Recently, the American Transportation Research Institute, a not for profit research entity, reported that for the first time since 2006 the American trucking industry faces a new top concern: a shortage of drivers. The survey, which generated responses from over 1500 motor carriers and commercial drivers, reveals a number of challenges facing trucking carriers and offer suggestions to help encourage young people to pursue trucking as a profession.
The rising challenge of finding capable drivers is one of the reasons many American trucking companies rely on freight factoring to increase financial flexibility. With fewer drivers on hand, it is becoming more and more important to ensure adequate access to working capital to meet critical operating expenses such as driver’s pay. Waiting up to 90 days for payment on an expensive delivery can have a devastating effect on meeting financial obligations and sustaining fleet operations.
Freight factoring is a common financing tool that enables trucking and transportation companies to finance outstanding invoices – the carrier simply sells its accounts receivable to a factoring company in exchange for immediate funding. This sudden inflow of cash allows companies of all sizes to meet their outstanding business overheads and even to make new investments.
Factoring is an area in which industry familiarity counts a great deal. The industry you and your customers find yourself in effects terms and costs of invoice factoring in considerable ways. This is why it’s so important that your factoring partner specialize in your industry, so that they are aware of the various ins and outs.
Factoring from Accutrac Capital— a notably well-established factor specializing in the trucking industry — offers convenient financing options as well as other perks to help carriers of all sizes. Here’s how it works:
- as a carrier, you deliver your freight successfully
- you then invoice your customer and a copy of that invoice goes to the factoring company along with documents proving the delivery of the freight
- the factoring company advances the carrier up to 97% of the invoice’s value (minus a small fee) which is then sent directly into your account in 24 hours
- when your customer pays the factoring company the full amount of the invoice, the factoring company than reimburses you 3% balance owing
Consider the following affordable and easy to understand factoring options for securing same-day funding (and remember that the factoring fee varies depending on the plan you ultimately choose).One option is flat fee factoring from as little as 1.59%, which is a straight-forward, easy to manage option with a simple one-time cost. Another popular plan is a factoring line of credit. Designed for larger fleets and operations, plans start at 0.022% per day, and offer maximum value and control for larger truck fleets. Finally flex factoring is designed for carriers whose customers typically pay within two weeks, and offers an impressive 0.49% fee for up to 10 days.
With a shortage of drivers looming in 2018, it’s more important than ever to secure funding right away for large outstanding invoices. If you’re looking to find cash flow solutions that help you capitalize on your Accounts Receivable and receive same-day funding for invoices that typically take months to pay out, you’ll definitely appreciate the quick turnaround times, added liquidity, and peace of mind that comes with factoring your freight bills.