Tighter Credit Standards and Financing Concerns for Trucking Companies

For the past few years, the trucking industry has had the benefit of flexible credit standards. As the economy recovered from the Great Recession of 2008, lenders saw the importance of the trucking industry and the revenue generated by trucking companies and were more likely to approve loans.

In our current economic climate, however, lenders are tightening their credit standards, making it harder for trucking companies of all sizes to get the financing they need.

Tariffs and Loan Interest Rates

Analysts like to point to tariffs as the reason why lenders are pushing for tighter credit standards. While it is true that the threat of tariffs last year caused an artificial spike in the trucking industry, the picture is very different this year.

With lower demand from shippers, carriers have relaxed their pace and are performing around 2017 numbers. The postponement of further tariffs until after 2019 most likely will not cause another fourth-quarter rush like last year.

However, hints of tighter credit standards could be traced to the Fed imposing rate hikes on traditional loans in 2017 and 2018. The two factors of rate hikes and tariffs have left many trucking companies loan-shy but unsure of how they can secure the financing they need to maintain and grow operations.

Freight-load financing

Right now, working capital is of the utmost importance for trucking companies, and with uncertainty around what is going to happen with tariffs or loan requirements, taking on more debt is not the best solution. Freight-load financing handles things differently.

Freight load financing is a simple process where trucking companies can get cash within 24 hours for their unpaid receivables. The benefits of using freight load financing include faster and healthier cash flow, quick access to working capital, and no debt on the books.

Freight load financing is not a loan. There is no debt, and the amount of financing is based on your clients’ creditworthiness, not yours.

At Express Freight Finance, we provide working capital solutions to trucking companies that want to avoid tighter credit standards from lenders and debt from traditional loans. We offer the most comprehensive freight load financing program nationwide.

Contact our offices today to supercharge your cash flow and avoid the restrictions of traditional loans.