Maintaining a positive cash flow can be a bit of a juggling act in the trucking business. Because of the time needed to deliver and pick up shipments, combined with staggered payment schedules, maintaining access to working capital to cover operational costs and more can be a source of financial stress. Many fleet owners are turning to load factoring as a solution to rightsize finances.
What Is Load Factoring?
At its heart, load factoring is the simple exchange of open invoices for working capital. Drivers for trucking fleets submit BoLs and money is transferred to the fleet’s account within 24 hours. This sale of receivables allows fleets to maintain a strong cash flow, and accumulate the working capital needed for growth, new equipment, advertising, hiring, and more.
The Larger Impact Of Load Factoring For Fleets
Load factoring does more than simply provide a steady cash flow. The service also gives fleets the ability to streamline their accounting process. Tracking open invoices across various customer accounts becomes a thing of the past, because payments for invoices happen immediately. The responsibility of getting payments from customers is transferred to the group providing the factoring services. Additionally, fleets no longer have to worry about invoices “aging out” and having to perform collections. Many fleet owners are familiar with the process of collections, and how they can add up to 45 days on top of an already late invoice before anyone sees the revenue owed. Load factoring allows fleets to focus on their business and reaching their goals, instead of chasing after payments.
Working Capital Without Debt
Load factoring is not a loan. All to frequently fleet owners are railroaded into using bank loans for working capital when finances are tight. However, between the high requirements, fees, and long-term debt, loans are not always the most financially viable option. Factoring is a debt-free solution for working capital that preserves credit ratings, and uses invoices. There is no need for collateral or setting money aside to make monthly payments on a loan. Factoring services deliver within 24 hours on new invoices, as well as old, unpaid accounts of all sizes.
Speed Up Your Cash Flow
Express Freight Finance is a leader in load factoring services. By offering funding within 24 hours without debt, as well as giving fleets the ability to check the creditworthiness of their customers, we keep the trucking industry moving forward. Contact our offices today to get started.