Trucking Factoring

Written by Patricia Tunstall
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Truckers' livelihoods depend on keeping their trucks on the road. To do this, they need a good cash flow to pay for fuel to keep the trucks rolling, to pay their drivers, and to pay the many expenses involved in any transportation industry. When fuel costs keep rising, it squeezes the already-thin profit margin most truckers operate on.

Whether you have one truck or 10 trucks, you always feel the pinch from competition and increased expenses. Cash flow can make or break any trucking company. It costs a lot of money to keep each truck on the road every day, and most owner/operators cannot afford to wait 30-90 days for payment on freight bills.

Factoring Can Keep You Rolling

Factoring, also known as discount invoicing, has been a common practice in the trucking industry for a long time because it makes sense. You, the owner, sell the freight bills you choose to a factor, a company or bank that offers this kind of program. These invoices are discounted, meaning you receive less than the face value of the invoices. When the invoices are paid by your customers to the factor, you receive the remainder of the invoice amount, minus a small fee.

Factors even take over the time-consuming business of collecting from your customers. You don't have to waste time calling, persuading, or getting tough with the people who do business with you. You have now been freed from this chore, and you have plenty of cash to keep your company in business.

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