Truck Financing Now Streamlined Through Factoring

The typical path to growth and increased profitability for the average trucking company is a simple one: Add trucks. With more trucks and trailers, efficiencies of scale and expanded opportunities can pay big dividends. Yet many small companies in the freight industry don’t grow because of their lack of access to working capital and lines of credit — because of credit challenges and lack of collateral, traditional bank loans are out of reach.

However, invoice factoring companies have stepped up to provide affordable financing for trucking companies to add trucks and trailers to their fleets by folding the purchase or leasing payments into the factoring process. This financing innovation will enable companies to take on more cargo and ease capacity concerns in the face of projected double-digit freight growth rates. Between 1990 and 2013, U.S. freight activity grew by over 50% and by 2040. It is projected to nearly double again.

To keep up with fuel and equipment costs, the vast majority of trucking companies, from independent owner-operators to large fleets, rely on freight bill factoring to maintain a steady cash flow for fuel and equipment costs. By selling their invoices to a factoring company, these trucking companies get paid upon delivery instead of waiting 30, 45, or even 60 days for customers to pay. With fuel advances from the factoring company upon loading, drivers — and the shippers or brokers they work for — rest assured that lack of funds and an empty gas tank won’t slow them down.

Today, a growing number of factoring companies specializing in the trucking market are adding equipment financing to the factoring arrangement for clients’ convenience and increased access to working capital.

The process is a simple one. The trucking company leases or purchases a power unit (tractor) or trailer and then the factoring company makes the payments with their money, not the trucking company’s money, directly to the truck dealership. The financing or lease payment amounts are deducted out of the factoring company’s upfront payment to the trucking company for loads delivered. The arrangement ensures that payments are made on time, every time, which helps build the trucking company’s credit standing for the future.

Some factoring companies go a step further and help clients locate the right equipment, new or used, at the right price. They can refer clients to trusted equipment brokers and dealerships equally committed to these trucking companies’ growth and success.

Interstate Capital, one of North America’s top freight factoring companies, recently added truck and trailer financing to their menu of value-added benefits for clients. The new option quickly became one of Interstate’s most requested programs and shows no sign of slowing down. Combining the financial power of factoring with increased access to cash for equipment financing is proving to be a winning path to growth for a growing number of clients.

The Interstate Capital Group of Companies is a leading provider of accounts receivable financing and factoring, freight bill factoring, fuel advances for truckers, and equipment financing. Founded in 1993, Interstate Capital has provided $ billions of funding for over 10,000 small business owners in the U.S., Canada, and Mexico.

Source: Interstate Capital

Categories: Finance, Business to Business, Trucking

Tags: business finance, freight bill factoring, freight broker, invoice factoring companies, truck financing

About Interstate Capital

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Interstate Capital, one of North America's leading invoice factoring companies, focuses on one goal: helping small and medium-sized businesses succeed and grow.

Eric Baca
Press Contact Interstate Capital
Interstate Capital
1255 Country Club Road
Santa Teresa, NM 88008
United States