There probably is not a trucking fleet in the United Stated that has not used short term loans at one time or another. While short term loans do serve a very good purpose, they are often marketed to trucking fleets in ways that actually place more of a strain on finances than they claim to alleviate.
Not All Short Term Loans Are Bad
Trucking fleets, in fact, most businesses, are impossible to start without short term loans. Whether fleets use SBA loans or equipment financing programs, getting a foothold in any industry usually starts with a loan. What we are discussing is the continued use of short term loans for working capital, to cover the cost of overheads and logistics, and to remove the strain on cash flow.
Short Term Cures, Long Term Headaches
Banks and other traditional lending channels frequently push short terms loans as a way to get working capital for growth or to temporarily alleviate cash flow problems. Short term loans are, by their definition, temporary solutions. Once the loans are used for working capital or to maintain overhead, there is nothing more. Loans are not renewable. When cash flow problems crop up again, fleet owners have impacted credit and an obligation to pay off debt from previous loans, which prevents further financing. The debt left over from loans makes cash flow problems even worse for trucking fleets, which can cause operations to grind to a halt.
Finding An Alternative To Short Term Loans
The financing model of short term loans for trucking fleets is so ingrained, that is can be hard to find an adequate solution that does not involve debt. Cash advances claim to be debt-free, but even so, the interest rates are high, and fixed assets can be claimed as collateral from the lender. Trucking fleets need something that is simple, fast, debt-free, and without long term payment plans. Freight bill factoring is the alternative. Freight bill factoring allows fleet owners to convert customer invoices to working capital within 24 hours. No debt. No high interest rates. No long term payment installment. Just a simple exchange of receivables for working capital.
Say Good-Bye To Short Term Loans
If you want to escape the cycle of impacted credit ratings, debt, and collateral that come with short term loans and other financing structures, contact Express Freight Finance. We work directly with fleet owners across the country to provide working capital solutions without saddling their businesses with debt and high interest rates. Contact us today for more information on freight bill factoring, and get your finances on the right track.