For many new, small and growing dry van trucking companies access to working capital creates a real financial headache. With this problem there are two factors to consider:
Factor 1 – Expenses
With every load you haul there are expenses you incur including payroll, fuel and maintenance.
Factor 2 – Unpaid Client Invoices
Most dry van trucking companies find that their clients take 30, 45 or 90+ days to pay their freight bills. This can mean you are waiting on funds for upwards of two months even though you have had to pay your expenses, such as fuel, much quicker.
What working capital options do dry van companies have?
If you don’t have enough working capital on hand to cover all your expenses what can you do? One option to consider is freight bill factoring, also known as accounts receivable or invoice factoring. With invoice factoring for dry van transportation companies, a factoring company could provide you with immediate access to working capital by using your unpaid freight bills as collateral. Invoice factoring is often a perfect match for new, small and growing trucking companies because all you need are credit worthy commercial clients, as factoring companies look at the credit history of your clients and not your business.
For dry van trucking companies who choose to work with a factoring company the process is quite easy. The first step is typically a short application process. Once the application process is complete, each time you submit a freight bill, for an approved client, you get the funds within hours. All you have to do is submit a copy of your freight bill to the factoring company once you have delivered the load.