The transportation industry continues to play an important role in the economy of the nation. And whether a freight bill factoring company is helping a large or small fleet of trucks meet the latest demands, there are many times when it is necessary for businesses to get temporary bridge loans. These loans allow a trucking company to pay its employees on time while these trucking fleet owners are waiting for the payments from customers.
Funds always come in and out of a business, but in the trucking industry the gaps can be significant. With their jobs in such high demand, truckers have been known to literally dump their loads if they are not paid on time. Protecting themselves and their families, these drivers need to be paid, especially in a time when the economy is struggling. When a trucking company owner, however, has to pay its drivers on time while at the same time wait for payments to come in from its customers, there can be a significant disconnect. Invoice factoring is a type of accounts receivable financing that converts outstanding invoices due within 90 days into immediate cash for a small business. With this immediate cash, businesses can still meet their payroll responsibilities.
Freight Bill Factoring Financing Plays an Important Role in the Economy of the Nation
Business factoring services are an important part of many industries, but during this time in the history of the nation it is important to note the role that these freight bill factoring companies are playing. With many grocery store shelves more bare than usual, for instance, it is important that both consumers and grocery store owners themselves know that they will be getting the next shipment of goods. Often times, however, the delivery of these much needed items involve many steps. From truck transfers to driver handoffs, the logistics of any grocery store product follows a rather complicated web. And while this means that trucking companies may be getting paid from several different sources, it is important to note that drivers still have to be paid.
Individual households, of course, often experience many times when they do not have the funds that they need to meet certain bills. Expand this single household problem, however, to the impact the tit has on the trucking industry and you begin to understand the role that freight bill factoring and advance business capital factoring companies can play. Consider some of these facts and figures about the tucking industry in American and the role that it plays on the economy of the nation, as well as the financing that is required:
- The movement of goods across the nation’s transportation network includes nearly 12 million trucks, rail cars, locomotives, and vessels.
- The latest research from the Federal Motor Carrier Safety Administration indicates that approximately 5.9 million commercial motor vehicle drivers operate in the U.S.
- The factor advances most of the invoice amount, usually 70% to 90%, after checking out the credit-worthiness of the billed customer, according to the Wall Street Journal. In its role, when the bill is paid, the factor remits the balance, minus a transaction, or factoring, fee.
- With more than 28 million small businesses in the U.S., it should come as no surprise that the timely delivery of goods is important.
- Bankruptcies in the U.S. increased to 25,227 companies in the second quarter of 2016, from 24,797 companies in the first quarter of 2016. Many economists fear that any previous numbers of businesses failing will pale in comparison to what the nation will see during this pandemic. The timely delivery of goods and the ability to pay drivers on time may limit some of these economic challenges.
- It only makes sense that sending paper invoices is 57% more expensive than sending an electronic invoice, so it is important to note that the best factoring services also help their clients with the latest digital upgrades.
- Factoring companies can help small businesses bridge invoice payment gaps with upfront payments nearing as much as 90% of the original invoice.
The trucking industry always plays an important rollin the economy of the nation, but it is important to note that these deliveries are essential today.