owner that public reviews can be misleading or not give all the details of a problem.
Invoice Factoring for Business
Also, look at the total amount of reviews. Reviews can be helpful, but also ask other drivers in the industry. Those referrals will probably give you a fairer review of their company. How big of a deal are late payments?
What could you invest in your trucking business if you knew you were going to get paid within one to days instead of waiting a month or more? The right business factoring services can help you with your cash flow that will help your present and future business plans. We can help you, too. As a trucking owner-operator, you know that running a successful business requires you to wear many hats. The new year is here, and that means this is a good time to look to the year ahead and think about what you can do to make it your most successful year yet.
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Regardless of what your truck is carrying, one of your biggest expenses is fuel. The mistake that many owner-operators make is confusing the lowest pump price with the lowest fuel cost. The reason, as you know, is that you must pay state taxes on the fuel you use as you drive through the state. To save money on fuel, look for the lowest base prices and plan your fuel purchases to take advantage of them.
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Creating a budget as an owner-operator means estimating both your fixed and variable costs. You may need to justify your rates to potential clients.
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One thing that can help is getting a handle on fuel prices. The US Department of Energy has a fuel price tracker that you can find here. You can also back up your prices by knowing the going rates for specific lanes and any other influencers that may impact your pricing. You may even be using tools that already give you this information. DAT, for example, provides for its subscribers the day average on loads, so you have a baseline to go off of when negotiating.
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One frequent topic of discussion is speed. Is it more efficient to drive fewer hours at a higher speed, or are you better off with a lower speed? While you can certainly buy a new truck, there are some things that you should keep in mind if you do — and some compelling reasons to consider a used truck instead. You should be buying a truck based on its efficiency, power and reliability. Keep in mind, too, that there are some real benefits to buying used trucks instead of new ones.
You already know that buying a new vehicle means taking a big depreciation hit. When you buy used, the previous owner absorbs most of the depreciation. Matt Douthit, the founder of truck driver career site CDL , recommends looking for a truck with about , miles on it. Trucks require routine maintenance, and one of the biggest mistakes that owner-operators make is waiting until something is wrong before taking their rig into the shop.
Those quiet periods are the ideal time to have your truck checked out and take care of needed repairs and maintenance. It will require a bit of strategic marketing to connect with direct shipping clients, but it can make a big difference in your net profit. Our final piece of advice is to find a way to differentiate yourself from other owner-operators.
For example, you might:. At Triumph Business Capital, we help thousands of owner-operators with their cash flow every single day. Is cash flow an issue for your trucking business?
If so, you should consider freight bill factoring. Fortunately, invoice factoring can help bridge the gap between when you dropped off a load, and when you get paid for it. If the invoice is approved, the factoring company will deposit money directly into your bank account in as little as 24 hours. After you receive payment, the factoring company will work with your client for payment.
Invoice Factoring — The Secret Cash Flow Weapon for Startups | Payability
Make sure you ask about some of the benefits of each program, and how it might affect your business before signing. This is because the factoring company assumes responsibility and protects your business from customer insolvency. That means if your customer goes bankrupt, the factoring company will not attempt to collect those unpaid invoices from you. While non-recourse factoring is a great option for small, independent owner-operators, larger companies will typically use recourse factoring because of their potential reserves to get them through any delays in payment.
In a recourse agreement, the factoring company does not offer the same protection in the event your customer goes bankrupt. For that reason, recourse agreements tend to be less expensive, in terms of rate, because the trucking company is assuming the risk of nonpayment from insolvency. Recourse factoring is a great option if you know your customers will pay in a timely manner. Recourse and non-recourse factoring have their similarities and differences, so carefully decide which type of factoring will benefit your company. This is why, when business owners look for factoring companies, they often search for those that offer fuel advances and discount fuel cards.
Once you pick up a load, you can receive money to pay for fuel and other expenses. If you want a fuel advance, all you need to do is send a request that includes rate confirmation and a bill of lading. A card gives drivers fuel rebates at major truck stop pumps across the country. Some invoice factoring will even let you split your payment across different payment methods.
A fuel card also gives you the flexibility of transferring to a single or multiple bank accounts. At times, companies must wait a while for brokers and shippers to pay. Meanwhile, those companies also need to pay for drivers, fuel, repairs, and other expenses as they wait. However, factoring is especially beneficial for startup companies that lack large cash reserves. Also, if you need to improve your business credit, factoring is a great way to do so. You can quickly get paid for jobs, allowing you to pay off loans and pay your bills on time.