All businesses require cash flow to function; certainly the trucking industry is no exception to that rule. In fact, with the high operational costs including insurance, fuel, equipment financing and regular maintenance, being tied to a 30-60-90 day pay on invoices makes operating your own trucking business a challenge, let alone growing the business.
The good news is, you don’t need to continue the vicious cycle of chasing down customers for past due invoices, rather you can receive cash up front for, in essence, selling your invoices and aspects of your back office to a finance company in what is known as Invoice Factoring.
Invoice factoring allows businesses to focus on serving their customers and passing invoices through an intermediary to receive funds in record time, with the financier responsible to collect on the debt for a small percentage of the total bill. This isn’t collections, but rather a smarter way to do business with what amounts to a high-performance extension of your accounts receivable department at a better value.
The value add of invoice factoring includes:
Supports Business Growth
Immediate cash available to fund growth project such as adding to your fleet, hiring more drivers, equipment maintenance/repairs.
Not A Loan or Line of Credit
Since it’s not traditional financing, it’s not based on credit-worthiness. Even if your business is incapable of securing traditional loans or lines of credit, that doesn’t disqualify you from invoice factoring.
Debt-Free
Invoice factoring is funding based on invoiced services already rendered, not another debt on your balance sheet.
Back Office Services
Depending on the scale of need, factoring companies offering invoice factoring have the capability to offer back office services including relationship management, credit and risk analysis, professional collection services, and more.
At ENGS, we’ve served the transportation industry for more than 65 years through sensible financing solutions for equipment loans and leases. We continue to proudly serve transportation companies through invoice factoring, with the introduction of ENGS Commercial Capital. Please contact our team of factoring professionals to learn how we can help relieve the stress of the 30+ day pay through invoice factoring.