The safe and timely delivery of goods is still a major challenge as the next month of the pandemic arrives. From the constant and continued need for personal protection equipment for health care workers to the canned goods that grocery consumers seek, there are many companies that are still struggling in their efforts to meet demands. Behind the supplies, of course, is a complicated network of not only production, but distribution. And as some trucking companies hire more drivers, purchase new trucks, and plan the logistics for new deliveries, there often remains a cash flow problem that can be crippling.
When trucking companies find themselves facing the challenge of paying their drivers and covering the costs of fuel and maintenance weeks, and sometimes months, before they realize their revenue, they often have to look for advance business capital factoring options. To understand what is an invoice advance loan like in the trucking industry it is important to note that these services are as important to small trucking companies, as well as the largest of trucking businesses. And given that nearly 12 million trucks, rail cars, locomotives, and vessels move goods over the transportation network, it is likely that at elastic’s tone of the products the tyou will purchase this weekend was delivered by a company that is making use of the trucking factoring service platform.
What is an Invoice Advance Loan?
Invoice factoring is a type of accounts receivable financing that converts outstanding invoices due within 90 days into immediate cash for your small business. This immediate cash then can be used to pay employee salaries, cover the costs of fuel, as well as other expenses like maintenance and new purchases. The top factoring companies for freight brokers realize that what is an invoice advance loan service information needs to be carefully outlined to borrowing customers so that both the lender and the borrower understand the terms.
In a time when consumers are literally buying everything off the shelves of many grocery stores, for instance, it is important to note that without the help of some advance capital, the delivery of many much needed products would be delayed even further.
Consider some of these facts and figures about the many ways that what is an invoice advance loan can help transportation businesses of all size meet both the current and future demand they are facing:
- The factor advances most of the invoice amount, typically between 70% to 90%, after checking out the credit-worthiness of the billed customer. When the bill is paid, the factor remits the balance, minus a transaction, also called a factoring, fee. This definition, according to the Wall Street Journal, explains a service that many companies use.
- Approximately 5.9 million commercial motor vehicle drivers operate in the U.S., according to the Federal Motor Carrier Safety Administration.
- There are nearly 28 million small businesses in the U.S., and many of them are struggling to find the best way to survive the challenges of the Coronavirus pandemic. Without access to the money needed to meet employee salaries, many of these small businesses will not be able to survive.
- Factoring companies can be especially helpful to small businesses as they attempt to bridge invoice payment gaps with upfront payments that are available in amounts equal to 90% of the original invoice.
- Fortunately, the more timely and affordable method of digital invoicing provides many advantages over sending paper invoices that are calculated to be 57% more expensive than sending an electronic invoice.
- Bankruptcies in the U.S. increased to 25,227 companies in the second quarter of 2016. This representation of 24,797 companies in the first quarter of 2016, however, will likely pale in comparisons to the number of bankruptcies that have occurred in the three months since the pandemic. Invoice factoring loans are one way that trucking companies can meet their current needs.
Operating on credit is the only way that many businesses can manage their day to day finances. Advance factoring services provide a unique way for trucking transportation companies to meet the increased demands that they face at some of the most challenging times, including this current pandemic. Is your business surviving the current economic struggles that many companies are facing?