Freight factoring can be a powerful tool for small trucking businesses, but how exactly does it help them grow?
Read on to learn how factoring can help small trucking companies thrive and grow.
How Can Freight Factoring Help Small Trucking Businesses Grow?
Factoring Maintains Cash Flow
Cash flow is critical to keeping a trucking business running. Operating expenses never stop in the trucking industry. Fuel costs, fleet maintenance, administrative costs, and wages must be paid to keep the business running, and trucking companies need cash to cover those expenses.
With freight factoring, trucking companies are no longer reliant on their customers paying their invoices on time to ensure cash flow. With factoring services like Express Freight Finance’s DropPay, businesses can get paid for each load as soon as it has been completed. Learn more about DropPay here or reach out to our team at 855.DROP.PAY.
Freight Factoring Allows Small Businesses to Seize Opportunities
With great cash flow comes the ability to seize opportunities as they’re available. The freight industry is competitive. Trucking companies must be able to jump on bidding a load quickly, and a lack of operating funds can stop them from being able to do just that.
For example, a trucking company might come across a load on a load board that looks perfect for them. It lines up with their available capacity, is lucrative, and they meet all the carrier requirements. However, they have unpaid invoices outstanding that may prevent them from purchasing the fuel they’ll need to complete delivery. With factoring, this kind of scenario is a non-issue as payment can occur instantly.On top of factoring to provide instant payments that keep cash flowing, many factoring companies offer additional financial services that help small trucking companies keep the wheels turning. Fuel cards and advances, access to cutting-edge freight tech, and equipment leasing can all help small freight businesses stay on top and find their unique growth path.
Factoring Provides Financial Stability
A financially stable carrier is trustworthy. There are no financial hangups that make it difficult for them to fulfill their obligations to their customers. Freight factoring can help small trucking outfits gain that financial stability.
When cash flow is good, it makes it easier to manage regular operational expenses. Trucking companies can pay their bills, ensure employees are paid, and invest in their future.
Freight Factoring Frees Up Time for Core Business Activities
By taking the burdens of invoicing, managing payments, and collections off the table, freight factoring can give trucking businesses, which often run with a skeleton crew as it is, the time they need to grow their business.
Other services factoring companies offer can also play into making operations more efficient and improving strategy, leaving small trucking businesses more time to find new customers and pick out the perfect loads for their business. For example, Express Freight Finance’s MarketFit tool and market updates offer lane data and fresh insights on the freight market that can help trucking companies make the best decisions for their operations.
Conclusion
On top of providing good cash flow to maintain a healthy bottom line, freight factoring services can help small trucking companies grow and thrive through various offerings designed to help their customers improve their businesses and reach their goals.
Interested in learning what Express Freight Finance has to offer for your freight business? Reach out to our team at 877.697.0605.
