The premise seems simple enough. For trucking companies of all sizes to maintain operations and grow successfully, they need capital and fuel. However, after a number of market disruptions and lowered rates in 2019, keeping ample levels of capital and fuel can be challenging.
It All Comes Down to Cash Flow
The trucking industry has a very unique cash flow model. Receivables are on staggered payment schedules of 30, 60, and even 90 days. After a shipment is delivered, the wait for revenue begins. Yet during that time, trucking companies must still handle expenses such as payroll, insurance, maintenance, fuel, and more. For long periods, trucking companies may be operating near or in the red before they see revenue from clients, which can create instability for both small and large, as well as for owner-operators. If trucking companies cannot maintain a positive cash flow, then they might join the over 100 fleets that have gone bankrupt in this year alone.
Trucking Companies Can Eliminate the Wait
When cash flow is strained, trucking companies often get locked into a cycle of short-term loans to overcome the recurring gaps in working capital. The accumulation of debt to smooth out revenue cycles and maintain a positive cash flow can do more harm than good. As a better alternative, trucking companies are eliminating the staggered payment schedules tied to receivables by using freight load factoring. Freight load factoring pays trucking companies cash within 24 hours of submitting unpaid receivables. Even better, factoring services are completely debt-free. Owner-operators, small trucking companies, large fleets, and everyone in between can get fast access to revenue and improve cash flow so working capital and fuel expenses are no longer a problem.
The Best Freight Load Factoring Services
Express Freight Finance specializes in freight load factoring services. Our partners not only receive cash for invoices within 24 hours, but we also offer a whole suite of account management tools, including the ability to check the creditworthiness of your customers. If you want to get a financial advantage and ensure long-term success for your trucking company, contact the experts at Express Freight Finance today.