If 2020 were a magic eight-ball, the results right now would be “outlook uncertain.” The economy is reopening in spurts, but spikes in COVID-19 infections are also preventing other areas from gaining the foothold they need to get up and running. While the country is relying on the trucking industry to supply both businesses and consumers, fleets of every size need capital to cover expenses and maintain operations. While the traditional go-to for trucking companies has been to take out loans, we are in a much different situations than ever before, and fleets need a reliable alternative.
Loans and an Uncertain Economy
With the window on PPP loans closed, businesses across every industry may still be facing repayments of relief funding due to lower employment rates. Additionally, lending channels are tightening their credit ratings. Banks have rarely raised loan requirements on the trucking industry because drivers and fleets are the foundation of commerce in the country. However, in these extremely uncertain market conditions, banks are preserving their own holding with restrictive requirements on loan approvals. At the same time, trucking companies of every size are reluctant to take out loans. The extra debt and impacted credit ratings could prevent sustainability in the long run, especially if the current outlook is prolonged past the end of the year.
A Reliable Alternative to Loans
Instead of falling back on loans with tightening requirements and possible interest rate hikes in the future, trucking companies are building up working capital by leveraging receivables. While trucking receivables have staggered payment windows of 30 days or longer, freight factoring converts those invoices to cash within 24 hours, so fleets can get access to capital immediately. In addition to fast turnaround, freight factoring is not dependent on a trucking company’s credit ratings, nor does it place debt on the books. Freight factoring is a simple, fast, and transparent way to build up working capital at a time when loans may not be the best solution.
At Express Freight Finance, we specialize in factoring services specifically for the trucking industry. Contact our team today to boost your cash flow and get the capital you need to weather uncertain market conditions.