Since the trucking industry is leading economic averages across almost every industry, the need for working capital is of the utmost importance to maintain momentum so the economy can get back on its feet.
Working Capital Challenges
The Trucking Industry has always faced challenges in accumulating capital. Overhead costs, including maintenance, fuel, and payroll take a good amount of revenue. Quarterly and yearly tax obligations place a further strain on capital reserves. Additionally, revenue cycles are not always even for trucking companies. Since freight invoices are issues with staggered payment schedules of 30 days or longer, trucking companies can deplete their working capital reserves while waiting on shippers, brokers, and direct clients to submit payments.
The challenges outlined above occur regularly in the trucking industry. Now that we are all in the middle of the COVID-19 pandemic, the need for working capital is even more crucial to the success of the trucking industry. Earlier this year, Paycheck Protection Program loans were issued as a means of keeping businesses afloat during a health crisis that became an economic downturn. The window for applying for PPP loans has ended, and no one knows if there will be another round of relief or stimulus packages in the near future. Spot trucking may be on the rise, but there is still a huge demand for regular capacity shipments – which can be hard to meet when cash flow is staggered because of payment schedules. The trucking industry needs a reliable solution to boost cash flow and build up working capital.
Building Working Capital
To get fast access to revenue and build working capital, trucking companies and owner-operators alike use freight factoring. Freight factoring converts unpaid receivables to cash within 24 hours to eliminate the waiting period imposed by staggered payment schedules. At Express Freight Finance, we lead the industry with comprehensive factoring services and working capital solutions for the trucking industry. We work with independent drivers and fleets of every size to improve their cash flow so they can build up working capital in all economic conditions. Contact Express Freight Finance today to get started.