If your transportation company needs funding, choosing the right type of financing is critical. “All financing is the same” and “money is money” are just a couple myths floating around the industry, however choosing the wrong type financing for your business can actually be extremely detrimental.
Freight factoring is one option you can consider for funding. In this article I’ll go over some benefits of using this type of financing to help you figure out if it’s a viable option for your transportation company to get the funding it needs.
High initial advances: Most factoring lines provide carriers with high advances. They typically advance at least 90% of the invoices, and often the advance can reach 95%. Multiple programs also fuel advances or fuel cards.
Quick approvals: Financing lines usually get approved within just one business day of completing an application package. In many cases, it can be implemented and funded in less one week or less. Because of this, freight factoring is typically used to manage cash flow emergencies.
Take on more loads: Factoring can help improve your cash flow and allows you to take on more loads and new clients. Since you’re getting the equivalent of a cash advance from the factoring company you choose to work with, you then have the funds you necessary to pay additional expenses.
Works with fuel cards: Factoring lines typically work with fuel card providers, allowing them to offer you extra convenience.
Flexibility: The greatest advantage of using factoring to help fund your transportation business, is that the financing line can grow along side of your revenues. While more traditional loans (or lines of credit) only work for a fixed amount, a factoring line can increase if your clients meet the criteria required by your factoring company.
Freight factoring can most definitely solve a short-term cash flow problem, but can also work for a more long term use. This type of funding can let you take on new clients and more loads simply because you now don’t have to wait up to 45 days for your clients to pay their invoices. The factoring line can grow to right along side of the growth of your business, which is a great feature that many other types of funding don’t offer.
If you’re interested in learning more about freight factoring or if you’d like to get started on the application process, visit https://www.corefundcapital.com/contact-us today.