With so many changes in the economy, it is important for every business to have cash on hand in case an emergency arises. This is no different in the freight and trucking industry. Companies rely on having and maintaining healthy cash flow in order to pay drivers, maintain their vehicles, purchase fuel, and cover and other costs that may arise. Truck factoring is a logical and sustainable way to infuse cash into your business without having to take out a business loan.
What is Truck Factoring?
Truck factoring is when a company sells its unpaid invoices to a financial or investment company for immediate cash. Factoring can provide up to 95% of the value of your invoices based on the type and value of each invoice. The financial company then takes on the responsibility of collecting payment from your clients.
Benefits of Truck Factoring
There are several benefits to truck factoring including:
Access to immediate cash.
It’s limitless. As long as a company is willing to buy your invoices, you are able to sell them.
It’s fast. Most people are approved and funded within 24-48 hours.
No new debt.
Flexibility. You can use the cash for whatever you need: operational cost, inventory, a new opportunity—whatever.
Growing Your Business Faster. Because you’re able to satisfy your financial obligations sooner, you’re also able to scale and grow your business sooner without having to worry about whether or not your clients pay their invoices.
Recourse vs. Non-Recourse
One very important thing to consider when looking into a company for truck factoring is whether or not they offer recourse and non-recourse factoring. Recourse factoring offers you, the company, no credit protection, so if a client defaults on their invoice, even after you sell it, you would be responsible for the debt. In non-recourse factoring, the company assumes all of the risks and provides credit guarantees on all factored invoices.
It’s important to work with an experienced factoring company that can offer you and your company the options and cash you need. Contact Capital Crown Investments today to get started.