We have been hearing the word “recession” come up quite a bit for the past few months. If you read three different news sources, you are going to come away with three different answers about whether or not the trucking industry – and the economy as a whole – is on the brink of a recession. The reality may not be as frightening as the news makes it out to be, but having a source of recession-resistant financing is essential no matter what the economic outlook is.
Financing for the Trucking Industry Is Getting Tougher
Lenders are usually the first ones to flinch in an uncertain economic climate. If the word “recession” is thrown around one too many times, suddenly even the most stable and lucrative industries pose a risk. Lenders are currently tightening credit standards with the trucking industry and raising requirements, thus making it more challenging to get loans. Looming tariffs, long lines for border inspections for truckers, and more are placing downward pressures on the trucking industry. However, relaxed regulations are also increasing revenue in the spot rate and LTL markets. Erring on the side of caution, lenders will reduce their own risk in financial transactions by shifting more of the burden to the borrower. Trucking companies and independent owner-operators need accessible and affordable financing without struggling to pay off debt and high-interest rates.
There is recession-resistant financing designed specifically for the trucking industry. Freight factoring works very differently from loans in that there is no debt, no balance to repay, no scheduled payments, and no credit minimums for trucking companies. Freight factoring is a transparent exchange of receivables for cash, designed to eliminate the lag imposed by 30, 60, and 90-day payment schedules. This gives trucking companies quick access to capital without any of the restriction or high requirements of traditional lending channels. Because freight factoring is structured around receivables, cash is made available within 24 hours, and there are no long processing times or arbitrary loan board decisions.
Express Freight Finance is a national leader for freight factoring services. Our team works with trucking companies of all sizes to provide a recession-resistant alternative to traditional loans, and our financing is a perfect fit for economic booms, downturns, and everything in between. Contact our offices today to get started.