When your transportation business is either just one truck or a complete fleet, you are always spending on expenses to keep your trucks on the highways. All this occurs before your customers pay you any of your due fees. Without that invoice being paid, your cash flow may be devastated, and you will need to employ a freight factoring company to advance you the funds for the invoice, and then they will source your customers to clear the debt.
Removing the Stress
As you watch all your bills arriving and have no way of paying them because your customers have not yet paid you, especially when you have many of your payments due on 30, 60 or 90-day terms, your stress levels will rapidly increase. Unless you have arranged a plan with a freight factoring company, your cash flow may reach a crisis position.
Other worries may force you to be unable to pay your taxes on time. You may be hit with late fees where you are unable to pay your own outstanding business invoices, and your credit lines may be damaged.
You can stay in control of your cash flow by dealing closely with a freight factoring company. They will not suggest how you spend your money, simply forward your funds against your invoices, having credit checked you first and clarified that the goods have arrived at their end destination.
Your company’s track record with finances is not an essential factor in the deal. The factoring business is only really interested in ensuring they can retrieve the funds required from your customer.
This means that your cash flow problems, which would mean that your bank may not lend to you during this period, are dramatically eased, and the need to source the invoice payment is taken away from you.
Being in control of your cash flow is essential, and by planning in advance, you can retain that control and decide for factoring finance at times that suit you.
