Fleet of all sizes are positioning themselves for growth in the upcoming months. Whether that means expanding facilities, acquiring additional vehicles, increasing recruitment efforts, or launching marketing campaigns to reach into new territories, the time is right for growth in preparation of what may be head. However, fleet growth takes capital, and trucking companies need to be smart in how they finance expansion.
Loans Limit Growth Potential
Traditional lending channels have not changed much over the years. They still offer capital in exchange for debt and collateral. The two things that have changed about the loan process are the requirements and the processing times. Traditional lenders have raised their requirements, which makes even a basic working capital loan difficult to access. With the sheer number of loan requests, traditional lending institutions have staggered the processing time, so it can take many weeks or even over a month before a decision is made. Even still, taking on debt and making those monthly payments can eat into revenue, which means many growth projects need to get scaled back or simply put off until a later date. Additionally, as we have seen in the past year alone, trucking companies that take out traditional loans are subject to arbitrary interest rate hikes, making their initial loan even more expensive.
Fleet Growth without Debt
One of the main reasons trucking companies are poised for growth is from the tremendous business they did last year. Trucks were in high demand, and this is the one time of year where things are not too hectic, so owners can focus on growth projects. As an alternative to loans, trucking companies can factor their unpaid receivables – a good portion of which are still outstanding from last December. In doing this, fleets can get a lot of working capital all at once, without needing to fall back on debt-based loans. Freight load factoring can be arranged quickly, and there are no upper limits on the receivables being factored. When receivables are submitted for factoring, the turnaround time is within 24 hours, allowing fleets to quickly build up capital reserves for growth projects.
Express Freight Finance is a national leader in freight load factoring, serving the trucking industry for many years. Contact our offices today to learn how you can sidestep the debt trap and build up growth financing with freight load factoring.