Truck|truck-infosource.com
Jul
11
Filed Under (Finance) by truck
Kris Koonar asked:
In case of the trucking companies, big as well as small, there are situations when the cash needs are high and the customers are not paying up on time or amounts are stuck in a credit period. Trucking companies need regular financing for the daily needs like truck maintenance, wages and gas and so on. However, as they are stuck up with delayed payment or credit payment, they have a tough cash flow. For this, one of the best finance options is that of the truck factoring. Truck factoring is nothing but purchasing of the invoices of the trucking companies by the truck factoring companies and paying a certain percentage of the amount to the trucking companies.
The advantage of such factoring for the transport companies is that they get finance or cash when they require it and the bills or invoices are collected by the factoring companies later, on the invoice due date. Moreover, the trucking companies need not be stuck up with the traditional banks for finance. When the company is new it hardly gets finance easily from the banks that rely on the creditworthiness of the customer before financing.
Being new, these companies can hardly show anything. Thus getting finance becomes very difficult and this could be very demanding on them and slow down their growth. The additional advantage is that the factoring companies may not check the creditworthiness of the trucking company, but are more bothered about the credit. The decision may be dependent only on these factors. The added advantage, for the trucking companies may be seen as having to deal with reliable companies with good ratings, government agencies and so on.
The process of getting finance is also easy and relatively quicker. It is a simpler and easier process for the trucking company to get the funds. These companies take the risk of credit collection upon themselves. This frees you from the worry of collections and follow ups and other related matters. Around 60% to 96% amount of the value of the invoice may be received by you, and when the entire bill amount is collected the remaining is paid after deducting some service fee of around 4% or so, you get the remaining amount. This is a finance given and not a loan.
Thus, a new debt is not added up and nor is any collateral required. Moreover it has a better effect on the balance sheet as your accounts receivable are lesser. The trucking companies can use these services to get working capital needed by them for various purposes. A timely availability of funds allows the company to move ahead with expansions and improved services. The amount may be available in even less than four hours. The collection process is also a systematic one thus reducing the collection cost.
With the collection responsibility being undertaken by the factoring company, the trucking company may concentrate on other activities. Moreover they do not have to deal with daily arrangement of funds. You also have a chance to improve the credit rating. With the timely availability of funds you can pay off your vendors on time. This enables you to avail of any further credit needs. You may concentrate on other activities like marketing, sales and other activities for the growth of the organization.
Factoring is very useful for upcoming companies as well as established organizations. Making optimal use of the services, the company can grow even if you do not get finance from the other financial institutions. It helps you to take timely advantage of the opportunities that pop up.
STEVE
In case of the trucking companies, big as well as small, there are situations when the cash needs are high and the customers are not paying up on time or amounts are stuck in a credit period. Trucking companies need regular financing for the daily needs like truck maintenance, wages and gas and so on. However, as they are stuck up with delayed payment or credit payment, they have a tough cash flow. For this, one of the best finance options is that of the truck factoring. Truck factoring is nothing but purchasing of the invoices of the trucking companies by the truck factoring companies and paying a certain percentage of the amount to the trucking companies.
The advantage of such factoring for the transport companies is that they get finance or cash when they require it and the bills or invoices are collected by the factoring companies later, on the invoice due date. Moreover, the trucking companies need not be stuck up with the traditional banks for finance. When the company is new it hardly gets finance easily from the banks that rely on the creditworthiness of the customer before financing.
Being new, these companies can hardly show anything. Thus getting finance becomes very difficult and this could be very demanding on them and slow down their growth. The additional advantage is that the factoring companies may not check the creditworthiness of the trucking company, but are more bothered about the credit. The decision may be dependent only on these factors. The added advantage, for the trucking companies may be seen as having to deal with reliable companies with good ratings, government agencies and so on.
The process of getting finance is also easy and relatively quicker. It is a simpler and easier process for the trucking company to get the funds. These companies take the risk of credit collection upon themselves. This frees you from the worry of collections and follow ups and other related matters. Around 60% to 96% amount of the value of the invoice may be received by you, and when the entire bill amount is collected the remaining is paid after deducting some service fee of around 4% or so, you get the remaining amount. This is a finance given and not a loan.
Thus, a new debt is not added up and nor is any collateral required. Moreover it has a better effect on the balance sheet as your accounts receivable are lesser. The trucking companies can use these services to get working capital needed by them for various purposes. A timely availability of funds allows the company to move ahead with expansions and improved services. The amount may be available in even less than four hours. The collection process is also a systematic one thus reducing the collection cost.
With the collection responsibility being undertaken by the factoring company, the trucking company may concentrate on other activities. Moreover they do not have to deal with daily arrangement of funds. You also have a chance to improve the credit rating. With the timely availability of funds you can pay off your vendors on time. This enables you to avail of any further credit needs. You may concentrate on other activities like marketing, sales and other activities for the growth of the organization.
Factoring is very useful for upcoming companies as well as established organizations. Making optimal use of the services, the company can grow even if you do not get finance from the other financial institutions. It helps you to take timely advantage of the opportunities that pop up.
STEVE
Sep
21
Filed Under (Finance) by truck
Kris Koonar asked:
In this article we offer answers and advice to both, the trucker and the factoring company, on how truck factoring services could benefit them.
At the outset, for someone who has a trucking business, it is not always a smooth ride. It is quite a tough business to run and risky too, sometimes. And then if they have to approach a factoring company, then there are questions raised. Every person wants to know the risks involved before they jump into an agreement with a stranger. It is only natural to want be sure before you decide on the best factoring company for you. Factoring means that the company gives you credit by purchasing your invoices or receivables and taking the said payment from the customer directly.
Chasing invoices is a tiresome and lengthy process for any trucker, so they taking care of it, it works well for you. The only thing that is important is that the customer you have should meet their credit standards. There is also the agreement factor. Normally, it is made for a year and then renewed. But it is better if you opt for the short term contracts. So that in case you are unhappy with the way they function, it is easier for you to opt out of this professional arrangement and look for a new factoring company.
The factoring fee could be anything from 5% to 7%. But it is still lower than what a bank would charge you. If you have a larger volume of load, there are factoring companies that give a discount or reduce the rate of interest, if it is a recurring benefit to them. The other option is that the interest remains the same, but on the overall amount you get a rebate or the extra money is credited to you. It could really work very well for you.
Secondly, if you want to get into truck factoring, it is a brilliant idea and also could be a very financially beneficial to you. It is not difficult to get into factoring. You just need to do a little advertising so you could find the loads that you are looking for. Meet the right sources and ask around, it could help. Also, online a lot of professionals have instruction manuals and kits to help you set up the business.
Please remember that a trucker will only come to you if he is assured that he will have a constant flow of cash against his invoices, to meet with his expenses. You need to guarantee that. And that means you need to be financially sound and stable if you want to get into this business. Since it is difficult to get loans from the banks because of the credit line problems, it is easier for them to come to you. You must check out whether their freight customers are credible or not. That is important for you. After all you are in the business for the money, so ensure you do not take any unwanted risks.
NUMBERS
In this article we offer answers and advice to both, the trucker and the factoring company, on how truck factoring services could benefit them.
At the outset, for someone who has a trucking business, it is not always a smooth ride. It is quite a tough business to run and risky too, sometimes. And then if they have to approach a factoring company, then there are questions raised. Every person wants to know the risks involved before they jump into an agreement with a stranger. It is only natural to want be sure before you decide on the best factoring company for you. Factoring means that the company gives you credit by purchasing your invoices or receivables and taking the said payment from the customer directly.
Chasing invoices is a tiresome and lengthy process for any trucker, so they taking care of it, it works well for you. The only thing that is important is that the customer you have should meet their credit standards. There is also the agreement factor. Normally, it is made for a year and then renewed. But it is better if you opt for the short term contracts. So that in case you are unhappy with the way they function, it is easier for you to opt out of this professional arrangement and look for a new factoring company.
The factoring fee could be anything from 5% to 7%. But it is still lower than what a bank would charge you. If you have a larger volume of load, there are factoring companies that give a discount or reduce the rate of interest, if it is a recurring benefit to them. The other option is that the interest remains the same, but on the overall amount you get a rebate or the extra money is credited to you. It could really work very well for you.
Secondly, if you want to get into truck factoring, it is a brilliant idea and also could be a very financially beneficial to you. It is not difficult to get into factoring. You just need to do a little advertising so you could find the loads that you are looking for. Meet the right sources and ask around, it could help. Also, online a lot of professionals have instruction manuals and kits to help you set up the business.
Please remember that a trucker will only come to you if he is assured that he will have a constant flow of cash against his invoices, to meet with his expenses. You need to guarantee that. And that means you need to be financially sound and stable if you want to get into this business. Since it is difficult to get loans from the banks because of the credit line problems, it is easier for them to come to you. You must check out whether their freight customers are credible or not. That is important for you. After all you are in the business for the money, so ensure you do not take any unwanted risks.
NUMBERS
