Small businesses often worry about cash flow and particularly when they suffer from seasonal variations and need to pay for their expenses before business can be completed. Transportation factoring companies are experts at helping freight businesses improve their cash flow, knowing that their business credit rating is not affected by these decisions.
Is Your Business Too Small for Factoring?
If you have completed your work within the transportation industry and are ready to issue an invoice, then transportation factoring companies will be interested in your business. They charge a fee, which they deduct from the money received from collecting from your invoice. Your business will be paid within 24 to 48 hours of issuing the invoice, which may dramatically improve your cash flow and alter the status of your business.
The transportation factoring companies will have assessed your business before they agree to work with you. They will, of course, prefer to collect outstanding debts from companies who are good risks but may have expected to pay 60 or 90 days after the business has completed.
Your freighting business will know its expenses throughout the year, and it may be that you only require boosting your cash flow at certain times of the year. This leaves you in charge of deciding when you will factor and when you will invoice your customer and wait to be paid.
You only need to use transportation factoring companies when you need to increase your cash flow and keep your business operational and alive. You can compare the cost of acquiring a loan from a bank or another financing operation, but this will add to your debt and may not be readily available as quick as a factoring company will settle your outstanding invoices.
Factoring your invoices improves your cash flow, enables you to complete work that you might have needed to have refused without the cash flow and most importantly, allows you to pay all your bills on time, ensuring no further debt to your business.
