In both strong and soft economic conditions, two things remain constant. One, the trucking industry is the backbone of the American economy and allows commerce to take place on a national and international scale. Two, the constant need for working capital. Freight factoring has helped the trucking industry stay on top in all economic conditions.
Freight Factoring in a Strong Economy
In a strong economy, the trucking industry has leverage when negotiating with brokers, shippers, and direct clients. Demand is high for capacity, and drivers are always on the move. Shipments are picked up and delivered all around the country, giving fleet owners the opportunity to act on growth opportunities.
However, taking out loans when the economy is riding high is not always the best solution. Debt and lowered credit ratings can prevent trucking companies from reaching their full potential, even in the best economic conditions.
Additionally, growth projects are difficult to roll out if a good portion of our revenue is tied up in unpaid receivables. Freight factoring takes care of these issues by immediately turning unpaid invoices into cash, so trucking companies can quickly build up growth capital without needing to take out loans.
Freight Factoring in a Soft Economy
In a sluggish or depressed economy, the country doesn’t stop relying on the trucking industry. We can even look around at our current situation during a pandemic and see that while certain businesses have gone dormant, other sectors desperately need trucking companies to keep supply chains moving.
But in an economic downturn, finding financing can be challenging. Lenders raise their requirements to minimize their own risk, and taking on debt is a fiscally unwise move. Still, trucking companies need to maintain a healthy cash flow to cover overhead, make payroll, and keep fuel tanks filled.
Waiting a month or longer for clients to pay on invoices with staggered payment schedules won’t cut it. Freight factoring gives factual turnaround times on unpaid receivables to provide a strong cash flow for trucking companies so they can weather economic conditions and keep rolling.
Express Freight Finance provides comprehensive freight factoring services to trucking companies of all sizes. Whether you are looking to build up growth capital or simply want to boost cash flow, we can help. Our factoring services are fast, so you can access funds within 24 hours of submitting your receivables. Contact our offices today to get started.